Ad Contrarian Bob Hoffman:

“The effectiveness of online advertising is a delusion”

Dominik Imseng
Sep 30, 2016 · 6 min read

Laser-sharp targeting and the ability to measure results in real time — what exactly is your problem with online advertising, Bob?
How about this: 56% of digital ads served are never seen by a live human being.
Says who?
Says Google. When you buy a page in “The New York Times,” you know exactly what you’re getting, you can see your printed ad. But in the world of online advertising, regardless of what media buyers say, you don’t know what you’re buying, who you’re buying it from, where your ad is going to run or how much it is going to cost. There is a lot of arcane black box technology involved that very few people really understand. Every client thinks he understands it, and every client thinks that it’s the other guy who’s getting screwed, but in fact, they’re all on the ship of fools.
Has the ad industry gone full circle? Is it selling snake oil again? But this time not to consumers, but to marketers?
Absolutely. In fact, there is so much corruption and trickery going on in online advertising that the Association of National Advertisers is trying to figure out what’s happening with their money — because they simply don’t know. There is an enormous amount of bad ad inventory, such as websites stacking hundreds of banners on top of each other to claim views and clicks for ads that no one has ever seen. That’s why advertisers can’t be sure if it’s a real website where their ads are shown. They can’t be sure if their ads are seen by real people and not bots. They can’t be sure if it’s real clicks and not fraud. With the effect that Google, Facebook and Amazon are going to rule the world even more, because they are part of the very few online entities that clients trust.
Yet, to you, not even those places are worth spending advertising dollars on.
Sometimes they are. If you’re buying search advertising, Google is reliable. If you’re buying a certain type of direct response advertising, Facebook is reliable, too. So is Amazon — to a certain degree — if you’re doing online retail marketing. But what online advertising has not proven to me is its effectiveness at brand building. In fact, I have seen very little evidence that any kind of online advertising has built a substantial consumer-facing brand. I’m not talking about the tiny little fraction of brands that live on the Web only, like Airbnb or Uber. They have done okay. I’m talking about snacks, beers, cars, jeans, refrigerators or toothpaste. 20 years after its introduction, where are the consumer-facing brands that online advertising has built? I can’t find any. And that’s the highest goal of advertising — to build a self-sustaining brand. If you can’t do that, you may be a direct marketing force, but not a strong advertising medium. To me, online advertising is simply the next generation of what we used to call junk mail.
That’s a harsh statement.
It’s the truth. There are two lineages of advertising: Madison Avenue style brand building advertising on one side, and direct response advertising on the other. The advertising industry thought that online advertising would come from Madison Avenue. In fact, it derives from direct response junk mail. Let’s not forget: according to a study done by McKinsey, email marketing is 40 times as effective as social media. The effectiveness of online advertising — with an average click rate of banner ads that is 8 in 10,000 — is simply a delusion.

Bob Hoffman: Online advertising is the next generation of what we used to call junk mail

Hasn’t the ad industry always been prone to hyping the “next big thing”? Radio was declared the killer of print and outdoor; TV the killer of print and outdoor and radio; direct marketing the killer of print and outdoor and radio and TV.
You’re right. We don’t learn from history. We are going through the same cycles of delusions again and again. In the advertising business, there’s always something that’s dead and something that’s going to change everything. Advertising is probably the trendiest business in the world. As soon as something becomes hip, everyone will jump from this thing to that thing. The whole history of predictions about advertising is a full joke. The so-called experts know nothing. Just go back ten years and look at what was written. The 30-second spot should be long dead by now.
How is the reaction to your critique of what you call the “digital delusion”? Who praises you? Who wants to see you burn?
The people who want to see me burn mainly come from the large ad agencies because they have discovered a new and valuable source of income: online advertising. It’s very difficult to convince someone of something when their livelihood depends on the exact opposite. In this case, the facts just don’t matter, even when they come from highly reliable sources. On the other side, there are many people who share my views and are happy to have found a spokesman. And third, there’s a funny group in the middle. Those are the people who agree with what I say but are afraid to say it, too. There’s a lot fear in the agency business — particularly among the senior people — to be seen as old. That’s the worst thing that can happen to you in the advertising industry. If you don’t follow the line, if you stand up and say that digital advertising is corrupt and ineffective and that social media marketing is not going to do for a client’s brand what everyone thinks it is going to do, you risk losing your job. We are dealing with a full-blown ideology here.
Is there any hope? Do you think that in a couple of years, online advertising will become just another channel in the marketing mix, alongside other former “disruptive” media like radio, TV and direct marketing?
I doubt it. It’s like bloodletting. For 2000 years, doctors thought that it would heal diseases. Because that’s what they were taught. The same thing with online advertising. People in marketing have been taught for 20 years that traditional advertising is dying and that digital marketing is the universal panacea. But it’s not.
What do you think of native advertising? Is this the way to go, particularly in the age of adblocking?
No. Native advertising not only corrupts the advertising industry, but the news industry, too. It’s advertising disguised as journalism. That’s one of the problems I have with online advertising: it tries to trick people. Traditional advertising has never tried to fool anyone. When a TV commercial comes on, people instantly know what it is — it’s advertising. The same with a print ad, a billboard or a radio commercial. Online advertising, however, is very often stealth advertising, in particular native advertising.
Yet, even “The New York Times” and “The Guardian” are doing it, because they’re desperate for ad revenues. They don’t seem to have a choice.
Of course they have a choice. But they prefer to degrade their reputations. It cannot end well for them. But let me be clear: I’m not against online advertising per se. What I’m against is the corruption that has come as a result of ad tech. Do you know whom the Association of National Advertisers is hiring to find out what’s happening with their billions of online advertising dollars? Former FBI agents. I think that says it all.

Interview: Dominik Imseng, author of “Ugly Is Only Skin-Deep: The Story of the Ads That Changed the World”:

Digital Vault

The intersection of Digital + Media + Marketing

Dominik Imseng

Written by

Author of “Ugly Is Only Skin-Deep: The Story of the Ads That Changed the World”:

Digital Vault

The intersection of Digital + Media + Marketing

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