Explain It To Me Like I’m A Baby! Digital Advertising Explainer For Consumers
Explain it to me like I'm a BABY!
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Remember those creepy ads that follow you around on the web? Well, that’s the way digital advertising works now. Marketers have been convinced by digital advertising technology companies (“adtech” for short) that targeting audiences is better than placing ads on trusted sites that have real human audiences. Why? How?
Let’s take a look back at the last 20 years of digital advertising to see how we got here.
Web 1.0 through Web 3.0
In the mid-90s when the Internet spilled out of universities and became the public Web 1.0, big publishers of magazines and other media started to put their content online. Large portal sites like Yahoo.com were also created. Many millions of people went to get their news, weather, sports scores, stock quotes, and email all in one place. When users visited the sites and looked at web pages, ads loaded, in a way similar to ads on magazine pages. At that time, content was put online by developers who knew how to code HTML.
Then, in the early 2000s blogging platforms like WordPress and Blogger emerged. Those platforms enabled more people to get content online, without knowing how to code HTML. Web 2.0 as we called it enabled more people to just post content and pictures to their blogs. A larger number of websites were created by a larger number of people. And some of these grew into big blogs like Gizmodo, Engadget, etc. All of these sites made money by showing ads.
In the mid- to late-2000s, we saw the rise of Web 3.0; social networks like Facebook, Twitter, and YouTube were launched. These enabled even mass consumers to “get content online” simply by writing short tweets, making Facebook posts, or uploading videos to YouTube. We call this UGC (user-generated content). The ease of getting content online meant that the amount of digital content and the number of sites exploded.
The Long Tail and Ad Tech
In 2006, Chris Anderson’s book called “The Long Tail” was published. It popularized the notion that there were a large number of small sites that people went to for niche content - sometimes super niche, like how to raise a pet rattlesnakes. Each site would be so niche that it wouldn’t have a large amount of traffic, certainly not enough to enable marketers to reach large audiences. But together, a very large number of these small sites could give marketers the scale of audience they were looking for.
This is when the idea of audience targeting came about. Instead of placing ads on large publisher sites, what if we could target individual people with the right ad regardless of where they went online, including these long tail sites? In order to do this, technology needed to be created, so we could track the users online. This is what gave rise to “surveillance marketing” - a less favorable view of what digital marketing is and does to consumers’ privacy. Further, it would be too much work for marketers to go to hundreds of small sites and negotiate with each of them to place ads on their sites. New technology was needed to aggregate tens of thousands of small sites together so that marketers had one place to go to buy ads across all of them at once. These aggregators were dubbed ad exchanges because they connected buyers of ads (marketers) and sellers of ads (websites) similar to the Wall Street stock exchange.
Ad tech even copied the concept of auctioning every single ad opportunity. When a page loaded, the ad slots on the page would call out to the exchange and ask “who wants to bid on this ad slot to place an ad?” Multiple marketers would submit bids, and the highest bid won the auction and their ad was placed, within 50 milliseconds of when the process started. This is what is known as “real time bidding” (RTB). As you can imagine, it required more and more powerful servers and faster and faster connections to achieve this and continue to scale up. All of this was great for ad tech because they made money from selling those technologies and services.
Creepy Surveillance Marketing
Now that hundreds of thousands of sites were aggregated together into exchanges so ads could be placed on any one of them in milliseconds, ad tech needed to fulfill their claim of being able to target the right person at the right time with the right ad, no matter what site they showed up on. To do that, they needed to collect data about the user, to target the ads better. So they cut deals with as many sites as possible to put their trackers on their sites. These are snippets of code that would record where users went, what they looked at or searched for, or even purchased; and then set a cookie to know when that user came back or showed up elsewhere.
Consumers see this as the large number of trackers on the sites that they visit, and that slow down their browsing experience. After all, it takes time, bandwidth, and computing power to load and execute 90 ad tech trackers from 90 other domains while the consumer is waiting for the page to load. The ad tech companies behind the trackers use algorithms to predict what consumers would like. For example, if the user visited a variety of outdoorsy sites, they assume the user is an “outdoor enthusiast.” Or if you searched for a baby gift on Amazon, they assume you just had a baby. Yeah, that may or may not be actually accurate; but that’s how their algorithms work.
This is why you see creepy ads following you around the web. It’s ad tech companies desperately trying to show you what they think is the right ad. And all of us have experienced irrelevant ads being repeatedly shown to us even though we were just looking something up online once or we had already purchased the item. The annoyance and volume of ads have led to consumers adopting ad blockers to halt the ads and the trackers.
As a marketer, this should make you wonder if those ad tech promises were all that they were cracked up to be. The ad tech salesmen will tell you “data is the new oil.” But upon further consideration, you might find that some of it is no more than digital snake-oil. Look into it; it’s your ad budgets at stake.
Gloss