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Marketoonist is the thought bubble of Tom Fishburne. Marketing cartoons, content marketing with a sense of humor, keynote speaking.

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the state of digital advertising

April 25, 2021

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Last year PwC investigated where the money goes in digital advertising, at the behest of the Incorporated Society of British Advertisers (ISBA).  This wasn’t an easy task, as a single programmatic ad placement can involve 20 different players, each taking a cut.

PwC found that a whopping half (49%) of digital ad spending is syphoned off before it reaches publishers.  They tracked spending to agencies, demand exchanges, supply exchanges, and a slew of ad tech vendors.  But most alarmingly, 15% of digital ad spending, a third of what gets syphoned off, is a complete mystery.  Even through an audit, PwC couldn’t account for where it went.

This 50/50 split of “non-working” and “working” dollars in digital media echoes the famous observation from 19th century retailer, John Wanamaker: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

And the 51% that actually reaches publishers has its own host of problems, including bot fraud.  The World Federation of Advertisers (WFA) estimates that ad fraud will become the biggest market for organized crime by 2025.

The state of digital advertising once prompted media expert Augustine Fou to suggest cutting out the middlemen and returning to “buy media as if it’s 1995.” He wrote:

“What if marketers allocated a portion of their media spending directly to publishers… They will run your ads for you — just like in 1995. The marketer could conceivably pay far less overall dollars AND the publisher would definitely get multiples more dollars.”

A couple years ago, Marc Pritchard, CMO of P&G, the world’s biggest advertiser, started a mission to help clean up the digital advertising supply chain.  He shared this observation that resonated with me:

“As we all chased the Holy Grail of digital, self-included, we were relinquishing too much control — blinded by shiny objects, overwhelmed by big data, and ceding power to algorithms.”

Here are a few related cartoons I’ve drawn over the years:

ad viewability - August 2015

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we’re going digital - April 2012

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8 types of annoying ads - June 2017

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the evolution of advertising - November 2017

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