Ad spending to a false God

Procter & Gamble's recent publication of its huge cuts to digital ad spend last quarter (between $100m and $140m) marks, perhaps, the latest nail in the coffin of digital advertising. The FMCG giant's scepticism towards digital is the latest in a long series of backlashes against the “brand safety” scandal earlier this year, which played out primarily on YouTube.

In a striking turn of events, the vogue for so-called “programmatic” advertising has dissolved in the wake of a series of highly publicised gaffes. Argos ads, for example, appeared on videos earlier this year promoting the neo-Nazi group “Combat 18”; and brands from Marie Curie (the hospice charity) to Mercedes Benz found their ads linked to terrorist broadcasts and other forms of hate-speech.

Google's algorithms, which power YouTube's ad service, were supposed to be intelligent enough to help brands to reach precise target audiences, by having their ads appear on or next to appropriate content uploaded by appropriate channels; but these scandals have dangerously harmed “brand safety” by fostering the illusion, however inaccurate, that these brands are happy to be associated with such offensive content. Moreover, these distasteful channels are directly receiving ad revenue from those brands which, thanks to Google's faulty algorithms, have ended up advertising on their videos.

Beyond the obvious ethical implications of this “brand safety” scandal, it is an open question whether digital advertising is effective for brands even when it does target the appropriate audiences. Procter & Gamble's dramatic reduction of digital ad spend would imply that the company does not believe digital to be a worthwhile channel for its advertising. This position is borne out by the fact that most YouTube users are far too impatient to sit through a thirty-second advert; and some of the strategies used by brands to prevent users from clicking away after the five-second grace period customary for the majority of YouTube ads are telling, to say the least. The latest effort by stock-trader Trading 212, for example, sees a puppy-eyed man staring into the camera and resignedly telling the viewer to “Go on, skip this ad…” – it seems that reverse psychology has become the last resort for brands facing up to a supremely sceptical and self-aware consumer base.

Digital will, of course, remain a useful channel for brands; and Google will no doubt be working hard to make its algorithms scandal-proof for the future. But it is likely that the appeal of digital ad spend has been slightly overstated, and that digital will settle down to become one of many valuable channels instead of the single, exaggerated master-channel it has been claimed to be.