A funny thing happened at Procter and Gamble in the last quarter of 2016. P&G manufactures hundreds and hundreds of consumer products, and with annual revenues of over $65 billion a year is one of the largest advertisers in the world — it spends something like $8 billion a year — and in the final quarter of last year it made a significant change. It cut $140 million from its budget for digital advertising, just in that quarter. That amounts to a reduction of $1.5 million per day. And nothing happened.
Let’s be clear about what digital advertising is. It’s the ad that pops into view in the middle of your Facebook page, or your Google search, or that suddenly obscures an article you’re reading until you can figure out how to get rid of it. Or, and this is my personal favorite, it’s the video that starts playing loudly despite the fact that you have your computer sound muted; and after you mute your sound again, the ad simply unmutes it and carries on. It’s the ad for a new refrigerator that appears on just about every page you look at, right after you send an email to a friend about looking for refrigerators.
What seems increasingly creepy to you and me — there have been many days I have felt like checking behind the bookcase, to see if there is someone in here with me, taking notes — is the foundation of the fortunes being built and endlessly augmented by Facebook, Google, Amazon and hundreds of ad buying agencies. These highly targeted ads, whose effectiveness you can measure, in real time, by counting the people who click on them (as in, make a conscious decision to learn more), have been the latest and richest sneeze in advertising for years now.
But the people who pay for this intrusive crap — not only P&G but Unilever, another consumer giant who has cut back digital advertising by more than 50%, have been wrinkling their noses at an unpleasant odor that has been emanating from the digital-ad patch. At an advertising conference back in January, chief P&G brands officer Marc Pritchard celebrated the high quality videos made possible by the digital revolution online, but then said that in addition:
“we have seen an exponential increase in, well … crap. Craft or crap? Technology enables both and all too often, the outcome has been more crappy advertising accompanied by even crappier viewing experiences. All of us in this room bombard consumers with thousands of ads a day, subject them to endless ad load times, interrupt them with pop-ups, and overpopulate their screens and feeds with just plain bad work. Is it any wonder ad blockers are growing 40 percent?”
That’s quite an endorsement of the thing on which you’re lavishing billions of dollars — “crappy advertising accompanied by even crappier viewing experiences.” Two specific things were increasingly bothering Pritchard and his peers: one, their ads were being placed by automation, and were showing up on websites that made their flesh crawl, with which they did not wish to be associated, and there didn’t seem to be any way of correcting that; and two, research was first hinting, and then confirming, that most of the clicks the ads were getting — that indicated their success, and for which they were charged money — were coming not from people but from bots, little automated apps that were manipulating data and getting into mischief but have never, ever, bought a product.
Finally, P&G acted on its suspicions and cut $140 million from its budget for the crappy crap — and nothing happened. Sales for the period increased anyway. Which told them, pretty conclusively, that the $140 million they had spent for the crappy crap the previous quarter had bought them not one thing.
Which raises these two questions among many: how good are the salespeople at Facebook, Google, et al, who have been able to cadge this much money out of companies as big and as sophisticated as P&G and Unilever, for this long, for something that did not work worth a damn; and, how long will Facebook, for example, be valued in the stock market as more valuable than Exxon, after it becomes generally accepted that one of its main products is crappy crap that doesn’t work?