Why Brands Continue to Invest in Digital Advertising, Despite the Industry’s Many Problems

Ad fraud and brand safety issues persist

Industry players weigh in on an increasingly digital marketplace.
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Dating back to Advertising Week 2016, the last year has been a virtual hail storm for digital advertising, a narrative that started with Facebook’s video metrics troubles, then focused on YouTube’s brand safety issues and was kept on point by Procter & Gamble marketing chief Marc Pritchard calling for fixes to occur on his timeline. The platforms space has generally gone inside for cover while finally appearing to address problems head on such as questionable metrics, brand safety, bot fraud, alleged billing malpractices and walled data.

So now that we’re at Advertising Week 2017, due to the nasty climate of late, digital’s longstanding, upward trajectory is going to level off noticeably, right? Not really, not really at all: According to eMarketer’s stats yesterday, digital ad spends will increase 15.9 percent in 2017, hitting $83 billion.

“Big brands cannot suddenly pull out in any kind of mass-scale way,” said Kevin Akeroyd, global CEO of Cision, a PR-minded software player. Akeroyd, a marketing technology veteran, is best known for building Oracle’s marketing cloud through a series of key acquisitions before helming Cision last year.

“[Advertisers] are not going to be able to back out of the decade-long investment they’ve made in digital,” he continued. “Their P&L (profit and loss statement) simply isn’t going to allow it, right? They can’t say, ‘Well, I took the bad advertising out of my budget and that’s why I missed my earnings per share.’ I don’t think Wall Street is going to allow them to do that.”

What’s more, New York-based eMarketer also recently increased its estimates for cord cutters from 2017 to 2021 and predicts that by 2021, they will nearly double—from 22.2 million in 2017 to 40.1 million in 2021—and will almost be the same as “cord-nevers,” people who have never subscribed to cable or satellite. Plain and simple, these kinds of people live life online.

“Ultimately, advertisers need to be where consumers are—and they are on digital,” said Scott Knoll, CEO and president of Integral Ad Science. “We, as a society, need to figure out how to advertise digitally. In terms of Marc Pritchard, there are a lot of other folks saying the same thing.”

In other words, while the whole thing is a work in progress, the money is still piling up. Adweek reached out to a handful of brand marketers to see if they’d reveal whether their fourth quarter digital ad budgets would be up or down year over year. None were willing to comply, so we asked a few agencies about what their clients were going to do.

“We plan to increase digital ad budgets during Q4, and concerns around brand safety and ad fraud have not had any impact at all on either budgeting or our clients’ plans,” said Michael Mothner, CEO, Wpromote, a search-focused shop.

“Despite the issues that still exist within the digital ecosystem and supply chain, we’re still seeing brands increase their investment—or maintain levels of spend, at the least,” added Mike Racic, iCrossing’s president of media services.

“While there is a lot of work left to be done by all parties,” Raci said, “budgets are increasing because we’re finally seeing a bit of a turning point for brands who better understand the pitfalls of the digital world [and] are savvy enough to know what to look for with respect to fraud or brand safety issues. Or, at a minimum, more clients are becoming smart enough to ask the right questions…to help them set and meet standards for their marketing performance.”

It’s not just search and social marketers, either. Justin Warshavsky, a media planner with CTP, said yesterday that programmatic ads for a key nonprofit client worked better than any other digital avenue, including Facebook and Amazon. Programmatic spending isn’t going anywhere, he said.

Meanwhile, CMOs’ new balancing act of improving ROI—cutting out bad online advertising, in other words—while increasing sales will be an intriguing area to watch in the coming months.

“You are going to see the digital ad spending become more responsible, held more accountable,” said Akeroyd of Cision. “And quite frankly, it is going to compress a little bit, and you are going to see where [brands] look more to earned media. They are going to look to fill that void.”