Data-driven Online Marketing: A Critical Examination

Esteemed professional online advertising trade associations and trade media, let's make the topic of "data-driven marketing" the central point of discussion at DMEXCO.

In the world of online marketing, we often claim to operate "data-driven", especially when discussing targeting and tracking. Increasingly, tools are leaning into artificial intelligence. To serve personalized advertisements, we depend on a vast range of technologies and data sources: From Data Management Platforms (DMPs) to cookies, identifiers, 1st party data, specifically defined target groups (audiences), and Data Clean Rooms.

Despite this emphasis on data-driven actions, why does our daily reality present the following challenges?

• For years, experts like Dr. Augustine Fou, Tim Hwang, and Bob Hoffman have highlighted an estimated AdFraud volume of $70 billion annually. This is primarily caused by bots/non-human traffic, click fraud, domain spoofing, cookie stuffing, geo masking, ad injection, ad stacking, among other prevalent methods.
• Organizations such as StopFundingHateNow and the Check My Ads Institute indicate on a weekly basis that budgets, amounting to several million EUR, finance organizations and dubious sites that glorify violence or promote political extremism, and campaigns are placed on low-quality content websites (MFA) (in the US, according to the first ANA programmatic media supply chain transparency study, 15% of the spendings).
• Since the end of last year, Adalytics has pointed out that YouTube isn't adhering to its terms. Advertisers could hardly or not at all recognize this from the reports, revealing not isolated incidents but systemic issues. Recently, adult advertising was displayed on children's pages. In Germany, there's limited reporting on this, though German agencies and advertisers are equally affected. Fortunately, The Guardian, The Wall Street Journal, and The New York Times, as well as Anglo-American trade media, are not overlooking this issue.

A review of advertising campaigns often indicates that the data-driven approach is sometimes missing the mark. We even abstain from data at crucial interfaces, especially with major providers. But such verification and subsequent optimization are essential for genuinely data-driven action. How can we claim to be data-driven if we're uncertain on which domains and apps our "data-driven" campaigns operate? Whether the ads were even displayed? The transparency we advocate is far from satisfactory.

A primary reason for these challenges is the asymmetric distribution of information. Major platforms aren't transparent and don't share all relevant data with advertisers and agencies. When this data is available, it's frequently not thoroughly analyzed or simply disregarded.

Furthermore, the so-called data-driven AdTech strategies have prioritized 1to1 advertising, assuming that the advertising environment was secondary, as long as the right individual was reached. However, this targeting approach hasn't worked as anticipated, especially with stricter data protection regulations in place. An alternative emphasizes the advertising environment because quality websites promise a more targeted audience but also result in higher costs. The initial promise of programmatic AdTech - efficiency, transparency, and quality - hasn't been realized. Instead, low CPMs often lead to questionable ad placements and the mentioned Ad Fraud issues.

It's time our industry engages in an open discussion about our data-driven approach and what truly lies at the core of our field.

Tools like SSPs, DSPs, DMPs, cookies, identifiers, and Data Clean Rooms aren't ends in themselves; they serve the primary objective of our industry: effectively communicating advertising messages to people. Our emphasis on data should prioritize where we validate ROI and ensure advertisers aren't misled - as the examples above demonstrate on a grand scale. Let's use data to operate transparently and genuinely. Only then can we rightly call ourselves "Data Driven".

Dmexco, being one of the leading fairs for digital marketing, would be the perfect venue for this.