Information Asymmetries in Digital Media Will Eat You Alive. If You Let Them.

The ANA’s Programmatic Media Supply Chain Transparency Study finally elevates the role that systemic “information asymmetries” play in allowing programmatic waste to persist.

You should also check out the ANA’s Qualitative Report from August. It includes a wealth of interview quotes; everything the study participants were willing to tell the ANA under condition of anonymity. Together, these reports are real eye-openers.

These reports tell us quite definitively that information asymmetries (or “knowledge gaps,” which is a bit more succinct) are causing advertisers to unknowingly pour their budgets into lousy bidding environments, inventory, and audiences, not because they have access to bad information, but because they simply don’t know what information to ask for in the first place.

I want to dive into what’s gotten us here on a first-principles basis, as I find the topic fascinating (in fact, I explored “knowledge asymmetries” just a few weeks ago on The AdPod before the ANA report was released).

Reactive tactics are important too, but until you understand a few fundamental truths, you won’t understand what makes digital media so dangerous when you find yourself on the wrong side of an information asymmetry.

Specifically, I’m going to explore three principles:

  1. Information asymmetries and lies are not the same thing
  2. There’s no referee in digital
  3. You’re not buying a commodity product

Information Asymmetries and Lies Are Not the Same Thing

Many information asymmetries are not powered by lies but by omission.

If someone is making money off information you don’t have, not only are they disincentivized from giving you that information, they won’t even tell you it exists. And this is convenient because they can profit from the asymmetry without ever telling a lie or doing anything out of the ordinary from your perspective.

Consider MFA inventory: sellers of such inventory are never going to voluntarily add extra fields to their impression reports showing how many other ad placements were simultaneously loaded on the page, or how many ad placements didn’t meet viewability standards.

Such fields would add a great deal more context as to what the ‘Impressions’ reporting field actually means. But no, it’s more convenient to omit those other reporting fields and let the advertiser or their agency do a lot of extra homework for themselves (or enlist an attention metrics vendor).

Digital media is filled with such gotchas. It’s a real jungle out there.

There’s No Referee in Digital

Whether we realize it or not, we all carry around with us the nearly 30-year-old assumption that digital media is more rules-based and controllable than the “fuzzy” broadcast and physical media of yesteryear (e.g., radio and magazines).

However, thinking that digital media is inherently rules-based is an assumption that can get you into trouble because there is no referee enforcing these supposed rules.

The programmatic supply chain is so immense, diffuse, and complex that no one is “minding the store.”

Here’s an example:

The ANA report recommends that advertisers and buyers use inclusion lists instead of exclusion lists. The inferiority of exclusion lists is obvious once you know just one thing:

However fast you can spot bad publishers in your reports and exclude them, shady operators can launch new garbage sites and plug them into the programmatic supply chain 100x faster. You will never, ever be able to outrun bad actors.

Also, an ecosystem full of information asymmetries disincentivizes very many people from telling you this fact.

Case in point: the “website reduction” experience of JPMorgan Chase in 2017 as noted in the ANA report. The company was running ads on 400,000 separate sites and subsequently saw zero drop in performance after reducing that to an inclusion list of only 4,000 sites.

400,000 sites! If anyone along the food chain was minding the store, might they have raised their hand when JPMorgan Chase crossed the 100,000 site milestone, let alone 200,000 or 300,000?

If JPMorgan Chase left things on autopilot, how many sites might they have been allowed to spend across? Four million? Four billion?

In digital, there’s no referee who’s going to step in, so use inclusion lists and make sure the field of play is small enough that you can see the whole thing yourself.

You’re Not Buying a Commodity Product

This last principle is simple: the industry-standard nature of terms like “impressions” and “users” implies that these are universally-standardized commodities; that they are like eggs or barrels of oil.

Nothing could be further from the truth. An impression could be a bot loading an MFA site or it could be a high-net-worth executive loading the homepage of The Wall Street Journal.

When advertising broke the constraints of broadcast and physical media, it essentially entered the limitless world of the might-not-be-real.

That user? They might be a real human doing normal human stuff. They also might not. That click? Might be a real human genuinely interested in an ad, and it might be a real human fat-fingering a CLOSE button.

The industry has made valiant attempts (some successful; some not) to bring about standardization, but even the most rigorous standards can be thwarted and can even become a hiding place for bad actors who cloak themselves in the language of standardization.

This doesn’t mean that basic metrics like impressions deserve to be thrown out. Obviously, advertisers need ways of measuring audience reach. And obviously, genuine industry standards help a great deal.

Instead, what this means is not allowing garbage to “hide” inside ad budgets just because that garbage happens to use the same words to label its reporting fields as the legit stuff. Digital media is not a commodity and the terms we use every day have little intrinsic meaning aside from being industry shorthand.

Go Read the Report

That’s all I have to say for now. But go read the ANA report. If you’re on the buy side, get educated so you can begin asking the questions it recommends. If you’re on the sell side, get educated so you can begin answering those questions, because I expect this report will keep the industry talking into 2024 and beyond.