Wednesday, March 10, 2010

Back Up the Rabbit Hole: an Interview with Jeff Einstein

Pete – Welcome, Jeff. What evidence can you cite to support
your assertion that we’ve passed through the looking glass
and plunged down the rabbit hole?

Jeff – We can begin with a litany of online performance
indicators, including the prevalence of sub-$1 CPMs, click-
through rates firmly ensconced at statistical zero, click
fraud estimates of anywhere from 25-85% (depending on your
choice of networks and industry experts), not to mention
the insolvency and failure of thousands of media franchises,
many of them brand names with long, distinguished track
records. In more sober environments with more sober leader-
ship such massive failure and systemic collapse might give
us pause, but as an industry we’ve responded instead by
speeding up, doubli ng down and plunging ourselves even
deeper down the rabbit hole in Lewis Carroll’s vision of
madness, a world where up is down and down is up. If any-
thing, we’ve accelerated our commitments to the very same
insanity that got us here in the first place.

Pete – That’s pretty harsh. Aren’t many of our problems
right now simple byproducts of a deep recession?

Jeff – No, I don’t think so. While the recession certainly
hurts like crazy, our problems don’t result from the
recession as much as the recession results from our
problems. Performance across all channels has actually
been in decline for a couple of decades now, regardless
of the economy and in spite of explosive industry growth.

Pete – Then why do you think media performance is so anemic
these days?

Jeff – Mostly because media performance is a myth to begin
with. We’re chasing a great white whale. Media aren’t
supposed to perform. The message should perform, not the
media. The onus to perform should weigh on the advertisers
and the agencies, not on the publishers and content
providers; their only job is to aggregate and somehow
entertain or inform an audience, the same now as it was
fifty years ago.

Only with the digitally-driven ascent of discrete media
agencies as the crown jewels of global media holding
companies did we suddenly discover an excuse to divorce
the medium from the message and shift the onus of
performance from the message to the medium in the process.
But in truth, the media simply can’t perform because they
were never designed to. And that’s why, despite all the lip
service, advertisers and agencies don’t buy performance.
They buy ubiquity, the exact opposite. Rather than assume
responsibility for their own lack of performance,
advertisers and agencies would rather hedge their bets and
buy more and more of something that’s worth less and less
with each passing day. Big advertisers and big agencies
talk performance, but they buy ubiquity because they know
the media can’t perform.

Pete – Lots of industry folks are calling for a complete
online marketing overhaul, including new metrics, more
sophisticated targeting technologies, more research, more
data-based marketing, and more social media. What do you
think?

Jeff – I think new metrics are just another way to shoot
the messenger, another way to rearrange the deck chairs on
a sinking ship. Besides, in marketing applications metrics
never really describe what works as much as they describe
what can be sold. We already know that the continued growth
of online ad budgets will rely increasingly on our ability
to sell more branding, in no small part because we’ve
invested so heavily in ad serving technologies and infra-
structure over the past 15 years. The perceived need to
sell more branding explains why the new metrics being
proposed now all seek to measure the very things the
industry arrogantly dismissed as useless and effete back
in the mid-1990s, all the intangibles that drove the
growth of great branding media like print, radio and TV
for decades. We cut off our noses to spite our faces 15
years ago in a foolish and immature effort to distinguish
digital media from their analog counterparts, and now the
bed we’ve made for ourselves is wrecking everyone’s sleep,
our own not least. Each new metric just adds another rifle
to the circular firing squad.

Pete – What about behavioral targeting?

Jeff – Anyone with any historical perspective will right-
fully conclude that each additional layer of targeting
technology increases costs and reduces performance. As
a result, each additional layer of targeting technology
further burdens publishers and networks alike. The promise
of digital scale starts working against them; the more
traffic they attract and the more advertising they sell,
the faster they go out of business. McLuhan had it right:
any medium pushed to extreme will begin to operate in
reverse.

Sophisticated targeting technologies don’t work because
commercial media are now and always have been on-demand,
and in an on-demand media universe it simply makes far
less sense to target the audience and far more sense to
let the audience target us instead, exactly why search
works so much better than display advertising, and exactly
– despite industry claims to the contrary — why neither
search nor targeted display advertising is scalable at the
end of the day. This much we know with absolute certainty:
no one demands more advertising, relevant or otherwise,
and everyone is equipped to avoid it. That’s the primary
reason why online advertising fails at least 99.9 percent
of the time, and why TV and radio executives are having
nervous breakdowns.

Pete – Should I assume from your aversion to behavioral
targeting that you’re also no fan of data-based marketing?

Read the full interview here…
Back Up the Rabbit Hole: an Interview with Jeff Einstein

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