Internet Ads Are A Failed State

If you haven’t heard the latest news in the series of blows to the internet advertising ecosystem, it’s maybe the worst thing to happen yet, which is really saying something given the many new lows bad actors have already been setting for the field in the past several years.

According to reporting by Reuters about research done by Citizen Labs, a firm called Discover-Tech utilized malware including the already infamous Candiru to perform illegal surveillance that seems to be related to actual international espionage.

Is this a wild outlier we don’t need to worry about? Here’s a quote from one of the researchers:

That seems like a “no” from them!

We here at Daypart are familiar with the general work Citizen Lab does and consider it to be high value and high integrity, so we take statements like this seriously.

Even famous defenders of open web advertising are releasing statements that very much seem to start with an implied “we know things look bad” framing.

We’re not being literal nor looking to quibble over textbook definitions, although we could, given the political science background of some of our employees. Come at us, bros!

Internet advertising is a global commercial commons in which many varied parties, on every side imaginable of a transaction, do business. In order to facilitate that business and make it easy for more companies to do it well and have trust in it, overarching rules that range from real laws, to guidelines and standards, and a wealth of certifications have emerged.

It is also very much the domain of real nation states, which have had a strong impact on the space through legislation.

The EU’s GDPR framework and California’s CCPA are the primary drivers of ad privacy measure adoption, and have come to have greater weight as these join with evolving AI legislation, giving birth to more concrete and important notions of Technological Sovereignty and Internet Sovereignty than ever before.

Long before the internet, the US government had a hand in modern advertising via the Media Ratings Council, which sought to bring some order to the currencies of the ad world rooted in measurement decisions.

NGO-like bodies such as the Internet Advertising Bureau came about, pooling funding from where they could get it (a problem, sometimes), and develop standards they hoped would be adopted and in turn help make a healthier ad supported internet.

So we have something like a state: a space consistent and regulated and understandable enough in which you can safely live your life as a digital advertiser, needing only to concern yourself with personal matters and trust greater powers to make it safe and productive for you to do so.

How did it fall apart?

The thing about internet advertising is it needs internet users.

Users have not cooperated with the grand plans of many independent and/or open web focused parties, flocking in droves to the so-called walled gardens of social media, search engines, YouTube, and now LLM driven chat bots and discovery engines. Substack and related platforms deserve a mention here, too.

These actors tend to move unilaterally and ignore governance frameworks others place on them.

The response of everyone else has generally been to build an ads ecosystem for the rest of the web to prop it up in the face of these behemoths and cling to whatever this year’s kind of United Nations seems to be, hoping to impose positive order and avoid a tragedy of the commons.

Lately there has been a lot of thought along the lines of: if we had built it, they would have come!

Allegedly, we failed to do all that.

We didn’t create a healthy commercial environment to support the open web, which if we had done so, would have created such great content and user experiences that the beautiful open web would have triumphed over the evil walled gardens.

At some level of investment, sure, this would be true; it would just require some alternate universe occurrence along the lines of “95% of advertisers refuse to ever even try Facebook Ads and so it just goes away.”

You really would need lots of advertisers, including small businesses, to completely ignore lots of human eyeballs that quickly migrated to internet megaplatforms, until those megaplatforms ran out of investor money and died.

Let’s move out of hypotheticals and talk about the REAL user experience the open web has created, for real people in the real world we currently live in.

Let’s look at the actual alternative provided to the walled gardens.

There’s a long, sordid history of terrible user experiences and dicey monetization practices that are arguably counterproductive to what you’re even trying to do on the internet at that moment, but let me just recenter all of this on the incident that is why I am writing this article:

Web ads were used to infect computers with malware for the kind of international espionage that potentially endangered peoples’ lives.

This isn’t the kind of failure of basic duties akin to a doctor accidentally harming someone while trying to treat them.

This is more like a doctor allowing the KGB to hang out in their waiting room for $0.02 per patient that comes in.

if you’re going to jump in and tell me internet ad fraud and associated crimes have been supporting some of the worst human enterprises in existence for a long time before this, believe me: I know!

And thank you for further proving my point. I agree, this latest incident is merely a shocking exclamation point on the abominable run-on sentence that has been the past couple decades in digital advertising.

Standing against the rising tide of allegedly monopolistic megaplatforms are…an opposition that doesn’t look like it ended up doing too much better for anyone.

Often times when you bring up havoc that ads are wreaking on the web, the topic of ad blocking will come up, and someone usually evokes the threat of “if things keep going like this, ad blocking rates will blot out all revenue!”

It’s wishful thinking that consumers will fix the problem for us, which is a bit embarrassing as far as things to wish for go.

The issue here is that ad blocking rates, as well as anyone can measure them, seem to have stabilized around a little above 30% in developed countries.

There is some evidence that blocking is demographically loaded to get worse, but there’s contradicting data on this as well.

I don’t think ad blocking levels stabilizing is so much a good sign as it is potentially dangerous false comfort against a larger, more important reality-revenue growth is still aggregating in places that aren’t the open web, because people aren’t even spending high commercial value time on the open web.

There’s nobody blocking your ads when there’s nobody loading the page.

It’s also worth noting that some prior havens from ad blocking are getting their due punishment as the AI wave and increasing interest in “jailbreaking” or at least wresting some control over hardware devices collide.

Smart TVs, both a major growth vector for the non-walled garden advertising world and the newest notorious home of rampant advertising fraud, are now subject to hobbyists (and soon, perhaps, professionals) modifying their operating systems and software to get rid of bad user experience elements forced on them which includes, you guessed it: ads!

In a world where digital ads can be a channel for malware at worst, and tolerable at best, who can blame these consumers?

Until things get better, we here at Daypart upgrading our consumer advisory rating on the necessity of an ad blocker from “noise cancelling headphones” to “prophylactic.” Stay tuned to see if it reaches Tazer status!

This is all something that is more directly happening to internet users, and to website operators, than it is advertisers themselves.

That being said, if you imagine yourself as a vendor going out to a market to hoc your wares, it’s getting a bit like a trade show under a highway overpass that people keep disappearing from, and this has long term implications.

You should be investing in places where, wrong or right, there is still a lot of implicit user trust, which is evidenced in the form of high value time spent there and attention, in some form, paid to it.

We say “wrong or right” because there’s a lot of feeling, clearly, that users are being bamboozled and manipulated into trusting these large platforms, which are actually even worse than the open web.

Here’s where we will highlight an idea we have at Daypart that may be very difficult for some people who read this: we’re not here to judge users for where they spend their time, what they pay attention to, and what makes them decide to spend their money on something.

When we say “performance anti-fraud,” this is one way, and maybe the best way, to understand what we’re talking about. We have strong opinions, and take real positions, but none of them are that there’s some inevitable change coming to consumer internet behavior because the current behavior is somehow “wrong.”

Here’s something that may also blow your mind: we are also not going to tell advertisers that their interpretation of what constitutes results and success are incorrect, either.

Are you using a “golden triangle” of Marketing Mix Modeling, Experimentation, and complex attribution to determine what ads placed where are working for your company? Cool.

Are you using platform metrics of the most vanilla kind, last click and all, to determine what’s helping your grow? Equally cool. If you believe this is what you should be doing to grow your business, we believe you.

Daypart is not a measurement company, and it never will be.

Daypart is here to help companies succeed more, based on their own measurement, that they already use and believe in.

That’s performance anti-fraud.

If a company’s measurement evolves, Daypart will evolve with it-because the platform will be the client’s to use as they see fit, and when their use case changes, they can use Daypart to block fraud based on that new notion of performance.

In the meantime, stay safe out there, and please try and take care of the internet’s users, as well-they are real people who make their own decisions, and you advertise at their mercy, so show them some yourselves.