Content Recommendation Advertising Has A Bad Reputation, Is There A Fix?

9 December 2016 by Martin Delaney

As the industry grapples with unwinding the causes of ad blocking and fake news dissemination, scrutiny is now turning towards vendors that facilitate clickbait advertising. Whereas content recommendation ad networks used to evade serious inspection from a user experience standpoint, attitudes are now changing.

The impact of serving low-quality content recommendations is starting to be measured. Unsurprisingly, the conclusions are not good; ad cannibalization, reduced editorial integrity, loss of pageviews, data value erosion, and increased ad blocking usage.

All of these are serious consequences that ultimately contribute to the broader existential challenges that publishers face today. It’s simply not sustainable. So, what next?

Facing Reality

As some commentators have bluntly pointed out, fixing this problem is not going to be straightforward. Many publishers need those content recommendation ad network checks. This is not pocket change we are talking here, its millions of dollars.

Therefore, removing this type of ad inventory from the page is unrealistic. And, nor does it need to be removed. Content recommendations are not an inherently bad medium. In fact, quite the opposite — they provide a lot of value when executed properly.

What’s flawed is the infrastructure that powers content recommendation advertising. A narrow focus on developing economic models that prioritize clicks spurred a race to the bottom in ad quality. With revenue generation a key priority for most publishers, using click-weighted transaction systems to power ad creatives that mimic news articles inevitably causes clickbait to flourish.

Whilst other advertising formats, such as traditional display and video, have evolved significantly in recent years and are now supported by sophisticated technologies on both the buy and sell side, content recommendation advertising is lagging far behind. There just isn’t the appropriate level of ad serving controls, analytical tools, performance measurement, or creative opportunities for publishers to properly manage their inventory. This leads to a lack of transparency and an inability to sufficiently weed out bad actors and fully realize the value of the inventory.

Now that content recommendation advertising has become a major contributor to publisher P&L accounts, power in this sphere is shifting further away from content creators and into the hands of middlemen. With editorial integrity and audience attention undervalued, and with consumers becoming ever more disenfranchised with publishers that support low quality advertising experiences, it’s time to question whether or not this dynamic is appropriate — even if the upfront guarantees are eye-wateringly appealing.

A Big Problem To Tackle

Fundamentally, a complete overhaul of the technology used to transact this inventory is needed. The industry must move away from a reliance on closed networks and collectively build and connect an ecosystem of technologies that will liberate the buying and selling of content recommendation ads through a liquid marketplace. This will unshackle the constraints that currently burden the format and better serve the interests of publishers, marketers and consumers over the long-term.

In order for this to happen, the manner in which publishers and marketers view content recommendation advertising must first change. Right now, it deservedly has a bad reputation, but this view is stifling innovation. A combination of the low-grade ad content that so ubiquitously dominates recommendation widgets across the web, and their position on the page below the content, creates the illusion that they are of little value and ‘out of sight’ of readers. This inevitably makes it an easier decision for publisher executives to outsource the revenue to a third-party, when, in fact, the opposite is true.

Consumers spend a surprisingly large amount of time looking at, and engaging with, content recommendations. According to a recent IAB-commissioned eye-tracking study, they receive more consumer attention proportionally than all other major advertising formats. So much so, that in many cases, a traditional above the fold ad unit receives less visual consumer attention than a below the fold content recommendation widget per thousand pageviews. Therefore, assessing content recommendation inventory exclusively using metrics such as clicks or viewability alone is to grossly undervalue it.

Only through deeper cross-industry experimentation and research will the negative perceptions that plague content recommendations begin to dissipate. Crucially, this change in understanding is imperative if real progressive action is to occur.

More Revenue & Editorial Control

Two key areas need development. The first is, transacting the buying and selling of content recommendation ads via processes that draw upon a wider set of data and creative formats; this will increase the attractiveness of impressions, particularly to higher quality media buyers. Secondly, introducing better filtering tools that algorithmically analyse the context of the inventory and content of the creative assets pre-transaction; this would enable publishers to place more sophisticated restrictions on advertiser content that is deemed undesirable, and allow advertisers to lower the risk of brand damage and competitor collision.

For publishers these developments would achieve more sales opportunities and higher clearing prices on private marketplaces and open exchanges, raised awareness of advertisers who are bidding for inventory, and increased insight into the type of content that is winning impressions.

In addition, the industry should work to establish clearer advertising disclosure guidelines for this particular type of inventory. If a consumer is not completely aware that a thumbnail to an offsite article was paid to be placed there by a third-party, they will likely assume its selected by the editors. With the current state of the marketplace, this thought should be particularly concerning.

Until the industry embraces content recommendation advertising and engages with it in a more participatory manner, it will continue to fester in its current guise.