[Note: This item comes from friend David Rosenthal. DLH]
Chase Had Ads on 400,000 Sites. Then on Just 5,000. Same Results.
By SAPNA MAHESHWARI
Mar 29 2017
As of a few weeks ago, advertisements for JPMorgan Chase were appearing on about 400,000 websites a month. It is the sort of eye-popping number that has become the norm these days for big companies that use automated tools to reach consumers online.
Now, as more and more brands find their ads popping up next to toxic content like fake news sites or offensive YouTube videos, JPMorgan has limited its display ads to about 5,000 websites it has preapproved, said Kristin Lemkau, the bank’s chief marketing officer. Surprisingly, the company is seeing little change in the cost of impressions or the visibility of its ads on the internet, she said. An impression is generally counted each time an ad is shown.
The change illustrates the new skepticism with which major marketers are approaching online ad platforms and the automated technology placing their brands on millions of websites. In recent years, advertisers have increasingly shunned buying ads on individual sites in favor of cheaply targeting groups of people across the web based on their browsing habits, a process known as programmatic advertising — enabling, say, a Gerber ad to show up on a local mother’s blog, or a purse in an online shopping cart to follow a person around the internet for weeks.
But as the risks around the far reaches of the web have been cast into stark relief, some advertisers are questioning the value of showing up on hundreds of thousands of unknown sites, and wondering whether millions of appearances actually translate into more sales.
“It’s only been a few days, but we haven’t seen any deterioration on our performance metrics,” Ms. Lemkau said in an interview on Tuesday. She added that the company had also pulled ads from YouTube in the past week after reports showed other major advertisers like Verizon unintentionally appearing on videos promoting hate speech and terrorism. JPMorgan aims to restrict its ads on the platform to a “human-checked” list of 1,000 YouTube channels, which it expects to be able to do by the week of April 10, she said.
Much of the promise of online advertising hinges on the vast reach of the web, and the ability to reach people on niche sites at low prices. Index Exchange, an ad exchange, has estimated that the titles owned by the top 50 traditional media companies account for 5 percent or fewer of the trillions of ad impressions available for sale each day. Google’s display network alone includes more than two million websites. YouTube has more than three million ad-supported channels, according to the analytics company OpenSlate, which says the average $100,000 campaign on the platform runs on more than 7,000 channels.
If more advertisers follow JPMorgan’s lead and see similar results, it could hurt the operators of smaller sites that make up the so-called long tail of the internet, as well as the advertising technology companies that profit from funneling trillions of ad impressions from brands to consumers through systems that mimic a stock exchange, according to Eric Franchi, co-founder of the ad technology firm Undertone.
“If you charge a percentage of all of the ads that run through your platform, then the prospects can be pretty dim if all of a sudden your volume has been cut by 95 percent,” Mr. Franchi said. “So many of these companies, and some of them are public, tout the number of ads they deliver per second, per day. If you start seeing more marketers move in this direction, it will be pretty interesting. What are the metrics then that those companies start to report?”