Those who’ve known me over the years know, among other things, that I’m patently incapable of writing about or discussing digital marketing or advertising (or anything else) in any way except to challenge and refute conventional wisdom.

Especially when what passes as conventional wisdom nowadays is often too expedient and too foolish to qualify as either conventional or wise.

As a serial outlier — now on the cusp of my 60^th birthday and just a year or two shy of completing my third and perhaps final decade in digital marketing — I find myself with little or no patience for the self-proclaimed experts and change agents that routinely pollute the media ecosystem with endless streams of heavily capitalized but mostly worthless technologies, empty platitudes and false promises.

Truth be told, I didn’t start with much patience when I began my digital marketing career 28 years ago.

People still ask how it was that my old partner JG Sandom and I co-founded what many believe was the nation’s first digital marketing agency, Einstein and Sandom Interactive, way back in 1984. “Simple,” I tell them. “We noticed computer screens everywhere we went, but no advertising on any of them anywhere. So we decided to do something about it.”

In retrospect, my response may not be the sort of legendary business epiphany cited in white papers by the empty suits noted above, but sometimes history is just too pedestrian to bust through the clutter — particularly in an age when a search for Kim Kardashian’s ass on Google returns more than 1.3 million listings (or so I’m told).

Besides, popular culture can only survive to the extent that it obliterates and rewrites history on the fly. I can only hope that someone thoughtful takes a few seconds between tweets to rewrite mine someday.

Looking back, my evolution into the Andy Rooney of the digital era now seems preordained, in no small measure because I never much cared what my industry colleagues and peers thought about my opinions, and always assumed — per Upton Sinclair’s sage observation a century ago — that most of us (at least those with jobs) are paid less to innovate and more not to understand new things.

That said, please feel free to comment anyway, especially if and when you disagree vehemently with what I say or how I say it. (Those of you who agree can just send cash.)

My professional mistake, of course, was to assume that there would always be a place in the industry for an original thinker who takes to heart Albert Einstein’s observation that no problem can be solved by the same thinking that created the problem. (50% of the Albert Keeler Principle).

Apparently, however, that’s no longer a safe assumption (at least not if my current client list — or lack thereof — is any indication), and this column is a concession of sorts to my own reality: It’s simply way too late now to change my liver spots, and there appears to be less financial incentive to do so.

Therefore, let me apologize in advance for offending anyone and — eventually — everyone. In my own meager defense, let me admit right to a serious and persistent drug problem: I just can’t afford any.

And speaking of persistent drug problems, some of you may remember me as the crackpot who first introduced and explored the hypothesis of media as addiction some years ago, right here on MediaPost. Of course what started as mere hypothesis back then is already indisputable fact today.

Media consumption — in all its various electronic forms — now defines and controls almost all of our daily behaviors and dialogs in virtually every meaningful way, and consumes a full 75% of our waking time, each day every day.

Every form of addiction is bad, no matter whether the narcotic be alcohol or morphine or idealism. – Carl Jung

Or media.  It’s time to move beyond the suspended adolescence of our obsessions and addictions and start behaving like adults. It’s time to realize that both citizenship in a free society and sobriety in a mega-addictive state begin with skepticism of the status quo.

If you’re looking for faster, smarter and better ways to leverage the processing power of your smartphone (mine is a blithering idiot), you might want to look elsewhere because you probably won’t find them here.

What you will find, however, is a remarkably consistent and always contrarian critique of the digitally driven assumptions, myths and lifestyles that most of us have adopted in recent years as the latest orthodoxy du jour and now take for granted.

What you will find is someone old enough to remember Sal Mineo, and someone old enough to remember when a positive consumer experience for a major media franchise was defined more soberly as quiet time in the morning with a cup of coffee and a newspaper. Now, the coffee costs five bucks, the newspaper is purely anachronistic and there’s no more quiet time in the morning.

What you will find is the deliberate resurrection of one of the first real victims of the digital age: quiet common sense.

In part 1 of this series – Brand Safety – I described how the online display advertising industry has become a textbook example of polypharmacy, what happens when drugs prescribed to treat one symptom create new symptoms that require additional drugs that create more new symptoms that all require more drugs. Eventually the patient is killed by the cure and all post-mortem accountability is obliterated. Such is the case with online display advertising these days as we pile layer upon layer of highly sophisticated intermediary technologies like cord wood one on top of another and somehow expect the net effect to improve performance. Not surprisingly, performance has only declined while the costs of maintaining the industry’s drug habits increase with each new prescription.

Let me begin our discussion of optimization with a few quick questions: Why would anyone invest millions or billions of dollars in intermediary optimization technologies?

Answer: to improve performance.

Next question: Why?

Answer: Because the model is failing and otherwise requires optimization to perform.

Final question: Why do we continue to invest in prophylactic ad technologies when performance continues to decline and costs continue to escalate no matter what we do?

Answer: Because we’re insane.

After a full decade of optimization efforts prefaced and accompanied by billions of investment dollars the evidence is utterly uncontestable: Optimization technologies don’t improve performance, increase costs across the board, and eventually eliminate any semblance of accountability. In the face of such persistent madness, collective insanity — defined as the condition that compels us to do the same thing over and over and somehow expect different results — is the only sane conclusion.

Optimization technologies, like all intermediary technologies in the ad-tech universe, are failed concessions to the larger failures of a failed model – per Marshall McLuhan’s observation that all media systems pushed to extreme begin to operate in reverse. Contrary to the tired observation of industry analysts who suggest that the failures of the online display industry are the result of too much ad inventory and too much audience fragmentation (a byproduct of functionally limitless bandwidth), the truth that emerges on the far side of complexity is far simpler and wholly consistent with Occam’s Razor: The failures and collapse of online display advertising are inevitable byproducts of the wrong model at work, and any and all attempts to optimize performance and pricing of the wrong model can and will only engender the exact opposite effects. Period.

Next week in the third and final part of this series we’ll talk about data and reach. Stay tuned.

Part 1 of 3: Brand Safety

Much has been written lately about the extraordinary high-tech measures taken by major online publishers, ad networks, exchanges and agencies to protect advertisers against the very real possibility of adverse brand exposure. Of course, network transparency is little more than a prophylactic concession to the sheer toxicity of the digital channels and their patent inability to engender meaningful reach for big brands without submitting them to intolerable levels of risk.

Structurally, network transparency is really a euphemism to describe an entirely new subset of high-tech intermediaries who contribute nothing whatsoever to the efficacy of online branding and who exist exclusively to warrant the brand safety of volume buys. Purely defensive. Purely CYA. Essentially, network transparency exists only to facilitate the sale of work product (online advertising) that can no longer be sold in any kind of scale without extraordinary guarantees, a work product that no one outside the industry even wants (statistically, at least).

Online advertising nowadays is a textbook example of polypharmacy at work — what happens when drugs prescribed to treat one symptom create new symptoms that require additional drugs that create more new symptoms that all require more drugs. Eventually, the unmanageable presence of so many drugs in the bloodstream at one time all but guarantees vastly elevated levels of systemic toxicity and risk, compels increasingly costly and radical treatment, and destroys any meaningful measure of accountability. Eventually, the cure — layer upon layer of invasive technologies and drugs — kills the patient. All in the name of defensive medicine.

Likewise, each additional layer of high-tech online intermediaries gets stacked atop and interacts with previous layers of high-tech intermediaries, each designed to compensate in some way, shape or form for a specific weakness presented by a model that delivers a work product no one asks for, no one wants and everyone is equipped to avoid. The vicious cycle continues as complexity begets more complexity. Eventually, increased complexity begets systemic instability wherein the system literally turns against itself, the way an auto-immune disease attacks the body (most typically in some unanticipated and unintended fashion per Marshall McLuhan’s simple but prescient observation that media systems pushed to extreme will begin to operate in reverse). The same observation applied to the aversion of brand risk online strongly suggests that the risks we seek to avoid in the first place will eventually be dwarfed by the unintended consequences — including the collapse of an ecosystem that can no longer support the presence of so many high-tech intermediaries — wrought by the extraordinary measures we take to avoid them, not the least of which is the stealth collection, manipulation and transfer of extremely sensitive behavioral data.

In the above regard, the promise of unintended consequences is one that attends the wholesale introduction of any intermediary technology into a media ecosystem already far too overpopulated and overtaxed by far too many intermediary technologies. True to Mr. McLuhan’s sage observation, each layer of intermediary ad technology added to the mix over the years — without exception — has driven performance down instead of up and driven costs up instead of down, contrary to all expectations and all industry representations. For instance, our misguided obsessions with online targeting have all but destroyed our ability to sell scalable reach — the only non-discretionary line item in any big branding spend, and the reason why digital media budgets remain so miserly compared to their TV counterparts, despite the rapid erosion of TV reach in recent years and despite the equally rapid growth of digital inventory. More on that next time in Killed by the Online Cure, Part 2 of 3: Optimization.

Let’s talk about the real cost of branding and the myth of the CPM.

Our journey to the truth about this outdated model begins with a January 2011 Webtrends analysis of CTRs and CPCs for display advertising across twenty vertical categories on Facebook. This analysis reveals an average CTR of 0.065% (approx 1-in-1538) with an average CPC of $.56. The average CPM “impressions” across all 20 categories = $.36 (BTW, ad costs on Facebook have risen since last January, but these figures will suffice for our purposes here).

On the other hand, if we take the fork in the road to television, we encounter a wildly different landscape involving the same advertisers and the same audience, with CPM impressions for adults 18-49 via a single thirty-second TV spot in Grey’s Anatomy to be $42.39 (based on 5.24 million viewers 18-49 and an average cost per :30 of $222,113).

Thirty-six cents versus forty-two bucks for the same thousand impressions! Ahh, the plot thickens…

What’s wrong with this picture? Plenty, obviously. But the fact is, neither example even begins to address the real cost brand advertisers incur to reach an actual person, because both examples refer to scaling the media supply vs. reaching the audience. The case can be made that Facebook, at thirty-six cents per thousand impressions, represents an absolutely worthless branding option. Not my opinion, but rather the opinion of the folks doing the selling and buying at that price. I mean, let’s get real here. If these impressions were actually worth anything, wouldn’t/shouldn’t they cost more than $.00036 each? The only quantifiable component in this analysis is the 1-in-1538 clickthrough at $.56, which translates to a CPM for actual, measureable impressions of $560.00. Sort of puts that thirty-six cents figure into perspective, doesn’t it?

And the real cost to reach adults on Grey’s Anatomy is far more than $42.39. That figure is calculated on the basis of how many set top boxes receive a single thirty-second spot, not how many people view it, and doesn’t account for growing DVR usage (now approaching 50%) or the feeding frenzy that occurs in the commercial breaks during real-time viewing. The point is, impressions that reach only set-top boxes are, for all intents and purposes, as worthless as the impressions on Facebook that reach virtually no one.

But it gets even worse, and more complicated. Using the Grey’s Anatomy example, what is the cost to a brand advertiser that buys a :30 in the show every week for 13 weeks? The case can be made, and the cume ratings would confirm, that the audience for Grey’s Anatomy doesn’t vary significantly week-to-week. That means the actual cost to reach the set top boxes for the same 18-49 adult demo in Grey’s Anatomy over 13 weeks is more than five hundred dollars per thousand (13 x $42.39 = $551.07), almost as much as Facebook!

Let’s view this in the macro for a moment and use as our reference point a certain automotive manufacturer that spent $3 Billion last year on measured media in the US. If we figure the US car-buying target audience to include 150 million adults, then the aggregate CPM this manufacturer incurs to reach that demo over the course of a year = $20,000!

There are two very widespread misconceptions at play here. The first is the total bastardization of the concept of reach. Reach is an audience measurement, not a supply-side metric, yet everybody misconstrues and manipulates its true meaning to impart false value to impressions in the media supply.

The second widespread misconception is that reach can be evaluated in a vacuum. The truth is that all established brands are in the frequency business (BTW, frequency is a pure reach metric). How else can you reconcile a car company spending $3 Billion dollars a year on measured media? In reality, every one of its brand messages falls on the frequency curve, at an average cost of $20 per person (a CPM of $20,000), per year, in this key car-buying demo. This figure includes the illusory impressions on Facebook as well as the set-top boxes and DVRs on television. In fact, taken to its illogical extreme as a brand investment strategy, this same automotive company spends $40,000 per thousand adults over two years, $60,000 per thousand adults over three years, etc.

At the end of the day, the only media metric that is truly accountable is the CPC. This represents the cost to effect an actual person arriving at a specific branded destination. And yet the digerati are distancing themselves from the clickthrough in droves and adopting instead the same soft metrics that they previously accused their broadcast brethren of hiding behind. Why? Because the illusion of what you’re getting at thirty-six cents per thousand on Facebook sounds so much better than the reality of what you’re getting at $560.00 per thousand from Facebook. But, who’s counting? Besides, how do you measure an illusion?

So, what have we learned here? Three things: 1) that brand advertising should be viewed as an investment, 2) that CPMs are a myth, and 3) that the best measure of true audience interaction is the clickthrough.

Want to know the real cost of actually reaching someone? Look for a media model that has the guts to charge per click.

Neil Mohan, Google’s VP of Display Advertising, gave the keynote address earlier this month at the IAB’s Innovation Days @ Internet Week event. “There’s a perfect ad for everyone,” he declared. Whew, that’s a relief, ’cause I’ve been trying to hunt down the perfect ad for years.

In his address, Mr. Mohan cited six reasons why online display advertising will change for the better (with Google’s help, of course)…

1. The number of display ad impressions will decrease by 25 percent per person. Mr. Mohan predicts that the delivery of more relevant ads will somehow reduce the amount of clutter. Despite the patent absurdity of his claim, relevancy, like reach, is simply not determined by the ones who manipulate the ad supply. Relevancy is determined exclusively by the 99.92% of us who ignore the ads. The only ones among us who actually believe in relevant ads are the .08% of us getting paid to sell relevant ads (or relevant ad technology). In truth, only advertising wannabees sell relevancy. No one who actually knows anything about brand reach – the only non-discretionary line item in any big media spend – gives a rat’s ass about relevancy.
2. Engagement rates across all display ads will increase 50 percent. Whoa! Slow down there, big fella! A whopping 50% increase in display CTRs will put us somewhere in the .15% response neighborhood! Pretty heady stuff. Of course the only one who can afford to stay in business at that rate of return is someone who gets paid to burn billions of daily ad impressions, someone whose opacity and brute size render any discussion of performance utterly rhetorical to begin with. Someone like Google. Question: Why does P&G deliver 2,000,000,000 daily ad impressions. Answer: Because the first 1,999,999,999 don’t get the job done.
3. People will have a direct say in 25 percent of the ads they see. Why would we want a direct say in only 25% of the ads we see when we already have a direct say in the 99.92% of the ads we ignore entirely? Besides, how many of us do we think will actually take the time to sit down and fill out a detailed questionnaire about ads we don’t want to see in the first place? And how am I supposed to know which one of the four ads I see is the one I requested unless I watch all four? This is much worse than I thought.
4. 35 percent of campaigns will primarily use metrics beyond clicks and conversions. Well, I should hope so, because it’s getting harder and harder to sell a .08% performance rate. Even the digital rubes won’t swallow that rancid bait anymore. It’s clearly time to shoot the old messenger and find a new one to shoot later. But relax: according to Mr. Mohan, new technologies will give us the opportunity to measure the enhanced engagement levels of all the ads we now avoid. (Applause.)
5. 25 billion ads per day will tell people why they’re seeing them. According to Mr. Mohan, consumer notices (like Ads by Google and AdChoices) will become ubiquitous by 2015. Finally, we’ll be able to state with absolute certainty which of the ads we already pay to ignore and avoid are officially sanctioned for us to ignore and avoid. Don’t know about you, but I feel better already.
6. Over 40 percent of online Americans will name display ads as their favorite ad format. According to Mr. Mohan, a recent YouGov survey of more than 1,000 Americans revealed that online display advertising placed only slightly behind sky-writing (can’t make this up) as a favored ad medium. Of course, asking us to rank our favorite advertising media is a little like asking us to rank our favorite allergens; it begins the entire conversation with the wrong question and leads to completely nonsensical results, per the above. Once we initiate a dialog predicated on the wrong initial question, the less we know with each subsequent response – all of which suits Google just fine, since it so perfectly explains their entire revenue model.

Now that I know that there’s a perfect ad just waiting for me out there, I can feel much better about the 36,500,000 less-than-perfect ads I’ll ignore and avoid over the next 20 years – all thanks to Mr. Mohan, Google and – of course – the IAB.

Read all the Einstein Brothers’ MediaBizBloggers commentaries at the Brothers Einstein.

Of course, the familial nature of the relationship between advertisers and content producers all but ended the very moment the networks discovered the enhanced profit potential of selling multiple ad positions in the same commercial break.  Advertisers suddenly became media renters instead of content owners, and the commercial rotation suddenly resembled a crowded battle ground as brands were just as suddenly compelled to compete for the same eyeballs they once enjoyed all to themselves.  The age of the advertising-as-intermediary model had arrived.

In order to penetrate the ensuing commercial clutter, brand advertisers enlisted the services of Madison Avenue agencies with madman reputations for creative genius.  The same agencies were typically integrated, one-stop shops with the requisite research, media planning, media buying and traffic components to support their creative calling cards.  No one, however, could fully explain why some advertising campaigns worked better than others, and the working assumption was that the real magic of advertising was somehow ensconced in the intangible things that touched our hearts, the same inexplicable things that most resisted measurement.  The fifty percent of advertising that actually worked was the same fifty percent that no one could explain and the same fifty percent that defied measurement.  Ad icon Bill Bernbach summed it up.  ”Advertising,” he said, “is fundamentally persuasion, and persuasion happens to be not a science, but an art.”

Marketing metrics rarely describe what works.  Rather, they almost always describe what can be sold.
– Jeff Einstein

We shape our tools and thereafter our tools shape us.

and…

The medium is the message.

The introduction of cable TV in the late 1970s and early 1980s effectively shattered the mass-market media landscape for advertisers, content producers and agencies alike.  In lieu of the ability to reach mass audiences like their broadcast counterparts, the fledgling cable networks sold the ability to target their audiences instead.  Suddenly, agency media planners and buyers were besieged by armies of cable network sales reps, all of whom extolled the virtues of effective targeting over effective brand reach.  The working vernacular of advertising began to change accordingly as the agency focus, infrastructure and billing apparatus shifted away from creative and moved towards media, a tool-driven migration accelerated by one of the most transformative technologies of the 20th century: the personal computer.

The sheer number-crunching power, appeal and corporate ubiquity of the PC all but guaranteed the corresponding migration of agency resources from the message to the medium.  Numbers, after all, were the essential language of media, while the personal computer did little — at least initially — to enhance the production of creative and the art of storytelling.

The cable-driven shift from creative to media and the dramatic increase in computing power together combined to drive a sudden demand at both advertisers and agencies for a marketing workforce better prepared and equipped to handle both.  Enter the production-line template for the post-modern MBA, a thoroughly digital technocrat formally trained in both marketing and financial disciplines.  It’s no mistake, therefore, that the equally rapid ascents of the Wall Street and digital media cultures coincided, as both were stepchildren of the same electronic spreadsheet, perhaps the most powerful, persuasive and abused technology of all time.

Jeff Einstein
the Brothers Einstein

Our nation is in crisis. Our families and friends and businesses are in crisis. Truly, these are tough times. JeffEinstein.com is here to help you better understand and weather them. We’re here to help improve the quality of your life despite them.

Equal parts inspiration, lifestyle improvement and social commentary, JeffEinstein.com is here to help you identify and bust the patterns that confine, constrain and erode the quality of your life in what I call the Great Age of Mediation — a time when all of our most critical relationships and dialogs are infused with media intermediaries, all with competing agendas.

Forged in a persistent skepticism of all things status quo and tempered by an uncommon streak of common sense, JeffEinstein.com was designed to provoke, stimulate, and inspire change. Contrary to the core, however, it will not show you the way out. Rather, it will show you the way in…

Try on a couple of the inaugural posts – The Quality of Life: Relationships and All’s Well that Huxwell – for size, and don’t forget to sign up for daily updates.  Enjoy!

Jeff Einstein

Audiences with agencies, buying services and advertisers alike suddenly become much more difficult and expensive to secure while the increasing power to consolidate and broker local avails in third-party digital exchanges drives the value of local media inventory straight downward.  In short, well-intended but misguided and haphazard efforts to go digital have wreaked havoc across the entire media landscape and validated Oscar Wilde’s definition of the cynic as someone who knows the price of everything and the value of nothing.

Clearly, it’s one thing to go digital first, quite another to do it the right way – in a fashion that doesn’t wreck the joint in the process.  Not that we should be surprised at the sorry state of the commercial media landscape.  According to Marshall McLuhan’s Four Laws of Media, any media system pushed to extreme will begin to operate in reverse – exactly what we see today as our increased reliance and dependence upon our digital communications tools have all but shut down and choked off communications — an especially difficult pill to swallow for local media franchises that rely and bank on long-standing community roots and relationships.  The same phenomenon  is at work across all media channels simultaneously, and occurs whenever and wherever entitlement cultures collide with the convenience and ubiquity of tool-driven scale.

Give a man a fish and you feed him for a day.  Teach a man to fish and you feed him for a lifetime. — Chinese proverb

And that’s why the Brothers Einstein have devised a bottom-up, grassroots strategy to Think Local, Act Local, designed to teach local media franchises how to repackage, promote and re-sell their own local market equity in the digital channels.  We propose a campaign that repositions local media franchises as turnkey, one-stop local advertising solutions who fill the vacuum left behind by the demise of local agencies, and offer precisely what local and national brands need most in local media markets: direct access to the longstanding community relationships that drive them.  We propose to teach them not only how to go digital the right way, but how to fish for themselves.

If the survival of local media franchises is dear to your heart (or wallet), please check out Think Local, Act Local today, then contact the Brothers Einstein.