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According to MIT, more than 140 big brands are paying for ad space on unreliable AI-written sites.
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According to MIT, more than 140 big brands are paying for ad space on unreliable AI-written sites —and they probably don't even know it. What does that mean for the future of advertising?
The state of online advertising today?
TROUBLE IN PARADISE
For all its novelty, it can be easy to forget just how vital advertising is to the global economy. Really. Consultants note “a strong correlation between US advertising spend and real US GDP growth.” Worldwide, the sector is expected to be worth over US$1T in a couple of years.
So, what happens when one of the sector’s strongest pillars, online advertising, starts rotting?
DRAMATIC INTRO. REAL ISSUE
Folks at MIT discovered that nearly 150 well known, large brands are spending money placing ads on sites filled with questionable content —much of it created by generative AI.
Stay with me as I break down why this is such a big deal.
Revenue is, of course, the lifeblood of any business. Businesses have options when it comes to increasing it, but the simplest, most straightforward one is to get more customers —and advertising, as everyone knows, is a time-tested way firms can reach new people, to do just that.
So, if this tool starts to lose its efficacy, well, every company has a problem.
But, as bad as that sounds, the issue goes deeper, still.
IT’S ABOUT TRUST
Around the world, including in the world’s richest economies, more people say that they trust businesses and brands than they do their own governments. By a huge margin.
In a survey of tens of thousands of people across 28 countries, businesses (brands) held “a staggering 54-point lead over governments when it comes to perceived competence —and 30 points ahead on ethics.”
Seen this way, this questionable content thing is actually a huge deal: if brands are trusted, then it makes logical sense that a brand's advertising output acts as a de facto as a seal of approval of the content it appears beside.
Brands advertising against demonstrably false, or risible, content is actually a bit of a crisis.
THE ALGO GIVES —AND THE ALGO TAKETH AWAY
But, wait. Why and how exactly are brands spending hard earned money placing ads against questionable content?
The answer is “programmatic.”
“Programmatic advertising” is fancy marketing speak for when brands and agencies use algorithms to buy advertising space automatically and instantaneously. (This is as opposed to brands or agencies manually deciding to buy ad space on a particular site, or network of sites —in an old school “hey-everyone, let’s-sponsor-the-Yahoo!-News-homepage” way.)
Programmatic media buying lets brands/agencies purchase “impressions” (that’s just fancy online marketing speak for “views”) on sites, on apps, or really anywhere online instantaneously, in an attempt to get their ads in front of more eyeballs.
So far, so good, right?
Well, programmatic’s automated nature can also mean that ads end up appearing in places brands don't want them.
This newsletter shared the shocking problem with programmatic ad buying last year.
Tldr: most programmatic ad buys end up sticking ads on sites that only bots view and click on. That’s horrible, and Uber famously got burned for this, wasting an astonishing US$100m on online ads that weren’t actually seen by people, which led to a flurry of lawsuits.
Meaning: This nonsense is not new. For years, programmatic ad buys have resulted in ad creatives appearing on sites that are actually meaningless fronts. The “clicks” they received? Meaningless signals of non intent, from non-human bots.
And it’s not just huge global firms like Uber who have been scammed.
Fate v Future reader Laura Lalonde, the founder of an innovative user generated content marketplace called Gridbank, shared a sobering “gut punch” of a story that anyone running paid ads will want to pay attention to:
She notes how “spam traffic has always been around.” But if you’re buying paid ads, “you're likely paying cash” for that traffic.
As she put it:
The new news here is the scale at which people can pump out poor quality output/poor quality sites.
And it’s actually kind of scary. Here’s MIT again:
Fate v Future’s expertise goes beyond what you’re reading.
In addition to working hard to create the best newsletter on the Internet, we are a network of senior marketing experts, handling the trickiest tasks for brands both large and small.
As more and more spam traffic gets served to AI-written goop, we are seeing interest from clients in our new, non-technical SEO service: blog posts that are based on conversational or query-based long tail search terms/keywords— written with an especially human voice.
Pro tip: As a reader of this newsletter, you’ll get an insider rate on this service. Simply reply to this newsletter with “seo” to hear more.
Restoring trust in media and communications makes sense for a ton of reasons.
Remember the survey I mentioned above, the one that found that businesses are more trusted than governments?
It also found that the media is now the least trusted of the major four institutions (the other 3 are businesses, governments and NGOs). Trust in both traditional media and social media was down.
If, like me, you believe in the power of a strong brand —then you should also believe in the power of strong brand communications.
And that starts —as all good advertising does— with being truthful, and telling human stories people like and trust.
Bottom line: as all of the above plays out, look for the spread of AI to increase the value of HGC (human generated content), not decrease it.
Junk websites filled with AI-generated text are pulling in money from programmatic ads »»
“I have a gut-punching story for anyone running paid ads.” »»
“Brands are still more trusted than governments” »»
Ad industry growing at record pace, expected to hit US$1T by 2025 (from 2021) »»
Written by Jon Kallus. Any feedback? Simply reply. Like this? Share it!