Integral Ad Science MD Nick Morley predicts the end of the beginning for digital advertising

 
Elliott Haworth
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Nick Morley, IAS (Source: Integral Ad Science)

It's been a patchy year for advertising. Issues that were known by the industry became public domain. Overnight, ads appearing next to questionable content, and subsequently funding questionable groups, was front page news.

“It’s been a really difficult year,” says Nick Morley, managing director for Europe, the Middle East, and Africa at Integral Ad Science. “Those are definitely topics we’d known about for some time. We’d probably, as an industry, not addressed them fast enough. I think that all parts in the ecosystem can probably share some blame for that.”

Integral Ad Science is a measurement company: its analytics platform measures media impressions in the name of providing quality in the digital ad space. Morley says there are three main pillars to determining media quality: viewability, fraud, and brand safety.

The latter has become all the more prevalent in the wake of this year’s events. Demand for the firm’s services has increased over 50 per cent, as advertisers grow concerned over where their ads are being placed.

“I don’t sit in those boardrooms,” says Morley. “But did the chief executives of all those famous brands talk at any point with the chief marketing officer over the last five years about brand safety risk? Possibly not. Probably not. This year, they’re all talking about it. This is a genuine top table discussion, and everyone is having to do something.”

The firm’s twice annual Media Quality Report for the first half of 2017 found that UK desktop brand safety risk continues to fall, decreasing from 6.8 per cent in the latter half of 2016 to 3.7 per cent today. Much of it, Morley suggests, is a result of remedial action in the wake of the Times investigation.

“People are putting in technologies like ours,” says Morley. “They’re thinking about whitelists and blacklists. Sometimes they’re having a very knee-jerk reaction and stopping all of their spend, pulling out adverts. We could look at that and say it’s probably a draconian first step. But it’s understandable if people don’t feel like they’ve got the right checks and balances in control.”

Like any nascent industry, digital advertising is bound to have teething problems. It’s quite easy to forget that just two decades ago, it barely existed.

It’s a bubble effect, by which billions has been poured into speculative technologies and new approaches, not all of which have stuck. Like any spending binge, the infrastructure left in its wake has laid the foundations for the future, with the weakest links removed with Darwinian haste.

“I think we’re at the end of the beginning of advertising technology,” says Morley.

“I’ve been in digital since the late nineties. If you look at this industry, it’s grown really big, really quickly, without the necessary checks and balances in place. And I’m not an economic historian, right, but I’m pretty sure you can go around and look at lots of different industries that have grown very quickly, that have gone through a boom, and then they’ve gone through a period of reflection and, potentially, deflation, as people step back, and find a sensible equilibrium.”

The period of reflection the digital ad space presently occupies is fertile ground for the firm’s measurement services. The unchecked growth

has engendered a feeling that advertisers don’t know exactly what they’re paying for. If you can’t measure every single impression, you can’t quantify its efficacy or quality.

“If you look at the financial markets, that was one of the challenges that needed to be unraveled over the last 10 years. There were multiple products that got bonded together of different value. Some of it was AAA, some of it was junk. Those things weren’t measured in the right way, and they were packaged in the wrong way. It was opaque, it wasn’t transparent, and that’s not dissimilar to some of the dynamics you see in the media space.”

Treating all impressions equally is part of the problem. Some impressions are more equal than others. An impression made by a click-fraud botnet is measured in the same way as a legitimate user. The fraudulent clicks shouldn’t be paid for, but they are.

Morley says that other impressions, despite being treated in the same way, are also often not as valuable – be it through viewability issues or whatever else. He believes that over time, brands, agencies, publishers and platforms are going to want to price those things differently to reflect their true value.

“Unless you can measure everything, you’ve got to ask whether it’s real. And right now everything is being priced the same. You can only get to that point if you’ve got independent third party measurement. And that’s the opportunity we’re trying to exploit.”

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