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A day of reckoning for digital display advertising?

recently announced that its efforts to build a demand-side platform (DSP) leveraging its Atlas and LiveRail technologies had not gone exactly as planned, and that it would no longer focus on trying to programmatically sell digital display ad inventory.

 

What Facebook discovered in its testing was that the quality of DSP ad inventory isn’t up to Facebook standards. Here’s what Dave Jakubowski, head of Ad Technology at Facebook, said in a blog post:

 

A lot has already been written about the state of digital display and its problems with quality and outright fraud, so we won’t go any deeper here. That said, digital display is still a massive and growing business, but native social is its biggest threat, and for good reason.

 

Industry data show the increasing value of native social advertising. Forrester’s US Digital Forecast 2014 to 2019 shows that social advertising is growing much faster — at nearly twice the rate of digital display, and 2.5 times the rate of search — 24 percent CAGR (compound annual growth rate) (social) vs. 13 percent CAGR (display) vs. 10 percent CAGR (search).

 

We came up against many bad ads and fraud (like bots). While we were fortunately able to root out the bad actors and only buy quality ads, we were amazed by the volume of valueless inventory… We knew that in good conscience, we couldn’t sell what Atlas and our people-based measurement told us was valueless. Unfortunately, those ads were almost certainly dumped into another low-quality exchange where all of them were most likely purchased.

 

 

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