I completely agree that traffic & viewership data are inflated. Nielsen & Alexa are like Moody's & Fitch: they were all designed as independent ratings agencies, but they all succumb to some form of Stockholm Syndrome or Regulatory Capture, since their revenue is directly or indirectly linked to the industries they're supposed to be checking.
That said, yours isn't a critique that's unique to digital ads as much as it is of advertising in general -- a low yielding, hard-to-measure discipline. Analog ads on billboards and newspapers have a much lower ROI than digital (because of targeting & data), but all genres of display ads (digital & analog) are means of reaching consumers en masse, which is incredibly valuable to brands in perfect competition, where differentiation is low, substitution high, and therefore top-of-mind & tip-of-tongue are preeminent.
That's not to say that an advertising cartel or conspiracy to inflate data/CPMs is acceptable. However, that does mean that CPMs are far less elastic than you'd think: CPMs are less correlated to shifts in the underlying data than top-down fundamentals (e.g. macroeconomics or industry supply/demand).
Techdirt has not posted any stories submitted by Anthony Bardaro.
The counterfactual
That said, yours isn't a critique that's unique to digital ads as much as it is of advertising in general -- a low yielding, hard-to-measure discipline. Analog ads on billboards and newspapers have a much lower ROI than digital (because of targeting & data), but all genres of display ads (digital & analog) are means of reaching consumers en masse, which is incredibly valuable to brands in perfect competition, where differentiation is low, substitution high, and therefore top-of-mind & tip-of-tongue are preeminent.
That's not to say that an advertising cartel or conspiracy to inflate data/CPMs is acceptable. However, that does mean that CPMs are far less elastic than you'd think: CPMs are less correlated to shifts in the underlying data than top-down fundamentals (e.g. macroeconomics or industry supply/demand).
Techdirt has not posted any stories submitted by Anthony Bardaro.
Submit a story now.