The Death of an Industry

It’s not everyday you wake up to find your livelihood threatened, but that’s exactly what happened this morning when I read Sara Fischer’s reporting on the FEC plans for political ad disclosures.

Sara’s scoop focuses around three main points:

1. Requiring all online political ads to carry disclosures
2. Creating a database of all political ads
3. Banning programmatic (automated) political ads from being sold

There’s a lot to digest with these points. First, let’s address some of the minor issues at hand before getting into the major problems of these proposed regulations.

Most digital advertisements (not just political ads) are required to carry disclaimers or identification of some kind that disclose who is promoting the advertisement. Most Ad Exchanges won’t approve an ad if they’re not branded in some way or if those ads lead to landing pages that do not carry appropriate disclaimers. The most effective Facebook advertisements (those in the news feed) are required to be advertised from a specific page, and most of those pages carry disclaimers.

For argument’s sake, let’s put aside the story of a Russian firm spending $100,000 on Facebook during last year’s election. I think we can all agree that this kind of foreign electioneering should be stopped. We should also be able to agree that $100,000 isn’t enough to influence a national election in any meaningful way. Instead, let’s focus on the legitimate campaign activity executed by campaigns and committees. Digital political ads go through the same kind of legal approval by our clients that any other advertisement or political communication goes through, whether it’s on TV, through mail, or on terrestrial radio, ensuring sure that they comply with FEC regulations.

Now, what I really want to focus on is the banning of programmatic advertising. The true “wild west” of digital advertising isn’t around the regulation of digital ads; it’s around how digital advertising is defined. Primarily, “programmatic” is one of the least understood and agreed upon terms in the industry.

Sara’s article parenthetically defines programmatic advertising as “automated” which is a fairly apt one word description to get the process across succinctly. However, it’s not the truest definition of the word. This is the definition I use when explaining programmatic buying: programmatic advertising is the use of technology to efficiently organize and execute the buying of media at scale.

Definitions are important. Programmatic advertising isn’t a platform, it’s a process. Programmatic advertising is a process by which the overwhelming majority of digital media is purchased in politics. This regulation, if implemented, wouldn’t just affect the more traditionally labeled Demand Side Platforms, (DSP) such as Google’s Doubleclick, TubeMogul or RocketFuel. This would ban all political digital ads on Facebook, Twitter, and the argument could be made for search advertising as well.

Why would social channels be affected by this? Definitions are important; programmatic advertising isn’t a platform, it’s a process. This process requires a buyer to upload ads and pieces of creative, then select from a menu of targeting criteria to put those ads in front of an appropriate audience. Isn’t that exactly what any buyer does when they’re working in Facebook Ads Manager or in AdWords?

Programmatic advertising isn’t the process of the future, it’s the process of today. This process isn’t just for buyers, it’s the process for sellers. If platforms such as Doubleclick Bid Manager, Facebook, Twitter, AdWords all disappeared for political advertisers tomorrow, any publication that runs a modern digital selling operation would also be affected. Think Washington Post, Politico, the Milwaukee Press Gazette.

It is true that I don’t have hard numbers on this, because many digital advertisers don’t work this way anymore. True direct buys, where a buyer says “I want to buy x amount of impressions on your site and just run them,” doesn’t happen anymore. Sellers have spent a lot of time and resources to curate segments of their audience to be able to sell to advertisers programmatically. Programmatic advertising isn’t a platform, it’s a process, and it’s the process of today.

A lot of focus has been placed on how digital ads are used in an attempt to persuade voters, but that’s only part of what digital political advertising is used for. How many people have been reminded to register to vote through political advertisements? How many people have been reminded you only have x hours left to vote before polls close? If digital political ads are neutered to the point where they disappear, or are no longer effective, not only do persuasion ads disappear, but the rest of these modern methods of civic engagement disappear as well.

Definitions are important. How we define the process of programmatic advertising is important. Keep this in mind as the debate on regulations moves forward, because the implications can be much greater than they appear at face value.