New York State Should Rebalance Ad Spending
And invest a fair share of advertising dollars in community media to reach all New Yorkers
According to our ad-spending analysis of six NYS agencies, the agencies spent almost eight times on social media and tech, and digital ad-serving companies combined, than the agencies spent with community media.
With this comes the increasing concern of fraud in digital advertising and its potential for compromising the overall health of community media ecosystems.
Juniper Research reported that US advertisers would lose more than $23 billion in 2022 due to digital advertising fraud.26 Ad fraud creates “fraudulent traffic, clicks, impressions, conversions, and other data events, preventing websites from delivering content to real users.” Nearly half (47.4%) of the internet traffic in 2022 were bots, and 30% of that was bad bot traffic,” applications created with malicious intent.27
Several leading brands slashed their digital ad budgets in 2017 due to concerns about transparency and effectiveness. None of the companies saw any change to business outcomes due to dramatically slashing digital ads.28 P&G’s Chief Brand Officer Mark Pritchard went as far as to say that the digital ad industry had a “complicated, non-transparent, inefficient and fraudulent media supply chain.”29
Consumers are also wary of hyper-targeted ads. Studies report that customers trust print, television, radio, and direct mail more than digital ads. A recent Harvard Business Review article lays out the research on why advertisers are rebalancing their digital versus traditional media spending. Customers trust non-digital media advertising the most. In fact, “traditional media outperform digital media in terms of engagement, return on investment, and reach.” Since digital platforms control the algorithms of their own “effectiveness measurement,” marketers are becoming more skeptical, just as consumers may be becoming more cynical about hyper-targeted ads.
Consumers trust their local news media. The Relevance Project reported that the Nielsen Trust in Advertising Report found that newspaper editorials and ads were two of the top five trusted advertising channels. Audiences give high marks for trust and fairness to their local news sources, with 71% of Americans saying local news media is accurate, 67% saying it is a source they use daily, and 62% saying local news sources cover stories fairly.
A recent study found that, “as hobbled economically as local newspapers already were, they still were operating as the most significant providers of robust local journalism in their communities.”
A recent Local News Initiative report highlighted the yeoman’s work of local news outlets who are covering major local issues national media overlooks: “While representing only 25% of the outlets in our sample, local newspapers were accounting for nearly 60% of the stories that we were able to identify as local, which is more than all the other outlet types, you know television, radio, online combined…as hobbled economically as local newspapers already were, they still were operating as the most significant providers of robust local journalism in their communities.”
An Ad Age article recently proclaimed a new age of accountability and reckoning in advertising. “Over the past 18 months, the advertising industry has rallied around the idea of ‘accountable advertising’—supporting underserved communities and funding high-quality content from diverse publishers, creators, and agencies, all without sacrificing profits.” State agencies must be accountable for equitable advertising spending with community media.
Accountability by state agencies for the fair allocation of ad dollars will help sustain New York community media as a trusted source for its audience. Fair allocation of ad dollars to community media means residents will know that our state funds are going towards reaching more New Yorkers.
25 Ad-serving/targeting companies represent 12.8% of the ad spending at $27.7 million, and social media and tech entities represent 6.8% or $14.7 million of the media placements we analyzed. Facebook (Meta) was at least 0.4% or $881K of media buys and Google was at 0.4% or $911K.
28 When Big Brands Stopped Spending On Digital Ads, Nothing Happened. Why?, Forbes, January 2, 2021; Marketing Today with Alan B. Hart Podcast, #194: Historic Ad Fraud at Uber with Kevin Frisch, February 12, 2020; Chase Had Ads on 400,000 Sites. Then on Just 5,000. Same Results. March 29, 2017.