Trust in advertising has plummeted to an all-time low — in the UK just 25 per cent think favourably of it against 40 per cent who thought so a few years ago. In spite of adtech’s enhanced capabilities offering higher transparency and effectiveness in KPI measurement, the advent of digital has actually deteriorated people’s trust.
Who is to blame for the widening trust deficit in an industry that is supposed to build consumers’ trust in brands? Could this oxymoron be the fault of the monopolies that control the gigantic volume of digital ad spend? Or is it perhaps due to the advertisers’ desire to cut costs, who without much thinking decided to reduce or even completely eradicate advertising budgets previously allocated for brand visibility in print and broadcast media and instead take to Facebook, YouTube and Google?
And what about the role of the advertising agencies themselves? Were they perhaps too quick, too eager and too willing to convince their clients that this is where the future lies?
Well, before we take out our crystal ball to see what the future of advertising might looks like, let’s just take a closer look at what the situation is today.
Regulatory push back
In January last year, Google was fined $57 million under European Union’s Data Privacy Law for not properly disclosing to users how data is collected across its services to present personalised ads. In March this year, the Swedish Data Protection Authority imposed a fine of 7 million euros on Google for failure to comply with the GDPR. Also, YouTube was fined $170 million to settle allegations that it collected children’s personal data without their parents’ consent.
Google wasn’t the only one
Last year, Facebook was fined $5 billion after violating a 2012 consent order related to user privacy. In 2018, the UK’s Information Commissioner’s Office announced it intended to fine Facebook $663,000 over the Cambridge Analytica data scandal, this being the maximum fine allowed at the time of the breach, saying Facebook “contravened the law by failing to safeguard people’s information”.
Ever since the early days of the advent of digital advertising, trust in it was already corroding. It is now more than four years since Facebook said it had inflated the average time people spent watching video ads in the social media giant’s attempt to attract more ad spend from brands wishing to increase sales and acquire market share by selling dreams and promises, or by conmen committing daylight robberies through fake ad campaigns.
Even that new-kid-on-the-block, TikTok, was fined $5.7 million in February last year for illegally collecting children’s data. Meanwhile, the US Army and Navy late last year banned the use of TikTok on government-issued phones on the grounds that the service is considered a cyber threat.
So, this is where we are today: Constant breaches of data privacy have become common play, fake ads flood the ecosystem unchecked, false claims about capabilities and performance are rife and cyber threat suspicions are rife.
Raking it in
Yet, and in spite of all the criticism by industry bodies and heavy fines imposed on by regulators, Big Tech happily picks up the tab and continues with business as usual, unchallenged and undeterred.
And why is that? Because in 2019, Facebook made $69.7 billion in advertising revenue, about 98.5 per cent of its total global revenue, and the same year, Google’s ad revenue amounted to $134.81 billion. Add the two and the total amount equals the GDP of New Zealand ... and higher than 135 other countries.
Thankfully, industry watchdogs are now taking a closer look at the wrongdoings. The UK’s data protection regulator said in January that it would start investigating individual companies in the UK’s £13 billion online advertising industry, after it found widespread problems with personal data being shared illegally.
Ireland’s data protection authority is investigating whether Google is illegally accessing information about people who use its services. And according to recent reports, the US Justice Department is drafting a lawsuit against Google owner Alphabet, accusing it of violating antitrust laws. Google’s digital ads are at the centre of the investigation, as well as search and mobile software.
A new reality
Media spotlight and public scrutiny on Big Tech is likely to also intensify, further eroding any fragments of reputational capital still surrounding the colourful logos of the internet economy’s powerhouses. In a post-pandemic world, where millions have lost their jobs or seen their salaries drastically cut, and where personal data is being used to track population movement, malpractices by corporates will be examined under the magnifying glass of an increasingly disillusioned public opinion.
Reduced trust in Big Tech will further increase mistrust in online advertising. In turn, this may eventually usher us into an era of growing advertising revenues for traditional print and broadcast media segments, which have been haemorrhaging ad revenues for years, leading many to extinctions, others to mere existence.
Data is the new oil fuelling the unprecedented growth of Big Tech for quite some time now. But the longer you leave that oil unrefined and stored in shaky structures, the longer you allow it to concentrate in the hands of a couple magnates, the more likely it is to leak and cause untold damage.
And we all know the havoc an unchecked oil leak can wreak on humanity.
- George Kotsolios is Managing Partner at Leidar MENA and author of “Back to the Future of Marketing: Provolve or Perish”. Follow him on Twitter @georgekotsolios.