Are ad consolidators ruining the display ad market?

I have been thinking about online display advertising lately. There are many mechanisms now for a site to advertise itself, but are the results generating what you need to justify the cost, or justify the user intrusion?

Plenty of ezine-based articles with something to sell you will tell you how easy it is to use online display ads and how effective they can be. But notice they used a content vehicle to communicate to you...not a display ad. But Forbes guest writer, former digital marketing VC, Gilad de Vries calls display ads a branding black hole". You can't tell the brand's story in that space and people ignore them. Oops.



The advertisers are depending too much on the consolidators Ad Choices, Admeld and Google ads to do their due diligence in evaluating the effectiveness here. They say "we watch the users' behavior and target your ad to the right user so nothing is wasted."

But so much *IS* wasted. Here is an example: I keep seeing HP ads everywhere I go. I work for them, they are on my resume (posted online), in my email address (deep and wide in my online history of filling out forms), in my Google+ and Facebook posts. It would seem, based on the volume of my activity using the HP name, that I am very interested in them. By a very narrow definition, if I talk about HP, I must be a good prospect.

But it is easy to sort out that I am a spectactularly BAD prospect, for all the reasons just mentioned. As much as I like them, I am not going to buy an HP product. I'm not in the market and I simply don't have to. Same for other employees, other industry analysts, other bloggers, and people who already have an HP product. You can see how posting about a company, using their name, does not qualify you as a good prospect; it frequently means you are an insider and well outside the sales target.

So the key algorithm the consolidators are selling becomes the exact reason their service is not working. There's a double-whammy for these consolidators their clients must consider: I might buy something else, but they've clogged up all my ad opportunities with things we already know I won't buy so I cannot see ads that I *MIGHT* act on. 

The fault isn't with the advertisers - lord knows we have to do what it takes to make a sale. (They should certainly look at the return and opportunity costs more closely before buying  more.) But the consolidators have a real burden here to improve their algorithms so the whole category of display advertising isn't lost to all audiences as a meaningful channel.