Programmatic advertising may be the most ubiquitous, influential market in the world. Yet almost nobody, including most of its participants, understands how it actually works. It’s something I cover in a chapter of my new book The Death of Truth. The chapter – which attracted a lot of attention after it was excerpted in WIRED is (appropriately) titled “Buying Blind.” It documents how so many publishers and even marketers are blindsided by the unintended consequences of programmatic’s dominant role in advertising.

Even those working with programmatic advertising every day were surprised at how it can actually undermine the journalism ecosystem. It has created a marketplace in which blue-chip advertisers unknowingly finance the worst peddlers of misinformation and disinformation at the expense of publishers who still care about informing readers.

A striking example of this phenomenon occurred in 2019 when my team discovered that Warren Buffett’s Berkshire Hathaway was the biggest advertiser on Sputnik News, a Kremlin-controlled disinformation website, through its subsidiary Geico. This was, of course, not because of a deliberate decision made by Buffett or executives at Geico. Instead, Geico’s funding for Sputnik came in the form of ads the company inadvertently placed on the Russian disinformation site because of the black hole that is programmatic advertising. Comscore and (my company) NewsGuard have estimated there is $2.6 billion a year in programmatic advertising unintentionally going to publishers of misinformation—revenues that quality news publishers badly need.

Companies like Geico use ad tech tools offered by “Demand Side Platforms” — DSPs — to buy these ads. The largest DSPs, as you might know, are Google and The Trade Desk. The Trade Desk (now a partner with NewsGuard in helping to combat this issue) has real-time bidding technology that uses advanced algorithms and extensive data to place ads across the web at the scale of 5.4 million ads per second. But for all the sophisticated data powering the operations of the DSPs, one crucial detail was overlooked as programmatic was invented and flourished: The identity of the websites where a brand’s ads are placed. This has left advertisers flying blind, sending hundreds, thousands, or even millions of dollars into the ether without knowing where their ads will appear. The result: Ads appearing in environments where studies show they are less likely to get cost-effective responses – and also likely to embarrass the brand.

Exclusion and blocking: Blunt, ineffective advertising tools

Seeing how brands have been burned by placing their ads alongside unsavory content, many advertisers and agencies have taken blunt approaches that range from bad to worse:

• One approach involves using “exclusion lists” — a list of websites that an advertiser deems inappropriate — instructing the DSP to block the brand from running its ads on any sites on the list. This approach has some appeal, but it is reactive and never fully effective because, new, hoax websites crop up daily, wreaking havoc on our information ecosystem long before they make it onto an advertiser’s exclusion list. This is true now more than ever as phony websites created by generative AI looking to get in on the programmatic gravy train are popping up every day.
• Another approach involves using “keyword blocklists” — lists of sometimes thousands of keywords like “Ukraine,” “war,” “gay” or “Black” that the advertiser deems dangerous. These blocklists instruct the DSP to block ads from appearing on any webpage that contains even just one of these keywords. But studies have shown that news — especially news serving minority or underserved communities — are disproportionately harmed by keyword blocklists.
• Worse yet, some advertisers have decided to remove their ads from news altogether by blocking their ads from the entire category. This has the obvious effect of harming the news industry, slashing already dwindling revenues for news outlets. But it also has a negative, dollars-and cents impact on advertisers themselves: Missed opportunity.
  
  According to studies, such as those from the IAB and Stagwell, advertising on news can be highly effective. In a 2020 study, the IAB found that “nearly half of consumers find brands that advertise in the news to be more customer-focused and engaging, more innovative, and relevant to them.” Newsreaders are a large but overlooked demographic: 25% of Americans are “news junkies,” according to recent research by Stagwell. Therefore, any strategy that simply avoids or excludes news is failing to reach a large, engaged audience.

Inclusion creates a better ad ecosystem

There is a better way: Website inclusionlists. Inclusion lists allow advertisers to focus their ad spend on pre-vetted, high-quality websites that align with their brand values and target audience. This ensures better placement and engagement, and ultimately increases the return-on-investment (ROI) of ad campaigns. And, of course, this proactive approach reduces the risk of a brand having its ads appear on low-quality or inappropriate sites, including sites propagating misinformation.

My company, NewsGuard, offers one solution for building a high-quality publisher inclusion list. We deploy a team of expert journalists to rate and review the reliability of news sources across the open web based on a set of apolitical criteria of journalistic practice. Using these ratings for more than 10,000 top news and information sources, NewsGuard offers inclusion lists of highly credible news publishers, which can be activated via pre-bid segments through The Trade Desk, Peer 39, and Comscore, or via private marketplaces of trusted news domain lists in SSPs including Pubmatic, OpenX and Magnite.

Because the focus is on websites that pay attention to best journalistic practices, every member of DCN is probably on NewsGuard’s highest-quality inclusion list.

You should brag about It!

Quality publishers can play their part in advocating for the use of inclusion lists as the superior advertising strategy. Publishers can make advertisers aware of inclusion lists in their advertising marketing materials. Many publishers now signal their trustworthiness to advertisers and readers by including their high score from an independent third party in their marketing materials. They can encourage ad agencies to end the harmful practices of boycotting news or using overly broad keyword blocking. They can work with the supply-side platforms to ensure that only other quality news websites are included in ad buys.

This next, logical evolution in programmatic advertising requires that everyone in the process step up to do their part.  Publishers and advertisers would be the most immediate beneficiaries, with news departments getting the revenues they need and brands getting the more efficient purchases they seek. Especially in an election year, we should also keep in mind that democracy will function best with more news resources to support an educated public. Democracy matters. The news matters. And it pays to be the smartest players in the programmatic marketplace

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About the author

Steven Brill is the co-founder of NewsGuard. His new book, ”The Death of Truth,” comes out June 4 from Penguin Random House.