Juha Saarinen: Online advertising needs to be fixed before Google bleeds us dry

It's disheartening to see how badly advertising is done on the internet. Photo / 123RF

As someone who thinks advertising done right is a good thing that helps people find what they want, it's disheartening to see how badly it is done on the internet.

This is biting the hand that feeds you, but I can understand why so many people resort to ad blockers.

Classified ads used to be "the rivers of gold" that underpinned newspapers. What should've been the digital rivers of gold are often more like the internet sewers of malware that nobody wants to dip into.

Yes, when internet ads go bad they can be not only annoying, but become "malvertising" and damaging.

Bad advertising encourages content farms which serve up clickbait that nobody needs, but which is cheap to produce and which pollutes the internet massively and, often serves up malvertising. Malvertising in a nasty practice of infecting adverts with malicious code, they tend to alternate with legitimate ads, making them hard catch.

Then there's automated ad fraud, like the Russian Methbot ring that fakes inventory and clicks, and which siphons off millions of dollars a day.

That's money which should go to legit purposes, like keeping news sites alive and bringing customers to businesses.

Clearly, there's a massive problem that's hurting readers and site visitors, legit advertisers, publishers, and journalists whose work is being tainted by bad ads and which add injury to insult by ripping them off.

No wonder then that publishers are looking beyond advertising to fund media sites. Online user generated encyclopaedia Wikipedia has managed to survive for 16 years on donations, something that must've encouraged its founder Jimmy Wales to kick off the Wikitribune project.

Wikitribune will work in a similar fashion to Wikipedia, with the reader community working with journalists on stories. The journalists, and the site itself, in turn are paid for with one-time donations and monthly subscriptions from readers.

It's an interesting concept, and we'll see if Wikitribune takes off. As of this writing, Wales and company have already hired five out of 10 journalists for the Wikitribune starter newsroom.

It'd be fantastic if it does, but until the concept has proven itself, advertising (and to a lesser degree, paywalls and subscriptions) is what puts bread on the table for media and it needs to be sorted out.

New Zealand is too small to survive two giant leeches like Facebook and Google bleeding us dry, and we need to work out viable, good ad platforms that local companies and customers will use.

Fixing the mess will require a total rework of online advertising, to weed out the dross and criminals behind it.

There is an incentive to do so, because you can make money from internet-borne advertising. Facebook and Google are doing pretty well, and this year are predicted to make a colossal $153.5 billion in ad revenues. That represents less than half of the global ad spend this year, so it's not like there isn't money sloshing around. Even in New Zealand, internet ad spend last year hit $890 million according to IAB stats.

The problem is that Facebook and Google will get most of that ad spend, with little being pumped back into the local economy, or to our media companies that produce the material the internet giants earn money out of.

That has to change. New Zealand is too small to survive two giant leeches like Facebook and Google bleeding us dry, and we need to work out viable, good ad platforms that local companies and customers will use and which will be transparent. And malware free.

It'll be difficult to compete against the online giants' enormous economies of scale, but publishers should get working on this together, sooner rather than later.

Perhaps we should level the playing field a little, with a Facebook/Google tax to claw back some of the money now going overseas, and support local media organisations in the process?