There is a serious conversation to be had about advertising effectiveness, and the industry probably does not have enough of them, argues Bench Media co-founder and CEO Ori Gold.
Former Mastercard marketing chief Raja Rajamannar recently pushed that conversation hard at the Marketing Association of Australia’s RESET conference. As reported by B&T, he cited research suggesting that only 2 per cent of advertising delivers on its stated objectives, leaving the remaining 98 per cent as a waste of money.
He also took aim at YouTube’s advertising model and argued that marketers have accepted systems and metrics that fundamentally do not serve them.
There are legitimate issues underneath that criticism. Marketers should be asking harder questions about where money goes, what platforms claim, how performance is measured and whether too much decision-making has been handed over to systems they do not fully control.
The problem is that the argument becomes less convincing when almost every part of the media system is reduced to waste or dysfunction.
The 98 per cent claim is the obvious place to start. Taken seriously, it suggests that almost the entire global advertising economy is irrational. Thousands of sophisticated brands, finance teams, procurement functions and marketers are apparently committing enormous sums to media year after year while almost none of it delivers against its intended objective.
Advertising unquestionably wastes money. There are poor briefs, weak creative, lazy planning, questionable attribution models and campaigns optimised towards metrics with little connection to commercial outcomes.
But there is an enormous difference between media waste, measurement failure and media not working.
Advertising creates value in different ways and across different timeframes. Some media captures existing demand. Some creates future demand. Some builds familiarity and mental availability. Trying to judge all of that through one definition of success is precisely how marketers end up making bad media decisions.
It is also where the 98 per cent statistic becomes problematic. If an advertisement does not achieve the objective assigned to it, that does not automatically mean the media investment produced no value. The objective may have been poorly defined, the measurement incomplete, or the effect outside the period being measured.
That is not an excuse for weak accountability. It is an argument for better accountability.
Rajamannar is on stronger ground when he challenges the power of the major platforms. There is a legitimate concern when the same company controls audience targeting, media buying, optimisation, attribution and the reporting used to demonstrate that the advertising worked.
That deserves more scrutiny, particularly as AI pushes media buying further towards automation.
But the answer is not to conclude that media and advertising itself is fundamentally broken. It is to become more disciplined about separating platform reporting from actual business impact
Showmanship vs serious diagnosis
The criticism of YouTube illustrates the problem with taking the argument too far. Rajamannar reportedly focused on the familiar experience of waiting for the skip button and questioned the value of advertising audiences may actively want to avoid.
The underlying point is fair. An impression is not attention, and viewability is not effectiveness.
But a skipped ad does not tell you whether YouTube works as a media channel. The relevant questions are incremental reach, attention, cost, audience quality, response and ultimately the impact on the actual business objective.
Those questions require analysis. “People skip ads” does not answer them.
This is where the broader argument starts to feel more like showmanship than serious diagnosis. When the conclusion repeatedly becomes that the system is broken and almost everybody participating in it has failed to recognise the obvious, the provocation starts to crowd out the substance.
Media absolutely needs more scrutiny.
We should be challenging black-box optimisation, platform attribution and metrics that confuse activity with effectiveness. Agencies and marketers should be able to explain not only what they bought, but why they bought it, what role it was intended to play and what evidence suggests it created incremental value.
AI will make that responsibility more important, not less. As platforms take greater control over targeting, bidding, creative and optimisation, marketers need stronger independent measurement and enough media expertise to question what the machines are recommending.
That is a serious argument about where media is heading.
Saying 98 per cent of advertising is wasted is a much better headline, but a much weaker diagnosis.
Marketing does not need less scepticism. It needs better scepticism, grounded in how media actually works.
