Before the pandemic began, I was flying back home from the San Francisco area and while the security lineup at the airport wasn’t horrendously bad, it was a memorable airport visit none-the-less. In the U.S., the Transportation Security Administration (TSA) has a program where travelers can access a special, faster line to go through security at airports – called TSA Precheck. However, on this particular day, there were so many frequent travelers that the precheck line was substantially longer and slower than the regular line. Despite this obvious fact, I watched in amazement as traveler-after-traveler continued to choose the precheck line over the standard line. Why was this happening? Who were these idiots?
I witnessed a human flaw that I am sure we are all aware of – the perceived value of exclusivity. The precheck travelers felt like they were part of an exclusive club and were told that one of the main benefits of this exclusive club was spending less time in security. It turns out that this phenomenon is well-researched and marketing firms regularly take advantage of this human condition.
In an amusing example of this research, a study showed participants two jars of cookies and then asked participants to chose one. One jar was always full of cookies, and the other only had two left (to avoid the participant feeling bad if they took the last one). Consistently participants chose the jar with fewer cookies, even when they switched which cookies were scarce or abundant. Why am I talking about cookies and not the internet kind? Because publishers fall into this same trap every single day.
In the ad management industry, several companies prey on unsuspecting publishers by creating false exclusivity. They do so by creating arbitrary barriers to entry such as high minimum pageviews or visits, percentage of traffic from the United States, etc. While some of the requirements may have valid reasons behind them, such as these companies’ inability to handle a large volume of customers, others do not. To make it worse, these companies take advantage of niches filled with talented writers and bloggers – many of whom aren’t as experienced with the online ad industry. And yes, it does work.
In this example, a publisher removes pages helping many people just to hit an arbitrary country traffic percentage threshold. Keep in mind that removing his Indian traffic didn’t magically increase his traffic from the U.S. or make his site more valuable. It almost certainly will do long-term damage, but hey, anything to get into that “exclusive” club. It doesn’t matter if you deleted the content you worked hard on or had to rack up your credit card to pay for a country club. You’re in!
What’s even worse is that once individuals jump through hoops to get into an exclusive club, they don’t want to admit that they made a mistake. It’s called choice-supportive bias if you’re interested. The problem with this is that this then helps provide “social proof” for others to make the wrong decision. “I bought a Louis Vuitton bag. It’s amazing and worth it”. Of course it is – you’d look like a fool if you admitted it was just a bag that holds your emergency ketchup packets.
This sales tactic isn’t unique to online advertising; many companies produce Limited Edition items or use limited time or limited quantity scarcity to increase purchase intent. The thing is, faked exclusivity doesn’t create value; it just creates perceived value. I’m going to teach you how to not only avoid falling victim to this sales tactic but to use it in your favor, and it’s simple.
First, I’ll let you in on a little secret that they (and I) don’t want you to know; these ad management services only grow by adding more publishers. Your site is the scarce item. It is the definition of quantity limited scarcity. Through this simple recognition and refusing to grant the other party the power of scarcity, you’ve already flipped the tables. Just like me in that airport line, you will now be standing on the side of real benefit, not perceived, wondering what others are thinking.
“Scarcity triggers an emotional response because we find it hard to resist wanting scarce things. Scarcity floods us with emotions and generally makes clear thinking difficult. Most people have an innate view that scarcity increases value. If something is only available in limited quantities or for a limited time, we make a mental shortcut and assume it is more valuable and of higher quality – because it’s harder to get.”
While the solution is simple, I understand it isn’t easy. Exclusivity plays to multiple human desires, some of them counter-intuitive. Fulfilling needs like uniqueness, conformity, and avoiding future regret, resisting exclusivity marketing can be difficult, but I offer you the following defense – results & testing. A service like ad management is not like a handcrafted item or a hotel room with an ocean view, i.e., it is not of higher quality, nor is it genuinely scarce. Exclusivity in ad management is a sales tactic, and once you realize that, you’re free.
Online advertising is about scale – the size of the audience and the amount of data to make decisions. Since it’s about scale, an exclusive product is worse by its very nature of being smaller. My company, Ezoic, reaches more than 700 million unique individuals each month; this gives us tremendous negotiating power with advertisers and a massive data advantage when making decisions on behalf of publishers. Ad management companies that are, by their admission, 80% smaller are at a severe disadvantage in providing real value. Still, they have decided that perceived value is more important than the actual value.
The idea that a smaller size is a disadvantage in large service and data-based markets makes sense. Google and Facebook dominate the online ad market because they have the largest audiences and most data. Meanwhile, countless niche ad companies have come and gone – I remember DogTime Media – exclusive just for pet websites – it can’t get more exclusive than that!
If you’re looking for another clue about whether a service provides real or perceived value, ask them if they allow split testing. In recent years, there has been a sad trend toward contractually banning split-tests. The reason for this change is apparent – the party that consistently performs worse doesn’t want you to test and the party that performs better, does. Google Ads allow competition, so do Facebook Ads and Amazon too. The companies than ban true testing will propose back-to-back testing, of course, but that’s such an extensive enough scam that I’ll save it for another post entirely.
While these recent trends are sad, and I find it disheartening to see so many fantastic content creators being taken advantage of, I am optimistic about the future of the publishing world. My experience with publishers is that they are smart, strong, and most-of-all, independent. Online content consumption continues to grow rapidly, and we still haven’t reached the point where online advertising spends match the time spent on the medium. Despite the bad press Google receives, my experience is that Google is continually improving at showing users results that are high-quality and provide a good user experience. The publishers that write great content that offers a good user experience will ultimately be the ones to thrive long term, and the ones that only focus on half the equation will falter.
For my fellow nerds: