I’ve had an epiphany recently, a moment of clarity that connects two seemingly disparate observations: the astronomical rise in digital ad revenue for giants like YouTube, Facebook and Instagram, and the bafflingly irrelevant ads that pollute my own feeds. And honestly, it boils down to something both simple and infuriating: a significant chunk of these platforms’ burgeoning wealth comes from advertisers who are, quite frankly, throwing away their money.
Let me give you a couple of real-world examples that cemented this revelation for me.
I live in West Hollywood, a stone's throw from the heart of Los Angeles. (It's literally a 15-minute walk from here to there; 3 minutes if you're driving.) Yet, on my Facebook feed yesterday, I was served an ad for some Ohio politician running for re-election. Ohio. I’ve never been to Ohio. I have no discernible connection to Ohio. I'm not even sure I know where Ohio is.
My digital footprint, I assure you, contains zero traces of interest in Ohio state politics. So why on earth is this candidate blowing their precious ad budget promoting themselves to me, a complete non-constituent in California? And me, I imagine, among countless others across the country who have no vote, no interest and no business seeing that message.
Then, just this morning, a similar absurdity unfolded on YouTube. I was greeted by a glossy tourism ad for Los Angeles. Los Angeles! I’m literally down the street from the city. I’m in L.A. every other day, if not daily. Why would tourism dollars be spent to convince me — someone immersed in the city's fabric — to visit? It's like advertising water to a fish.
These aren't isolated incidents; they're symptomatic of a much larger, more wasteful trend. And I’ve figured out why digital ad revenue for these platforms is "through the roof." It’s not just about their cutting-edge algorithms finding the perfect target for every ad (though that certainly happens, too). It’s also, paradoxically, because so many advertisers simply don't target their message to the correct audience.
Think about it: Every time that Ohio politician's ad pops up on my screen, or on someone else's in Texas or Florida, that's money spent. Every time the L.A. tourism board advertises to a local, that’s money spent. These platforms charge per impression, per click or a variation thereof. Whether the ad is effective, relevant or converts into a genuine lead seems, in many cases, secondary to the sheer volume of impressions they can sell.
The "stupidity," as I candidly put it, is undeniably great for these billion-dollar companies. They are essentially getting paid for showing ads to people who have no interest, no need and no ability to act on them. It’s revenue generated from inefficiency, from campaigns that are clearly not optimized, or perhaps, from advertisers who lack the expertise or resources to wield the powerful targeting tools effectively.
And maybe that's the real problem, or at least a significant contributing factor to their soaring valuations: they're getting money from advertisers who are, in essence, making profoundly misinformed decisions about where and to whom their messages should be delivered.
Do I blame the platforms selling the ad space to those idiots? Of course not. They're having people feed them money for whatever misguided reasons.
So, the next time you see an ad that makes you scratch your head and wonder, "Why on earth am I seeing this?", remember that little moment of confusion is likely a tiny fraction of a massive, misdirected ad spend. And somewhere, a platform's revenue numbers are looking a little healthier because of it.
It makes you wonder how much more effective advertising could be if every dollar truly hit its mark, doesn't it? Or perhaps, how much less revenue these platforms would generate if advertisers truly wised up.