There’s a boatload of money — up to $9 billion — that goes into what’s known as the television upfronts, a showcase of the latest network offerings for the upcoming TV season. The media extravaganza wraps up this week with the four big broadcast networks and some cable channels finalizing their pitches to advertisers. One main theme the TV people have been working with is the assertion that digital advertising is not living up to the hype. Recently, Facebook admitted that it was overcharging some U.S. advertisers — again. Senior tech correspondent Molly Wood joined Marketplace Morning Report host David Brancaccio to get to the bottom of how Facebook is dealing with its latest debacle and how TV is trying to cash in. Below is an edited transcript of their conversation.
David Brancaccio: So first, what's going on with our Facebook friends?
Molly Wood: This week, Facebook admitted that it had overcharged some advertisers for video ads, and it was a very small instance. In fact, I think they said they were refunding advertisers a median of $10. But the real problem for Facebook is that it is the 10th time just since last September that Facebook has fessed up to some problems with ad metrics. And considering how much advertising Facebook sucks in, it has people worried that, you know, they're maybe not getting what they paid for.
Brancaccio: And the thing about online digital advertising is you could measure it. There could be hard numbers. The numbers are not always so hard.
Wood: Yeah, I mean advertisers are addicted to these metrics — the magical ability to measure how long someone looked at an ad when they clicked on it. You know those metrics gave advertisers a real sense of comfort and a sense that they actually knew what was happening when they placed an ad somewhere. And now they're starting to think, "Hey, maybe that's not true at all."
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Brancaccio: Meanwhile, the competition, the TV networks at their upfronts, are trying to pounce on this. What are they saying about digital advertising?
Wood: You know, it's an interesting year, because this is the first time since sort of the rise of social media advertising that you're seeing the major TV networks come out really strongly against it. They, for a while, sort of played their own game, made their own pitches. Now they're saying, "You can't trust this market." These online ad dollars increasingly go to only Facebook and Google, so you might have metrics problems like we talked about. You could end up next to an ISIS propaganda video on YouTube, and TV advertisers are saying, "Look, we're the devil you know. It's safer here, and you know what's going to happen, you know we're going to still reach audiences."
Brancaccio: Molly, what's your sense of this? You've covered this since really the inception of digital advertising. Does the whole industry have clay feet now?
Wood: The industry had sort of perceived advertising as moving in an obvious direction, and that direction was digital. And I don't think that is the case. I think TV still has all the same problems that it had before. There are declining ratings, there are fewer spots for ads, those ads might cost more. But the digital ad market is not the catchall. It is not the be all, end all, and it's not going to save media. And so I think what you're going to see is a more honest conversation about how this really shakes out as opposed to one winner and one loser.