Latest On The Blog
Who’s Winning the War in Online Advertising?
It’s not online advertisers, that’s for sure. According to statistics released by comScore in June last year, 46% of online display adverts are never seen by website visitors – at least the human kind. It seems that one of the biggest problems online advertisers face is ad fraud – ads are viewed but not by people, instead they’re “viewed” by bots or spiders. Not only does this horribly skew the accuracy of ad analytics, but it also means that advertisers are paying for views that shouldn’t, technically, count.
This is bad for two reasons:
1) Advertisers are buying for views that aren’t actually seen.
2) Advertisers pay again, this time in lost sales.
According to Kellogg, one of comScore’s clients, improvements in digital ad viewability translate almost directly into increased sales life. So, ad fraud (views by non-human eyes) can have a disastrous impact on companies’ profit margins.
Technology is the enemy … and the weapon
As is naturally the case in the digital world, what technology harms it can also heal. Various companies have been furiously working on ways to either identify ad fraud or remedy it. One of the most promising companies, a London-based start-up called Spider.io, took the former approach, developing a system capable of tracking ad fraud. It was so successful that it made Google sit up and take notice.
What Google notices, Google usually wants. And what Google wants, Google usually gets. So, it should come as no surprise that it recently acquired Spider.io.
Google has a vested interest in the accuracy and authenticity of online ads, according to Leo Mirani. Basically, this is because anything that threatens the integrity of the online world threatens Google’s integrity. To be brutally honest, it also threatens Google’s bottom line, and no one likes having their bottom line threatened, especially not the most powerful company online.
Google (and advertisers) need to eliminate (at least seriously reduce) online ad fraud not only to protect their profits, but also to ensure that the online ad industry keeps developing and evolving. According to Mirani, brand advertising is where all the money is at these days, and it’s one of the forms of online advertising that is most threatened by ad fraud. This is because it is measured on a per-view basis.
In order to develop brand advertising and entice companies to spend more of their budgets online, agencies need to be able to guarantee success, which means guaranteeing human eyes and not bots. At the moment, companies are still not entirely convinced that TV, newspapers and magazines aren’t a safer bet for generating brand awareness.
Spider.io is simply one weapon in the war against ad fraud – one which Google will no doubt learn to wield to remarkably good effect.
Fraud is not the only threat
As if fraud and bots weren’t bad enough, online advertisers also have to contend with online piracy. Now, to be honest, online piracy doesn’t threaten online advertising directly. Instead the threat is more insidious as it threatens the integrity of the industry.
As online piracy continues to grow and become an even bigger problem for text, audio and visual content producers, there are calls for online advertisers to be more judicious about where they choose to place their ads. According to Lucia Moses, approximately $227 million of online advertising revenue is going to piracy sites. This doesn’t please copyright owners, or anyone else interested in maintaining best practices and high standards of ethics in the online advertising industry.
According to Moses, the 4As (American Association of Advertising Agencies) and ANA (Association of National Advertisers) have already adopted best practices designed to keep members from advertising on pirate sites. What the level of compliance is, however, has yet to be determined.
Of course, it’s not as simple as writing up some best practices and hoping that advertisers will follow their consciences. In many cases ad placement is automated, and when it isn’t, a lot of parties play a role in determining where ads are placed. Often brands – the party that suffers the most from reputation backlash – have no input whatsoever.
It’s a complex problem with no simple solution. Fortunately, interested parties have recognised the severity of the problem and are willing combine forces to find workable solutions. In the meantime, it might be a good idea for all agencies that work online to at least take a look at the best practices, so that they can see where they fall short and where they can start making a difference to their own tactics and strategies. Their reputations and those of their clients may depend upon it.
Image credit: Paul Flannery (psflannery), CC BY 2.0, via Flickr