The following guest post is courtesy of Bart Burggraaf, Managing Director and Partner, MediaGroup London.
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Bart Burggraaf, MediaGroup
Research estimates anywhere between 30% and 60% of display ads are viewed by robots.
Think about that for a moment. Right now, at least 30% of your display advertising budget might as well be flushed through the toilet.
How much of an impact would it make on your bottom line if your display advertising would perform 30% better? And it is not just Display Advertising. The problem exists with Pay Per Click search engine advertising, video advertising, native advertising; basically all parts of your online advertising budget are touched by fraud.
What can advertisers do about this?
I’ll touch upon that in a moment, but let me first explain why this ‘fraud’ exists in the first place. You see, with the advent of programmatic advertising and the explosion of available impressions, publisher revenues have been on the decline. On the other hand, advertisers have been demanding lower and lower CPMs to reach the same audience numbers, and this has in a way rewarded those publishers with the lowest quality inventory. When faced with these issues, publishers have been forced to supplement income by way of bought audiences.
What that means is that publishers buy cheap advertising at a few cents a click to gain additional traffic. They use networks, pay per click advertising, native advertising and so on to inflate the audience numbers they get on their site. But because they still need to make a profit, these visitors need to cost less then what their advertisers are paying for these impressions. So naturally the quality of them HAS to be lower. This in turn means that some not so scrupulous traffic providers are using ‘robots’ instead of real humans to lower the cost of their traffic. Even if they don’t use outright botnets to gain additional traffic, publishers still get additional visitors that are not as high quality as visitors that would naturally visit their sites. So there is a loss for the advertiser. And I didn’t even touch upon viewability; ads that are served on a page but not visible to the visitor. This is another huge percentage wasted ad budget.
But the news is not all bad. In terms of ROI, Display advertising still works when advertisers measure and optimize based on results and ‘fraud’ is certainly not a reason to stop doing display (or other channels) all together. What this does mean is that advertisers need to be very sharp on the traffic they buy. If they spend a lot, perhaps use tools to verify impressions before buying them and certainly for post campaign analysis. When possible, buy highly viewable ad spots on high quality sites and certainly you need to understand the ROI of the advertising you do.
If there is one thing I can tell you, it is that Ad Fraud exists, it is not going away, and you need to measure it and include it as a topic to discuss with your vendors.