Commentary
Viewability + Fraud = You're Wasting A Lot Of Money
- by Tyler Loechner , Staff Writer @mp_tyler, July 13, 2015
Digital marketers are wasting a
lot of money. Like, over 100 Super Bowl’s worth of money. Not 100 Super Bowl ads, but every ad shown in the next 100 Super Bowls.
And that’s just marketers here in the U.S. and in the UK.
An Association of National Advertisers (ANA) and White Ops study from 2014 estimated that digital marketers were on pace to lose $6.3 billion to bots in 2015. When you toss viewability into the equation as well, waste gets a whole lot worse.
A new whitepaper from procurement services provider Proxima paints the issue in a different light. Proxima’s worst case scenario has U.S. and UK digital marketers wasting about $37 billion in advertising this year, and it gets to that high number through some relatively straightforward math.
Per eMarketer projections, the U.S. is expected to spend about $58.5 billion in digital this year, while the UK is expected to shell out $12.6 billion. (The numbers Proxima use are actually slightly lower, pinning the U.S. at $50 billion and the UK and $11.9 billion).
We’ll call it a round $62 billion. From there, Proxima takes fraud and viewability estimates from around the industry. For example, nearly all viewability studies find that only about half of digital ads are viewable, and last year the IAB said about 36% of online Web traffic is fake.
“The combination of the two — i.e. an advert appearing out of sight of a human and on a Web site that is practicing one or more of these fraudulent behaviours — has potential to waste 89% of spend,” a Proxima representative said. “In our experience, however, companies are typically wasting between 40% to 60% of their spend on these two practices. The $37 billion figure is taken from top end of this range.”
Even if we went to the low end of the range (40%), it still comes out to about $25 billion lost to viewability and fraud alone.
Tyler Loechner is a MediaPost Reporter covering real-time, programmatic, RTB and more. You can reach Tyler at tyler@mediapost.com.
This math is so wrong it's crazy. Just straightling fraud and viewability metrics across the whole of digital media spend doesn't demonstrate ad waste. Yes plenty of ad traffic is fake - but that doesn't mean that's where ad dollars will run. Yes viewability matters. But it doesn't mean it will take up that equivalent piece of the ad pie.
Ice cream sales spike in the summer. So do murders. So ice cream must cause more murders, right?
Do a LITTLE critical thinking to understand HOW advertisers spend. They reward quality. They like going direct to publishers. They use block lists and white lists. The market rewards quality, and quality begets performance - be it brand awareness or conversions (and all points in between).
Scott has a very good point. However, the math needs to be even more finely tuned to understand true "wasteage". I would suggest that simply attempting to add fraud to non-viewability is in error as these may well be one in the same where they overlap. Then there is Scott's point which is that more dollars are flowing to real impressions and In-View ads.
Let's not overdo the "woe is digital" perspective. Also, consider television/cable and print where ads may never be seen because:
1) The viewer was in the kitchen or the bathroom during commerical break, and
2) The reader never looked at that page where the ad sits.
Digital is eminently measurable which also makes it very worth working through the kinks and improving performance.
Measurability is a double-edged sword for the digital ad industry. While fraud and viewability are often lumped together, they represent two different plagues. While the buy-side can identify and cast some light to help mitigate -- it would make sense that the supply-side (e.g. publishers, SSPs, ad exchanges) are better-positioned to address these challenges.
Since you cannot define waste in a market where there is unlimited supply, this entire article is pretty much worthless. However, you can define fraud and in that regard, (or the millions of cases) all you have to do is follow the money.
Who is benefiting from the most from the current market? Is it the pubs or the advertisers or the companies that make their money off of volume and traffic? It’s not the bots themselves, they’re just machines but there's a human in the middle taking the checks and cashing them...
This math is wrong. The fact that a Proxima representative made that statement of 89% makes the entirety of their results suspect.
Fraud and viewability are completely separate issues but they're also hard to measure for a census like this. Proxima just relies on aggregate data reported from other vendors which is unreliable as there can be 100% discrepancy between companies (thanks for poor IAB auditing for viewability and no standard for fraud checking) so this is nothing more than guessing. Without actually doing a complete study of both fraud and viewability for every single impression over billions of ads, thousands of sites and months of traffic, it's impossible to get any accurate metrics.
The other thing is that if it's so easy to tell the bad and non-viewable traffic... then why is there waste? Shouldn't marketers just not pay for those impressions? If anyone can definitely say a percentage of traffic is bad then advertisers should be able to just pay for the good and skip the bad. There's no way to have one without the other so this is a non-issue.
The real problem is the fact that there is no easy way to check for fraud given today's sophisticated bot networks and until the viewability standard and audits are fixed, viewability will vary wildly depending on whatever vendor is used. Combine that with too many political motivations with buyers and optimizations by suppliers for short-term profit based on cheap discount volume and ads with horrible user experiences (leading to ad blocking) and we have a systemic situation that will only get fixed when the entire ecosystem decides to change.
There needs to be more value placed on quality traffic from top publishers using effective metrics to quantify and deliver actual ROI. We need to focus on attention and engagement, not vanity stats like volume and clicks. There are companies now that are focused on this new wave of digital that can really deliver but it seems the market is still having trouble moving on, and until then, articles like this with random guessing certainly don't help the progress.
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Disclaimer: I'm the founder/CEO of Instinctive, a content marketing company focused on creating, syndicating and measuring sponsored content to generate real bottom-line results for top brands using proprietary tech and modern metrics. More info at https://instinctive.io