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.