Poor-Quality Ads Cost U.S. Marketers $7.4 Billion

Poor ad quality, fraud and waste are top-of-mind issues for marketers. Low-quality ads cost U.S. marketers $7.4 billion last year, according to a new report from Forrester. The report said programmatic media and video are the primary causes of ad fraud spending “wastage.”

The research suggests the problem will grow to $10.9 billion by 2021 if steps are not taken to address it.

The Forrester report described a digital advertising supply chain “riddled with problems, most directly connected to the lack of transparency in ad tech. The result is wasted time, effort, and money, and lackluster ROI.”

Notably, it stated: “The end of digital media’s wild days will be good news for premium publishers that invest in their content, in growing their quality audiences, and in the ad tech partnerships that facilitate honest brokerage of their valuable inventory. The most desirable marketers with the biggest budgets are fed up, and rightly so. They want standards that apply to all digital media, like in television and print.”

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Taking fraud and a lack of viewability into account, marketers are spending, but also wasting billions on digital advertising. The lack of transparency in ad tech only adds to marketers’ challenges.

Forrester noted that the speed and complexity of programmatic buying render the few tools that marketers have to manage the process “useless.”

Worst of all, the report suggested that until standards are set, the digital advertising pipeline will remain polluted. If marketers think they bought 100 impressions for $100, “think again.” The true cost was closer to “double” the original number.

While agencies and trade associations have taken up viewability ad nauseam in the last few years, Forrester suggests even measuring viewability remains a challenge because standards vary.

The Media Rating Council established a benchmark and accredited 13 vendors for display measurement, but their findings “can vary widely,” the report said. For example, media agency GroupM has a much stricter standard. As one ad-tech executive noted in the report: “When you take away the non-viewable ads, there’s not much left.”

8 comments about "Poor-Quality Ads Cost U.S. Marketers $7.4 Billion".
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  1. Ari Rosenberg from Performance Pricing Holdings, LLC, April 5, 2017 at 10:13 a.m.

    where's the I told you so button -- we have to do better -- ad tech can WIN too -- we just have to think more in the line of direct sales with automation as opposed to automation out into the ether -- we have to measure sites in ways that allow buyers to recognize and reward quality -- we have to stop treating the site visitor like garbage.  There is so much we need to stop doing so we can do this better.

  2. Ed Papazian from Media Dynamics Inc, April 5, 2017 at 12:16 p.m.

    What say yoy, LZ?

  3. Ed Papazian from Media Dynamics Inc, April 5, 2017 at 12:17 p.m.

    Make that, "What say You, LZ?"

  4. John Grono from GAP Research replied, April 7, 2017 at 1:03 a.m.

    Hey Ed.   Ssssh.   Be very, very quiet.

    Did you hear that?

    Crickets.

  5. Peter Rosenwald from Consult Partners, April 5, 2017 at 12:33 p.m.

    Getting on top of and reducing or eliminating wastage has been too low on marketers' priority list for too long. The 'broadcast to everybody' theory of advertising seldom factored in the wastage: With an eye only on the CPM of eyeballs, the fact that large percentages of those eyeballs had no conceivable interest in the product was blissfully ignored by agencies eager to expand budgets and profits.

    'Good' quality ads aimed at the wrong prospects are only a little better than 'bad' quality ads.

    Happily, with all the weaknesses Forrester rightfully points out, the ability to measure cost per sale instead of cost per thousand is the hope of the future. In the last analysis, that's where the proverbial tire hits the road. 

  6. Michael Clark from Beeby Clark+Meyler. replied, April 6, 2017 at 10:38 a.m.

    On the money.

  7. Tom Tyler from GCTVTexas, April 5, 2017 at 1:35 p.m.

    The toxic waste tsunami created by Hollywood, the networks, the global "entertainment" conglomerates and Madison Ave is now rolling across the internet from sea to shining sea, and its paid propagandists are claiming they are creating "standards."

  8. Michael Clark from Beeby Clark+Meyler., April 6, 2017 at 10:36 a.m.

    The industry media should take care to not use the term "digital" when talking primarily about banner ads or display advertising. There are so many more effective options for advertisers for top of the funnel advertising than display. The programmatic ad-tech universe is only good for the tech players within the banner ad industrial complex and the publicly traded media agencies that extract fees from the stack out of sight of their clients. The banner ad is over.

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