New Findings Expose Huge Risks for Online Advertisers
Few marketers are aware that the digital advertising industry faces a serious dilemma stemming from weak inventory oversight and, in many cases, outright fraud.
A shocking new report from Google reveals that a majority 56.1 percent of all ads on the Internet are never viewed by humans because they appear outside the viewable area of the browser screen. Although this alarming trend is limited to a small number of publishers who serve up most of the non-viewable impressions, the average publisher's viewing rate is still just a paltry 50.2 percent.
In other words, half of all paid online ads are never seen. Imagine if half of all online purchases were never delivered—consumers and businesses alike would be justifiably outraged.
Perhaps more troubling is a recent study from the Association of National Advertisers, which found that advertisers will squander $6.3 billion on fraudulent ads in 2015. In one case, the ANA report found that a respected lifestyle publisher served up 98 percent of an advertiser's video ads to online bots, which are software robots that automate simple online tasks. Of the 4,000 total video impressions from that placement, less than 100 were served to real people. The rest of the pages were opened by mindless robot scripts.
On average, the study found that bots made up more than half of all purchased traffic, and 11 percent of all display ad traffic. These bot impressions were largely drawn from traffic that premium websites had purchased from third-party sources. One insidious form of fraud is known as ad injection, in which browser extensions insert ads into publisher websites without the publisher's knowledge or approval.
Most cases of fraud involve ads viewed on desktop computers because bots are less prevalent on mobile devices. The relative inventory of robot code is also very high for video content.
These problems must leave marketers wondering if their ads will actually appear on the browser screen, or in some unseen area. And, will a paid advertisement actually be viewed by a live person, or a bot? Such questions are troubling for the digital advertising ecosystem because they undermine the real value of every advertising purchase. This concern affects marketers across all industries, including e-commerce, retail, electronics, travel, entertainment and beyond.
Obviously, advertisers should take steps to guard themselves. At the same time, trade groups including the Interactive Advertising Bureau and the American Association of Advertising Agencies should implement tough new standards to crack down and hold publishers more accountable for buying fraudulent traffic.
Until that happens, marketers will need to find their own means to stay ahead of this problem and identify any offending ads in the pipeline. New software tools are available that can spot suspicious interactions, including ads that are consistently clicked at the same time of day. Such patterns should be red flags because humans are more likely to click on ads at random times.
Until the industry can take preventive actions, the burden remains on marketers to monitor ad campaigns for their effectiveness, and to understand the behaviors of normal human interactions vs. interactions with malicious lines of code. Only in this way can the ad industry preserve the tremendous growth opportunity and economic momentum of digital advertising as it continues to mature and evolve in the years ahead.