Can the News Get Any Worse for Digital Advertisers?

21 Feb

digital media fraudTwo articles published on February 18, one by Reid Tatoris in Marketing Daily which asserts that when it comes to online advertising there are “only 8% of impressions that have an opportunity to be seen by a real person” and the second by Joanna O’Connell, Director of Research for AdExchanger questioning the transparency of programmatic media buys, should raise the hackles of anyone playing in the digital media marketplace.

Mr.Tatoris begins his argument by correctly establishing the Interactive Advertising Bureau’s (IAB) definition of an online ad impression:

A measurement of responses from a web server to a page request from the user browser.”

Based upon this industry accepted definition he suggests that an impression “does not equal an ad opportunity” and proceeds to profile a number of items which can derail the process, most notably the fact that “60% of all traffic on the web is bots.”  Once again, it appears as though the industry’s prowess at trafficking digital ads has outpaced its ability to both measure actual audience deliveries and or to police the legitimacy of the thousands of “hundreds of thousands of websites” that exist today.

When you combine the ongoing concern about the efficacy of the digital advertising delivery with the transparency challenges associated with programmatic media buying, the risk to advertisers escalates. 

Programmatic buying integrates advertiser data with technology assisted processes and intelligence allowing advertisers or their agency trading desk partners to bid on inventory being offered on ad exchanges by publishers.  Automated buying, which often occur on a real-time basis, grew 75% in 2013 to $3.5 billion according to eMarketer and is likely to grow another 38% in 2014. 

There are numerous advantages associated with programmatic buying, including looking at impressions down to the individual level.  However, one of the perceived limitations is the lack of transparency in and around the caliber of the inventory being purchased and the price being paid for that inventory. 

Thus, in light of the impact of impression dilution between purchased and delivered suggested by Mr. Tratoris, and the concerns over the quality, if not quantity, of impressions delivered via programmatic media buys, an advertiser might legitimately ask, “What are we getting and what did we pay for it?” 

In spite of this dynamic, digital media continues to grow, representing approximately 25% of total U.S. ad spend in 2013 and, according to eMarketer, this could grow to 31% of total spend by 2017.  Rather than getting serious about enhanced measurement, improved transparency and fraud protection, the industry rallying cry seems to be “ready, fire, aim” with regard to the efficacy of this media channel and its audience delivery capabilities. 


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