Last Tuesday I wrote in Marketing magazine that there was a storm brewing in the digital ad business. The storm just turned into a tornado.
This week, Bloomberg Businessweek published a takedown of corrupt practices in the digital advertising business. The Bloomberg piece has come on the heels of more and more voices pointing out nefarious practices in the world of digital ads – people such as Bob Hoffman, the Ad Contrarian, who has been banging this drum for some time.
He has repeatedly pointed out that in the first half of this year $25m worth of digital ads were pulled out of agencies by brands and put 'in review'. The reason? Digital advertising doesn’t get the results brands are hoping for, because much of the traffic is fake. And it’s not like fake traffic is hard to spot. Ever seen a video called 'Surfing'? Me neither. But it has been viewed 1.5bn times. That would make it bigger than any YouTube video in history – with the exception of Gangnam Style. Or maybe you saw the recent story of a totally blank video – four minutes of nothing – produced by an agency and uploaded to YouTube? It generated more than 100,000 views. The truth is you didn’t see these videos because almost nobody did. They were viewed by robots.
Maybe you saw the recent story of a totally blank video – four minutes of nothing – produced by an agency and uploaded to YouTube? It generated more than 100,000 views.
Publishers need traffic to sell ads. Getting traffic is a time-consuming and costly business. Some publishers prefer it buy it in instead. A legit traffic-generating company such as US company Taboola, for example, might charge publishers from 20¢ to 90¢ per visitor for video content. Even legit companies might use questionable practices. A 'tab-under' is a term used by companies that will boost your web traffic for you. A tab-under opens a window beneath the one you are watching. You may never see that window, but no matter, you have just generated a page view for that page. But some publishers don’t even have to go to that much effort. Go on LinkedIn now and you will find a forum called Buying & Selling TRAFFIC. One thousand 'visitors' can be had for $1. That’s 0.01¢ a visitor.
Most publishers can sell a video ad for 1¢ to 1.2¢ per view in a programmatic (or automated) auction, which is how companies now sell most ads on their video sites, says Bloomberg Businessweek. You do the maths. It’s no surprise that executives at Kellogg started to notice that spots for Cheez-It, Pop-Tarts, and Special K were running on dodgy websites, hidden in pop-under windows, or compressed into screens as tiny as a single pixel. When Kellogg asked for itemised bills from the various ad agencies and data companies it hired, they all refused.
Last year, when execs at Heineken were checking the performance of their online ads, they found the return on their investment was $2 for every $1 spent. (In TV, the return is $6 for every $1 spent). But more shocking still was that only 20% of the campaign ad impressions were seen by actual people.
A study done in conjunction with the US Association of National Advertisers embedded billions of digital ads with code designed to determine who or what was seeing them. Eleven percent of display ads and almost a quarter of video ads were 'viewed' by software, not people. According to the ANA study, entitled 'The Bot Baseline: Fraud In Digital Advertising', fake traffic will cost advertisers $6.3bn this year.
But it’s not all bad. Facebook recently said advertisers would have to pay only when their ads are actually seen by humans. Naturally, Facebook ads are much more expensive than most. The truth is digital advertising is in crisis. Now, then, is the time for groups such as the IAB to stop threatening to sue ad-blocker developers, and start responding in a constructive way to what is happening in their industry. Over to you.