Stats Show Digital Marketers are “Getting Mugged”

warning-internetadsBillions – yes, that’s billions with a “b” – of dollars are going to waste on digital ads due to fraudulent web traffic, reports D.B. Hebbard in Talking New Media. He cites a new study by White Ops (an ad fraud detection firm) that shows “11 percent of traffic purchased may be fraudulent, actually traffic generated by bots (a software application that runs automated, repetitive tasks such as pinging websites).”

This research comes to light just days after Google admitted that “many display ads that are served never actually have the opportunity to be seen by a user” (with “many” actually being “most”, 56.1% to be exact according to Ingvar Bjork in VentureBeat.)

Add to this the fact that the IAB defines an ad as being viewed if at least “half of an ad’s pixels displayed for one second,” writes Sean Hargrave in MediaPost, and you have a perfect storm of waste and abuse.

That’s three pretty big strikes against your digital marketing budget: huge amounts of fake traffic, low viewing rates, and a rather generous definition of what constitutes a view. So why aren’t more marketers in absolute revolt?

Because digital ads are cheap, and they like them that way, says Hebbard.

“If so much of the traffic being reported were actually legit – and one must admit that it would be nice if it were – then CPMs would have to rise,” Hebbard explains. “Instead, marketers are paying rock bottom prices for digital advertising, and some ad buying agencies want to see the price for legitimate, audited readers go down, as well.”

Hebbard advocates both fixing the bogus traffic issue and not pandering to the desire to keep these ads cheap, noting that this will likely raise digital ad rates in the long run. If they really can fix the fraud and waste, that would probably be okay in terms of ROI, we have to believe.

Hargrave in MediaPost goes on to ask “How can [advertisers] be resigned to collectively flushing so much budget down the proverbial sink? This is made all the more pressing when you consider that so few people click on advertisements today that display has pretty much become the preserve of branding. How can you know, then, that you’re raising awareness if you don’t know your messages stand a chance of being seen?”

It’s a valid question, made more urgent in light of the current debate raging about audience versus circulation in magazine advertising.

Will advertisers care that digital content gets a ton of shares on social networks, when they know there is so much waste in the digital ad stream? If the recent news from MediaVest (who will no longer count digital circulation toward ad rate guarantees) is any indication, the answer is a clear “no.”