Digital advertising started sometime in the early 1990s and has come a long way. The Web business has evolved from purely display advertising and email marketing to the large search, social and video business of today. Digital advertising has seen the fastest growth among all media, in fact, redefining even print and television businesses.
This growth has come at a price and marketers have been the biggest victims of the greed that drives fraud in the industry. There are various levels of fraud that affect the digital ad business.
The most basic level of fraud involves viewability of ads. A vast majority of ads are not even seen by users on the Web. Internet giant Google Inc. admitted in a December 2014 report that 56.1% of its ad impressions were not actually seen.
A large part of media-buying on the Net is based on so-called impressions. However, an impression has nothing to do with an online publisher or an advertiser impressing a user by exposing an ad. An impression is delivered or burnt the moment an ad is served from an ad server to a user’s browser, irrespective of whether the user is on the webpage or not, irrespective of whether a user has scrolled down the page to where the ad is exposed.
Basically, an impression has nothing to do with human eyeballs. If a digital media plan states that there were one million impressions, it simply means that multiple ad servers served ads to an Internet browser one million times. The ad was probably served on an ad slot below the fold, where the user never scrolled, or it was served on a new tab or page, which the user never opened, or the user closed the page before the ad was fully delivered onto the webpage, or any other reason.
While the above case illustrates impressions served to human beings, the bigger fraud is when impressions are served to bot traffic, which does not even require a human using a browser, as these are artificially created impressions, in the absence of any genuine traffic.
Click fraud is another big issue that affects the business. While most marketers and users agree that they rarely click on ads, a large part of Internet media buying is done on a cost per click currency. Click-through rates (CTRs) are the most debated points in discussions over media selection. While accidental clicks are filtered largely through analytics, they still account for a large part of paid clicks. In addition to this, bots that disguise multiple IPs (Internet Protocols) are used to generate multiple clicks within media campaigns.
At present, video is the largest growth driver for the digital medium. And some of the largest frauds also occur in this space, also because video ads command a significant price premium over regular banner ads. Good quality video is limited in supply or is expensive to advertise on. Marketers driven by profitability and price efficiency try various ways to advertise on cheaper solutions. This has forced various forms of fraudulent practices within the online video space.
The same brand ads run in loops along with movie trailers without any frequency caps. Ads, which are supposed to run as pre-roll (which are supposed to precede video content on demand), actually run within banners. Marketers do not monitor most of these and ad networks make a killing out of these practices. In a price pressure scenario, they have no other way of ensuring that they do not make a loss.
In a media campaign worth Rs.1 crore, if only 50% of the ads have a chance to be seen by the user (not guaranteed as seen), then we are talking of wastage of Rs.50 lakh per campaign. With the digital ad industry growing at 35-40% year-on-year, touching Rs.5,000 crore, we are talking of huge losses.
The sad truth is most of the people involved are in denial and helpless. Many of the decision makers are aware of the existence of such frauds but are either reluctant to accept them or not ready to invest additional resources to identify and correct them.
There are many tools available in the market that can help identify many of the frauds and address most of the concerns. Advertisers can monitor viewability rates and buy ads on a viewable impression basis rather than by served impressions. They might have to pay a higher price to ensure viewability, but at least, they have a guaranteed exposure to their audience, rather than a fervent hope that their potential consumer has been exposed to the ad. In fact, a recent Comscore report suggested Kellogg Co. saw a 75% increase in sales lift by increasing viewability rates by 40%.
Marketers have to actively work towards addressing these issues. Rather than kill the medium for all the flaws, they need to work towards methods and processes to minimize such practices. They need to re-evaluate their media-pricing models from buying cheap impressions to buying viewable impressions. They need to invest in better tools and processes, such as third-party ad-serving and ad verification, and make publishers and ad networks more accountable to deliver quality over quantity.
Praseed Prasad is chief growth officer at IceCream Labs. His monthly column will explore facets of digital media affecting consumers and marketers.