NEW YORK: The steady increase in invalid traffic (IVT) and the growing popularity of ad blocking have combined to "undermine the integrity of every other performance and effectiveness metric" in digital marketing, according to a leading executive from comScore.
Writing in the most recent edition of the Journal of Advertising Research (JAR), Gian Fulgoni – the Co-Founder/Chairman Emeritus of comScore – cited a recent Association of National Advertisers' (ANA) report that estimated marketers will waste some $7bn globally in 2016 buying online ads that people never see.
In Fraud in Digital Advertising: A Multibillion-Dollar Black Hole? - How Marketers Can Minimize Losses Caused by Bogus Web Traffic, Fulgoni offered: "Advertisers, agencies, and publishers alike feel the pain of IVT while the fraudsters benefit."
Specifically, he continued, "For media buyers, the negatives include wasted advertisement spending and decreased return on investment (ROI); lack of transparency into the drivers of performance; and missed opportunity for advertisements to have an impact."
For media sellers, he advised, IVT causes "lack of trust in the value of their inventory; damage to their relationships with buyers; and loss of revenue to 'long-tail' (less-trafficked) sites on the open exchanges."
Buyers of advertising, continued Fulgoni, should "use campaign measurement tools that accurately identify all forms of non-viewable advertisements, including both general and sophisticated IVT" while "insisting on viewable audience guarantees."
Fraud becomes more dangerous as the stakes increase, too: "Video advertising attracts advertisers because of its ability to lift sales. The high CPMs of video advertising also attract fraudsters, however, so advertisers need to be careful when buying on this platform, and it would be prudent to require some form of audience guarantee," wrote Fulgoni.
"Meanwhile, advertising on premium publisher sites offers marketers the benefits of lower fraud, higher viewability and greater sales impact.
"Advertisers also need to ensure that inputs to market mix models only use validated viewable advertisements and not the gross tonnage delivered. Failure to do so will lead to erroneous conclusions that understate the impact of digital advertising.
Similarly, "because of the use of ad-blocking software by young millennials, marketers need to investigate ways to reach this segment that don't just rely on digital advertisements." The use of branded content is one possible remedy.
The full version of "Fraud in Digital Advertising" and the complete contents of the latest issue of JAR can be found here.
Data sourced from Journal of Advertising Research; additional content by Warc staff