Online Ad Viewability and Fraud

Two of the biggest issues facing the online advertising market today are inextricably linked: viewability and fraud. Evidence of big: Kraft having spent $35.9 million on digital ads in 2013 recently announced it was rejecting 75-85% of the impression offered due to concerns over viewability, fraud or unknown quality.

Let's start with viewability. The metrics for a viewable online display and video ads have broad market acceptance and the support of major industry bodies (Media Ratings Council, Interactive Advertising Bureau, etc.). In 2014 MRC lifted its advisory for both types of ads enabling them become a currency upon which buyers and sellers trade. Clearly a step in the right direction.

However, the incidence of viewable ads in my opinion is strikingly low. Industry averages from multiple sources put viewability at somewhere in the mid 40% range. Our own experience from auditing 3.6 billion display impressions over 120 campaigns in 2013 was that 40% of the ads were viewable. The picture gets a bit dimmer when you consider that some of those "viewable" ads were a result of fraud.

No one really knows the extent of the fraud problem but estimates are a high as $6 billion annually. It has also been estimated that one third of online traffic is fraudulent. That traffic generates a lot of ad impressions! Doing some simple math, one who buys 100 impressions gets 40 viewable and of those one third are fraudulent. That leaves 27 impressions.

Why does the market put up with this? One reason is that many parties in the supply chain realize revenue based on volume so there is little or no incentive to change the status quo. To initiate a change there would have to be a radical shift in mindset to focus on quality rather than quantity. There would need to be an equal radical shift in pricing which could result in higher fees from sellers and better audiences for buyers.

Until that happens, here are some best practices which may mitigate low viewability and fraud.

For Buyers:

  • Make viewability a currency for purchasing impressions
  • Ask sellers for independent, third party verification of impression claims
  • Trust sellers that offer transparency for metrics gathering and reporting
  • Have a general understanding of the methods used for ad verification and fraud detection/prevention

For Sellers:

  • Employ technology for fraud detection and prevention
  • Be transparent with buyers as to the technology used
  • Allow easy "mid-course corrections" to campaigns which may be encountering low viewability and/or suspected fraud
  • Provide detailed campaign reporting which is actionable