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Effectiveness of Digital Ads by Augustine Fou
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Effectiveness of Digital Ads by Augustine Fou



What types of digital ads should advertisers choose to use? Here are some stats about digital ads that you should consider.

What types of digital ads should advertisers choose to use? Here are some stats about digital ads that you should consider.



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    Effectiveness of Digital Ads by Augustine Fou Effectiveness of Digital Ads by Augustine Fou Presentation Transcript

    • Augustine Fou- 1 - Effectiveness of Digital Ads Dr. Augustine Fou http://linkd.in/augustinefou acfou @mktsci .com March 2014
    • Augustine Fou- 2 - Author’s Commentary “From the scarily dismal data below, you might think I was ultra-bearish on digital ads. Quite the contrary. Having lived and breathed digital advertising for 17 years, digital is far and away my first choice for doing advertising and marketing, and also what I recommend to clients. The key is to use the right channel and tactic in the right way and for the right purpose.” -- Dr. Augustine Fou
    • Augustine Fou- 3 - Main Types of Digital Ads Impressions (CPM/CPV) Clicks (CPC) Leads (CPL) Sales (CPA) • Display ads • Video ads • Social display • Mobile display • Search ads • Mobile search • Affiliate revenue share • Completed lead forms sold on cost- per-lead basis
    • Augustine Fou- 4 - Digital Ad Spend (IAB FY 2013) Impressions (CPM/CPV) Clicks (CPC) Leads (CPL) Sales (CPA) Search 43% $18.5B Video 7% $3.0B Lead Gen 4% $1.7B 11% Other $4.8B Source: IAB, FY 2013 Internet Advertising Report, April 2014 $36.2B Display 19% $8.2B Mobile 15% $3.7B$2.8B NOTE: figures from IAB FY 2013 ($43B annual ad spend) CPM Performance • classifieds • sponsorship • rich media • email $6.5B
    • Augustine Fou- 5 - Display Ads
    • Augustine Fou- 6 - 29% Non-human Ad Views Augustine Fou- 6 - Source: Solve Media Dec 31 2013Source: Solve Media via Marketing Charts September 12, 2013 51% suspicious 22-29% confirmed bot
    • Augustine Fou- 7 - Sources of Fake Impressions Source: Integral Ad Science, via BusinessWeek Nov 26, 2013 Ad exchanges are particularly prone to fraud because shady sites sell enormous quantities “ad impression inventory” into the exchanges for re-sale.
    • Augustine Fou- 8 - 54% Ads Not In View Source: comScore June 2013 via MarketingCharts
    • Augustine Fou- 9 - Viewability of Display Ads Source: Integral Ad Science Sept 2013 via MarketingCharts Publisher direct is best and lowest risk
    • Augustine Fou- 10 - 23% of Ads are Adblocked Source: PageFair, August 2013 Average Adblocking Rate 22.7%
    • Augustine Fou- 11 - Maximum Possible Effectiveness 77% Not AdBlocked (PageFair) 46% Viewable (comScore) 71% Human (not bot) (Solve Media) x x 25% 25% of ads are human/viewable/not-blocked Display Ads x $7.7B $5.8BOther 75% wasted IAB: 21% of $36.6B FY 2012 Ad Spend
    • Augustine Fou- 12 - Source: Nielsen, October 2011 5% Ads Properly Targeted
    • Augustine Fou- 13 - 77% Not AdBlocked (PageFair) 46% Viewable (comScore) 71% Human (not bot) (Solve Media) x x 25% 1.3% X 5% Properly Targeted (Nielsen) Productive: Maximum Possible Effectiveness Display Ads
    • Augustine Fou- 14 - A new study [download page] from VideoHub indicates that during the first quarter, average viewability for online video ads in the US was 83%, although rates varied widely among properties, from 43% on the low end to 94% on the high end. Broadcast TV sites fared best (89% on average) among property categories, with networks and exchanges (73%) bringing up the rear. Video Ad Viewability Source: VideoHub August 2013 via MarketingCharts
    • Augustine Fou- 15 - Forms of Ad Waste I didn’t get what I paid for: • 10% never get loaded into the browser – Moat • 31% are never “in-view” (fraud or not) – comScore • 20-80% are off demo target (depending on density) – Nielsen • 29% are served to bots – Solve Media • 20-40% are over frequency (bots or not) – Audience Science • 5-30% are served outside your market geography – comScore • 10% (est.) Dwell time < 1 second – SWAG • 5% Overzealous Ad Verification (didnt get shown) – SWAG • 20% Video: Autoplay, Sound off, Below the fold – TubeMogul Net using average values and statistical overlap: 87% wasted Source: Ted McConnell, Brand Innovators Summit
    • Augustine Fou- 16 - Search Ads
    • Augustine Fou- 17 - Click Fraud by Qtr Source: ClickForensics 2011
    • Augustine Fou- 18 - Why Search is More Effective • The ad is served at the exact time the user is looking for something • The ad is based on the exact keyword/phrase that the user typed into search • The advertiser doesn’t pay for the impression, only the click (when user clicks the ad they express interest) • Even in mobile, clicks on search ads are less likely to be accidental (compared with display ads) • Other than the fake ad impressions and ad clicks generated by bots, the remaining 80% (non-fraud, human user) is what advertisers can optimize
    • Augustine Fou- 19 - Search Ads ads shown on fraudulent sites accidental clicks non-fraud, human viewer 5-20% 5-10% 70-90%
    • Augustine Fou- 20 - Ad Fraud Data
    • Augustine Fou- 21 - Digital Ad Fraud Estimates Impressions (CPM/CPV) Clicks (CPC) Search $18.5B $36.2B Ad Spend Display $8.2B Video $3.0B Mobile $3.7B$2.8B (U.S. digital ad spend only) DollarsAvg Fraud Rate $4B50%Display $2B60%Video $6B30%Search $2B40%Mobile $14BTOTALS 39% Multiple sources
    • Augustine Fou- 22 - Ad Fraud Ranges • Display ad fraud fake ad impressions created by bots • Video ad fraud fake video ad views generated by bots • Mobile ad fraud fraudulent or accidental clicks • Search ad click fraud click fraud on search ads 30-70% 50-80% 20-40% $3-7B $1-2B $4-8B (U.S. Only) 30-50% $2-3B 50% 60% 30% 40% Range DollarsAverage
    • Augustine Fou- 23 - Cross-channel Cost Comparisons
    • Augustine Fou- 24 - Comparative Media Costs Cost per Thousand (CPM): Cost to reach 1,000 users or impressions Source: Morgan Stanley Research 2010 Broadcast TV $28 Radio $10 Magazines $16 Newspaper $16 Out of Home $5 Internet $3 Traditional vs digital media costs Traditional media CPM Digital media CPMs Comparing costs of various media Relative costs of media how do media costs compare media costs compared Understanding the Economics of Digital Compared to Traditional Advertising and Media Services Digital media compared to traditional advertising digital versus traditional marketing Augustine Fou- 24 -
    • Augustine Fou- 25 - Comparative Media Costs Cost per Thousand (CPM): Cost to reach 1,000 users or impressions $450 $250 $140 $30 $15 $7 $2 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 Direct Mail Mail Order Catalog Drive Time Radio Prime Time TV Online Video Ads Online Display Online Search pay for mailing costs Offline: w/o Unit Costs ONLINE: WINNER pay for media costs no mailing or media costs Offline: w/ Unit Costs Augustine Fou- 25 -
    • Augustine Fou- 26 - Dr. Augustine Fou – Digital Consigliere “I advise clients on optimizing advertising across all channels. One main area of focus is reducing ad waste due to fraud – fake impressions, clicks, leads, and sales.” FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM) MCKINSEY CONSULTANT CLIENT SIDE / AGENCY SIDE EXPERIENCE PROFESSOR AND COLUMNIST ENTREPRENEUR / SMALL BUSINESS OWNER PHD MATERIALS SCIENCE (MIT '95) AT AGE 23 @acfou ClickZ Articles: http://bit.ly/augustine-fou-clickz Slideshares: http://bit.ly/augustine-fou-slideshares LinkedIn: http://linkd.in/augustinefou
    • Augustine Fou- 27 - Related Articles Fake YouTube Videos By: Augustine Fou, December 2013 Motive and Opportunity for Ad Fraud By: Augustine Fou, February 2014 Fake Facebook Profiles By: Augustine Fou, Dec 2013 Fake Twitter Accounts By: Augustine Fou, August 2013 Display Fraud 101 (video) By: Augustine Fou, Feb 2014 Augustine Fou- 27 - ROI Case for Solving Ad Fraud By: Augustine Fou January 2014 Digital Ad Fraud Briefing By: Augustine Fou December 2013 How Display Fraud Works By: Augustine Fou, May 2013 How Click Fraud Works By: Augustine Fou, November 2013 The Magnitude of Digital Ad Fraud By: Augustine Fou, November 2013
    • Augustine Fou- 28 - APPENDIX
    • Augustine Fou- 29 - Digital Ads by Format Source: IAB, 1H 2013 Digital Advertising Report, Oct 2013
    • Augustine Fou- 30 - Pricing Model Trends Source: IAB, 1H 2013 Digital Advertising Report, Oct 2013