Digital Ad Waste Estimates by Augustine Fou Advanced Technical Forensics


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Digital ad waste is calculated via several methods and all of these methods arrive at a 20% or less "maximum possible effectiveness." If ads are not viewable, if impressions are generated by bots, if ads are not targeted properly, and if users are using adblock, then the ads won't lead to paying customers.

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Digital Ad Waste Estimates by Augustine Fou Advanced Technical Forensics

  1. 1. Digital Ad Waste Sizing / Estimates Dr. Augustine Fou acfou @mktsci .com January 2014 -1- Augustine Fou
  2. 2. UPDATE: January 2014 Display Ad Maximum Possible Effectiveness Human (not bot) (Solve Media) Viewable (comScore) 71% 46% x x Not AdBlocked (PageFair) 77% 25% Source: Augustine Fou, Display Ad Effectivess 25% of ads are human/viewable/not-blocked Other 75% wasted x $7.7B Ad Spend $5.8B IAB: 21% of $36.6B FY 2012 -2- Augustine Fou
  3. 3. Inefficiencies of Exchange Traded Media Source: Attribution101, Jan 2014 Only 19% of ad impressionsserved meet media plan objectives -3- Augustine Fou
  4. 4. Forms of Ad Waste Source: Ted McConnell, Brand Innovators Summit 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 – SWAG 20% Video: Autoplay, Sound off, Below the fold – TubeMogul Net using average values and statistical overlap: -4- 87% wasted Augustine Fou
  5. 5. Search Ad MPE Search Ad Maximum Possible Effectiveness Non-Click Fraud (Adometry) Global CTR (Kenshoo) 83% 1.7% x 1.4% Since advertisers only pay for the clicks, this is already highly cost effective. But the next area of focus should be the quality of the click – what users do after they click through to site. Counting clicks perpetuates click fraud. -5- Augustine Fou
  6. 6. Digital Ad Fraud Backgrounder -6- Augustine Fou
  7. 7. Types of Ad Fraud Impressions Clicks Leads Sales (CPM fraud) (CPC fraud) (CPL fraud) (CPA fraud) Bot or low wage workers fill in lead forms with real addresses and get paid bounty per lead. Fake sites set up to do cookie stuffing or trick users to click on affiliate links to earn rev share. Botnets generate fake pageviews which produce ad impression “inventory” that is sold into ad exchanges. -7- Bots type search queries to bring up search ads and then click on the ads. Augustine Fou
  8. 8. Display (CPM) Fraud Display Ads Video Ads 480 billion 20.1 billion display ad impressions /mo video ad impressions /mo 29% 40% Source: Solve Media 2013 Source: Vindico, 2013 confirmed bot traffic $1 - $3.50 ~$10 cost per thousand cost per thousand $2-6 billion $1 billion wasted ad spend (annualized) -8- estimated fake views wasted ad spend (annualized) Augustine Fou
  9. 9. How Display Fraud Works http://modernbab http://interiorcom Bots load page repeatedly to generate ad impressions -9- Augustine Fou
  10. 10. Click (CPC) Fraud 22.3% of search ad spend ($16.8B in 2012) $4B wasted Source: ClickForensics 2006 - 2010 - 10 - Source: IAB 2012 Annual Report Augustine Fou
  11. 11. How Search Click Fraud Works “vacuum cleaner” keyword Walmart search ad Bot clicks through to - 11 - Augustine Fou
  12. 12. Related Articles Digital Ad Fraud Briefing By: Augustine Fou December 2013 Video Ad Fraud Investigation, Part 1 By: Augustine Fou, October 2013 Ad Fraud Fighting Techniques By: Augustine Fou October 2013 Fake YouTube Videos By: Augustine Fou, December 2013 How Display Fraud Works By: Augustine Fou, May 2013 Fake Linkedin Profiles By: Augustine Fou, December 2013 How Click Fraud Works By: Augustine Fou, November 2013 Fake Facebook Profiles By: Augustine Fou, Dec 2013 The Magnitude of Digital Ad Fraud By: Augustine Fou, November 2013 Fake Twitter Accounts By: Augustine Fou, August 2013 - 12 - Augustine Fou
  13. 13. 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 ClickZ Articles: Slideshares: LinkedIn: - 13 - @acfou Augustine Fou
  14. 14. APPENDIX - 14 - Augustine Fou
  15. 15. IAB Full Year 2012 Source: IAB 2012 Annual Report - 15 - Augustine Fou
  16. 16. 5% Ad Impressions Properly Targeted Source: Nielsen, October 2011 - 16 - Augustine Fou