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A Rating & Review of Display Advertising: FRAUD ALERT
- 1. Search Advertising for SmallBusiness A Rating and Review for Display Advertising: FRAUD ALERT
- 2. WARNING:DISPLAY ADS AREPLAGUED BY RAMPANT CLICK AND VIEWABILITY FRAUD. LARGE PUBLISHERS AND AD AGENCIES ARE FULLY AWARE OF THIS FACT BUT DO VIRTUALLY NOTHING TO STOP THE PROBLEM WHILE ADVERTISERS PAY HEFTY FEES FOR WORTHLESS AD IMPRESSIONS. WHY? BECAUSE FRAUDULENT DISPLAY ADS GENERATE HUGE PROFITS FOR PUBLISHERS, AD AGENCIES, AND SALESPEOPLE AT THE EXPENSE OF UNSUSPECTING ADVERTISERS.
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- 4. Total Digital DisplayAd Spending (Billions of $)
- 5. Top Display AdNetworks by Reach
- 6. Computer Display AdSizes and Types
- 7. Ad Impression basedPricing Average Cost Per Thousand (CPM) Impressions are: $3 for Mobile Ads $24.60 for Video Ads $10.40 for Display Ads on Premium Sites $1.90 for Display Ads on General Sites $3.10 for a Single Above-the-Fold Ad
- 8. The Right AdServed at The Right Time Effective Display Advertising can: Generate immediate sales increases Build Brand Awareness Reach a Wide Audience with a Small Budget Target Specific Types of Consumers Be Easily Tracked and Monitored
- 9. Dayparting Geographic Behavioral Demographic Contextual Retargeting Targeting Consumers Wherever They Search Types of Digital Display Ad Targeting:
- 10.
- 11. Attitudes about RetargetedDigital Display Ads
- 12. Programmatic Digital DisplayAd Spending
- 13. What is OpenExchange Display Ad Delivery?
- 14. What is ProgrammaticDirect Display Advertising? Ads Purchased from Known Websites Contractual Guarantees for Ad Placement More efficient Means to Target Specific Consumers Average Cost: $9 - $16 per Thousand Impressions Private Marketplaces Provide Premium Ad Inventory Average cost: $12 to $21 per Thousand Impressions
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- 16. Top Rated ProgrammaticDisplay Ad Sellers
- 17. Breakdown of DisplayAd Fraud ONLY 13 MILLION IMPRESSIONS
- 18. Display Ad VisibilityConcerns
- 19. Ads Targeted toEvery Consumer on Every Device
- 20. Types of DisplayAd Fraud Load Pages on Fake Websites Type Search Queries and Click on Ads Generate Fake Pageviews which produce Impressions Impersonator Bots are used to: Perform Cookie Stuffing or Generate Fake Facebook Likes Complete Lead Forms with Real Addresses
- 21. Attack of theImpersonator Bots
- 22. Evidence of FraudulentDisplay Advertising
- 23. Evidence of FraudulentAdvertising
- 24. Display Ad FraudHappens Overnight
- 25. Display Ad FraudHappens on Saturdays
- 26. Average Digital DisplayAd Clickthrough Rates
- 27. Clickthrough Rates byDigital Display Ad Size
- 28. Display Ad ClickthroughRates by Industry
- 29. Impact of RichMedia on Clickthrough Rates
- 30. Odds of Clickingon a Display Ad
- 31. Why are ClickthroughRates So Low? 30 -75% Fraudulent, Not-in-View, or Adblocked Of All Display Ad Impressions: 20% from Networks are Fraudulent 40% of In-Banner Video Ad Plays are Fraudulent 30% of Online Bid Requests are Generated by Bots 2% of Publisher Direct Placements are Fraudulent
- 32. Loaded onWebsites that Human Do Not Visit Stacked on Top of Other Display Ads Placed on Webpages with Multiple Display Ads Blocked by AdBlocking Technologies Threats to Display Ad Viewability Viewability Drops when Display Ads are: Distributed to Masked Websites Used to Retarget Bots
- 33. Mobile Programmatic DisplayAd Spending
- 34. Mobile Ad SpendLeaders
- 35. Methods Used toShare Online Video Ads
- 36. Consumers Move fromDesktops to Mobile Devices
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- 38. Tablet Computer DigitalDisplay Ads
- 39. Clickthrough Rate byDevice & Online Environment
- 40. Mobile Display AdClickthrough Rates by Industry
- 41.
- 42. Estimated Video DisplayAd Revenue
- 43. Mobile Ad Spendingby Format
- 44. A Recent Studyof Online Consumers found: 82% want Video Ads Tailored to Them 28% want Video Ads Relevant to On-screen Content 19% want Video Ads Relevant to Their Viewing History 18% want Video Ads Related to Their Favorite Brands 58% Frequently watch Short Videos on Smartphones Consumer Attitudes Toward Video Display Ads 25% watch Less TV because They watch More Mobile Videos
- 45. Mobile Videos are: Likely to be 69% of the World’s Internet Traffic by 2018 Over 25% of all Online Videos Viewed Today On Track to reach 50% of all Online Videos Viewed by 2016 75% of the Online Videos watched by Online Consumers Converging with TV ads Video To Go
- 46. Video Display AdUsage
- 47. Online Video DisplayAdvertising Video Ad Impressions are: Fraudulent or Not-in-View 50 – 77% of the time Often Loaded by Advanced Bots to Generate Views Almost 10 Times Costlier than Static Display Ads Clicked on 27 times More Often than Banner Ads Generated by Bots as Wasteful Autoplays Often Fraudulent in Higher CPM Campaigns
- 48. Display Ads Moveto Smartphones
- 49. Mobile Display AdClickthrough Rates 1.4% 4.5%
- 50. How and WhenVideo Ads Get Seen
- 51. Consumers Do NOTTrust Display Ads
- 52. Display Ad ConsumersHate Most
- 53. What Consumers Wantfrom Digital Display Ads
- 54. Consumer Attitudes aboutClicking on Display Ads
- 55. Prevalence of DisplayAd Fraud
- 56. Half ofMobile Human Display Ad Clicks are Accidental Consumers See 1700 Digital Display Ads per Month 8% of Internet Users Account for 85% of Clicks 52% of Third Party Display Ad Traffic Comes from Bots Display Ads Do Not Work as Advertised Evidence of Non-productivity: Most Consumers Do Not Remember Display Ads Many Consumers are Willing to Pay to Skip Ads
- 57. The Real Costof Display Ad Fraud
- 58. The Great DisplayAd Heist
- 59. Display Ad Review DisplayAds are: An Affordable & Scalable way to Target Consumers A Means of Capturing Desktop & Mobile Shoppers Generally Sold per Thousand Impressions Incorporating More Video Content Plagued by Rampant Fraud Annoying and Forgettable to Many Consumers Grossly Over-Priced for What They Deliver
- 60.
- 61. For More InformationVisit Us At: http://digimechanix.com
Editor's Notes
- #3 DISPLAY ADS ARE PLAGUED BY RAMPANT CLICK AND VIEWABILITY FRAUD. LARGE PUBLISHERS AND AD AGENCIES ARE FULLY AWARE OF THIS FACT BUT DO VIRTUALLY NOTHING TO STOP THE PROBLEM WHILE ADVERTISERS PAY HEFTY FEES FOR WORTHLESS AD IMPRESSIONS. WHY? BECAUSE FRAUDULENT DISPLAY ADS GENERATE HUGE PROFITS FOR PUBLISHERS, AD AGENCIES, AND SALESPEOPLE AT THE EXPENSE OF UNSUSPECTING ADVERTISERS.
- #4 Display advertising is the use of the internet as an advertising medium where promotional messages appear on websites and/or search engine results pages. Targeted display ads can provide advertisers an affordable and scalable means of accessing the market segment they want to reach. On the other hand, Randomly distributed display ads are wasteful and ineffective.
- #5 It is estimated that total spending in the US on display ads will top $58 billion this year and increase to more than $67 billion next year. In addition, spending on mobile display advertising will surpass desktop display ad spending for the first time next year. Spending on mobile display advertising will grow by double digits at least until 2019 while spending on desktop display advertising will plateau at around $25 billion from 2017 through 2019.
- #6 AddThis is the top ranked display advertising network reaching 96.3% of U.S. online audiences. Google is ranked third reaching 83.3%, Yahoo! Sites are ranked fifth reaching 72.4%, and Facebook is ranked eighth reaching 57.3% of the U.S. online audience respectively
- #7 Display ad inventory on desktop computers comes in various sizes and positions on webpages. While many of these ads occupy static positions on many webpages, advertisers have also resorted to using pop-up and pop-under ads to catch consumers’ attention.
- #8 Most display ads are sold by the cost per thousand impressions or CPM. Static banner ads on general websites costs an average of $1.90 per thousand impressions. Mobile display ads and single above the fold ads both have an average CPM around $3 compared to an average CPM of $10.40 for display ads on premium websites. The average CPM for video display ads is around $25.
- #9 Effective Display Advertising can: -generate immediate sales increases -Build brand awareness -Reach a wide audience with a small budget -Target specific types of consumers -Be easily tracked and monitored
- #10 The most popular types of targeting used by Display Advertisers are: -Dayparting –showing ads to consumers during a certain time of day -Geographic –displaying ads to consumers within a specific geographic area -Behavioral –showing ads to consumers whose online behavior qualify them for inclusion in a specific market segment -Demographic – displaying ads to consumers who physical or personal characteristics, e.g. age and race, qualify them for inclusion in a specific market segment Contextual –showing ads to consumers based on the content of the website they are visiting Retargeting –displaying ads to consumers who have previously visited your website while they are visiting other websites Retargeting is quickly becoming the most prominent form of targeting used by Display Advertisers.
- #11 From the advertiser’s perspective it works like this: Internet users are prime targets for advertisers.. When an internet user visits your website a cookie is associated with his/her computer. When the he/she leaves your website and visits other sites that show display ads the cookie associated with the computer is detected and the retargeting ad is displayed. In essence, the retargeting ads follow the computer and therefore, the internet user in this way. The retargeting ad is intended to capture the internet user’s interest. And, of course, the ultimate goal is to convert the internet user into a loyal customers in this manner. Unfortunately most consumers end up seeing the same displays over and over again whether they want to see them or not because of retargeting.
- #12 Many online consumers are put off by retargeted display ads. 34% of online consumers reported feeling annoyed by retargeted ads that they saw 4 to 5 times, more than 30% of online consumers who saw retargeted ads more than 10 times reported feeling angry, and almost 20% of online consumers who saw retargeted ads 4 to 5 times found them intrusive.
- #13 In the past, display ads were bought and sold through direct transactions between business people. However today programmatic or automated display ad spending is about $15 billion, roughly 55% of total display ad spending. This trend is expected to increase to over $20 billion or approximately 63% of total display ad spending next year.
- #14 In programmatic Open Exchange buying Computer algorithms are used to place ad inventory on websites. Anyone can purchase inventory in this real-time bidding auction. In this case there is no direct relationship between the publisher and the advertiser since transactions are performed electronically. In this system advertisers do not know the actual websites where their ads appear either. They only know the general content category that the website falls in. Advertisers pay $5 - $9 per thousand impressions for this service
- #15 Programmatic Direct display ad buying is an automated service that does not include an ad auction. Advertisers buy ad space directly from websites they know through contractual guarantees in an automated system called programmatic guaranteed or reserved buying. This provides them with guarantees about where ads will be placed and a greater ability to target specific types of consumers. Of course, Programmatic Direct ad buys are more expensive for advertisers – generally $9 - $16 dollars per thousand impressions. In other instances, One or more publishers extend exclusive invitations to advertisers to purchase display ad inventory directly from websites they know in Private Marketplaces. Generally, advertisers pay $12 to $21 per thousand impressions for this premium service.
- #16 This year over 70% of purchases of display ads will involve the use of some type of software application to complete the transaction while only 30% will involve solely human negotiations between buyers and sellers. By 2017 80% of display ad buys will be automated transactions. Purchases and placements of display ads on webpages are made every second of every day at light speed. This method saves ad buyers and sellers time and money but also creates a perfect environment for fraud.
- #17 A recent analysis of Display Ad fraud found that the Google AdExchange, OpenX and Rubicon were the top Programmatic Display Ad Sellers. However this same analysis gave critically low appraisals of Yahoo!, Aol, and Millenial Media because they all distributed a comparatively high ratio of fraudulent traffic, masked domains, and relationships with long-tail sites with low quality Display Ad inventory.
- #18 When one accounts for bot impressions, impressions not-in-view and not on target, and those that are blocked by adblocking software only about 13 million Of every 100 million programmatic display ad impressions are viewable to humans . Furthermore, This means that for every thousand impressions only 130 of them are free of bots, in view, targeting the right consumer, not blocked by the user and viewable to real human beings.
- #19 In addition, when we look at programmatic display ads that are viewable, appropriately targeted and not blocked by adblocking software only about 6 percent of them are actually seen by a human being. This means that only 60 impressions out of every one thousand sold actually get seen by a real human targeted consumer.
- #20 The goal of programmatic display ad delivery is to use artificial intelligence and consumer data to bid on ad space on websites in real-time for the chance to show one specific ad to one anonymous consumer in one online context and on one device. The system is awesome when it works. Unfortunately, more times than not display ads are being shown to and clicked on by Impersonator Bots not real human consumers.
- #21 Impersonator bots are used to: -generate fake pageviews which produce impressions -type search queries and click on ads -complete lead forms with real addresses -perform cookie stuffing or generate fake Facebook likes -load pages on fake websites
- #22 22% of all Bot traffic are Impersonator Bots right now but their popularity is steadily increasing. Criminals use Impersonator Bots so frequently because they can generate the type of cheap and profitable traffic that display ad publishers want. Undoubtedly the next frontier for these cyber drones to conquer is mobile advertising.
- #23 A recent study found that Bot traffic in programmatic display ad inventory averaged 17% Bots consumed 19 % of retargeted ads Third party sourcing of display ad inventory resulted in 52% bot fraud Finance, family and food websites showed increased bot traffic ranging from 16 to 22 percent
- #24 Bots accounted for 11 percent of all display ad impressions Bots accounted for 23% of all video impressions Approximately half of bots observed occurred at night
- #25 In fact, fraudulent display ad clicks, impressions, pageviews, and Facebook likes are more likely to occur well after normal business hours. Bot traffic is far more prevalent between the hours of midnight and 6am and during Holidays.
- #26 Each of the vertical lines on this chart represents bot activity on Saturday during a typical three month period. Saturday afternoon bot traffic is sometimes 4-800 times the normal hourly human traffic on weekdays causing fraudulent pageviews, clicks, impressions, and Facebook likes to surge dramatically.
- #27 Despite the billions of dollars invested in display ads the Average Display Ad clickthrough rate peaked in January 2014 at about .26%, was at its lowest in January 2011 at about .09%, and today stands at approximately .15%. While Average clickthrough rates are on an upswing, the chances of an advertiser actually connecting with a consumer through a display ad are really low.
- #28 Generally large rectangle and half page display ads get the best clickthrough results for both video and non-video digital display ads. Placement on the webpage does effect clickthrough rate. For instance, display ads placed above the fold tend to generate significantly higher clickthrough rates.
- #29 Overall, the Food and Beverage industry enjoys the highest average display ad clickthrough rate at .29% followed by Computers and Electronics at .21%. By Comparison the average clickthrough rate for Home and Garden display ads was .14% and only .12% for Automotive display ads.
- #30 Adding Rich media elements such as video, applets that interact instantly with the user, and ads that change when the user’s mouse passes over – to display ads can increase clickthrough rates by 350% on automotive and education ads, 290% on technology ads, and 260% on travel and Consumer Packaged Goods ads. On the other hand, Static banner ads are steadily losing their effectiveness with online consumers.
- #31 Despite these facts, statistically A typical consumer is more likely to complete navy seal training, climb Mount Everest, get a Full House in poker, give birth to twins, or survive a plane crash than he/she is to click on a display ad. So the odds of having someone click on any display at any time are really slim.
- #32 Of all programmatic desktop display ad impressions: -30 – 75% are fraudulent, not-in-view or adblocked -20% from display ad networks are fraudulent -40% of in-banner video ad plays are fraudulent -30% of online bid requests are generated by bots -On the other hand, only 2 percent of publisher direct placements are fraudulent again highlighting the problem with programmatic display ad delivery`
- #33 Viewability suffers when display ads are: -Loaded on websites that Humans do not visit -placed on webpages with multiple display ads -blocked by adblocking technologies AdBlocking is growing at a rate of 43% a year and it is estimated that 100% of web surfers could have some sort of ad blocking software installed by 2018. -Distributed to Masked websites that may be fraudulent -Used to Retarget Bots -stacked on top of other display ads where they can only be viewed by bots
- #34 Perhaps Programmatic Display Ad distribution is the single biggest stimulus for fraudulent advertising. It is predicted that this type of mobile advertising will grow from $8.4 billion this year to almost $14 billion in 2016 while desktop/laptop spending will remain steady at about $6.5 billion. In this form of advertising ad units are sold on an impression basis via automated systems and computer algorithms. It is also expected that fraudulent mobile display ad impressions will increase proportionately because that’s where the dollars are moving.
- #35 Facebook leads its competitors with about $5 billion in display ad sales this year. This is expected to grow to almost $8 billion by 2017. Google is second with $1.5 billion in mobile ad revenue, and Twitter is third with about $1.1 billion. It is estimated that both firms will trail Facebook by 2017 with about $2 billion each in mobile ad revenue. It is estimated that LinkedIn will experience 3500% growth in mobile ad revenue during this same period.
- #36 Right now over 72% of all shared online video ads are shared through Facebook while 7.4% are shared through Twitter and only about 1.5% are shared through Google.
- #37 This year for the first time the percentage of online consumers who use their mobile devices exclusively to search and shop surpassed the percentage of online consumers who use their desktop computers for the same purposes. This is just the beginning of mobile advertising’s dominance over other platforms.
- #38 On cellphones Display ads generally fall into four categories – SMS Ads, Search Ads, Web Display Ads, and App display ads.
- #39 Display ad inventory for tablets is similar to desktop ad inventory but with a lot less variety. Generally, leaderboard, full banner, skyscraper and square ads are prominently used on tablets. Tablet pop-up ads are also gaining popularity. In addition, it is important to note that usage of tablets has grown more than 52% faster than usage of desktop computers ever did.
- #40 The device that a consumer uses to view a display ad has a considerable effect on average clickthrough rates. Display ads on tablets attract 44% higher average clickthrough rates than those on smartphones while ads on mobile apps perform more than twice as well as those on the mobile web.
- #41 Mobile display advertisers in the Travel and Entertainment industry distribute 8% of total display impressions and enjoy a .8% average clickthrough rate. The Automotive industry shows similar results distributing 6% of total display impressions and generating a .52% average clickthrough rate. On the other hand, the Retail industry distributes a wopping 38% of total display impressions to generate an average clickthrough rate of .54%. This data shows that display ads perform far better for Travel and Entertainment and Automotive advertisers than they do for advertisers from the Retail industry.
- #42 The popularity of video display ads is growing dramatically. 100 million internet users watch online video everyday. And it is estimated that 69% of all online traffic will be mobile video by 2018.
- #43 Growth in video display ad revenue has been steady for desktop computers but it has been meteoric for mobile devices. Desktop Video ad revenue is expected to grow 16% this year. At the same time Mobile Video ad revenue is expected to grow 70% this year.
- #44 At the same time Spending on mobile search ads has plateaued at about 50% of all spending on mobile advertising. In addition, spending on static banners and rich media has also apparently plateaued at around 36% of all mobile ad spending. Meanwhile spending on text advertising will fall dramatically from around 20% in 2011 to around 5% this year. The big news is that spending on mobile video ads will nearly double from 4.7% in 2011 to 9% this year.
- #45 A recent study of online consumers’ attitudes towards video ads found that: -82% want video ads tailored to them -58% frequently watch short videos on smartphones -28% want video ads relevant to on-screen content -19% want video ads relevant to their viewing history 18% want video ads related to their favorite brands -25% watch less tv because they watch more mobile videos
- #46 Mobile Video are: Over 25% of all Online Videos Viewed Today On Track to reach 50% of all Online Videos Viewed by 2016 Likely to be 69% of the World’s Internet Traffic by 2018 75% if the online videos watched by Online Consumers Converging with TV Ads; 66% of video viewers often or sometimes see previously viewed TV ads on their smartphones
- #47 This graph shows the percentage of video ad views compared to all online video views. In January 2012 around 12% of all videos viewed were ads, by January 2013 it had jumped to approximately 20% and surged to 38% of all video views in March of last year. The trend will continue upward with no apparent end in sight.
- #48 Video Ad Impressions are: -clicked on 27 times more often than banner ads -Almost 10 times costlier than static display ads -often loaded by advanced bots to generate views -Fraudulent or not-in-view 50 – 77% of the time -Generated by Bots as wasteful autoplays -often fraudulent in higher cpm campaigns
- #49 When it comes to mobile video advertising, Smartphones are apparently the device of choice for advertisers. Since last year smartphone display ad spending is up 20%, smartphone impressions are up 12%, smartphone clicks are up 10%, and smartphone conversions are up almost 11%. In comparison, spending on desktop display ads is down 15%, desktop impressions are down 14%, desktop clicks are down 10%, and desktop conversions are down almost 16%
- #50 As the chart shows, while still low, video display ads have an astronomical average clickthrough rate of 11.8% compared to Native ads - display ads that are placed in the flow of editorial or text content has a 1.4% average clickthrough rate.
- #51 Video display ads obviously get consumers’ attention. In a recent study 44% saw video ads before, during or after another video that they watched, 34% viewed video ads with the “Sponsored by” tag on the ad, and 26% viewed a video ad that was overlaid on another ad. This indicates that online consumer will voluntarily watch video ads as long as they are relevant and placed appropriately on the webpage.
- #52 Despite these facts, another survey of consumers around the world found that online video and display ads were perceived as the least trustworthy forms of advertising. 71% reported not trusting text adds on mobile phones and 67% reported that they did not trust online banner ads.
- #53 Online consumers consistently report their distaste for display ads. Irrelevant pop-up ads and lottery scams were the least liked display ads with 70% of respondents reporting their dislike. In addition, 64% of respondents reported their dislike of male enhancement ads.
- #54 A 2012 study found that if consumers had to see mobile ads: -68% did not want ads to interrupt their use of an app -59% want a reward in exchange for interacting with an ad and -49% want ads that are relevant to their general interests -
- #55 In addition 50% of consumers are OK with clicking on mobile ads if they can access free content 36% are more likely to click on ads that do not require them to go to another website around 20% reported that they are more likely to click on text ads or multimedia ads
- #56 Unfortunately, when it comes mobile display ads fraud infects 23% of video ads -19% of retargeted ads -17% of programmatic display ads And -11% of static display ads
- #57 Overall, Display ads do not work well because: -consumers see about 1700 display ads per month -most consumers do not remember display ads that they have seen -half of mobile display ad clicks executed by humans are accidental 8% of internet users account for 85% of all display ad clicks -52% of third party display ad traffic comes from bots and -many consumers are willing to pay to skip display ads
- #58 It is estimated that losses to fake ad impressions, fraudulent video ad views, accidental clicks, and search ad fraud will be approximately $15 billion in the U.S. this year.
- #59 Surprisingly, Governments and law enforcement agencies ignore display ad fraud even though Globally advertisers will lose $67 billion this year. By comparison $32 billion was lost to credit card fraud last year yet it gets the lion’s share of the media’s and law enforcement’s attention. Even bank robberies with associated losses of a miniscule $30 million gets more attention than display ad fraud. That’s why display ad fraud is virtually a risk-free pursuit for criminals and marketing profiteers.
- #60 In summary, display ads are: -An affordable and scalabe way to target customers -a means of capturing desktop and mobile shoppers -generally sold per thousand impressions via automated systems -incorporating more video content -plagued by rampant fraud -annoying and forgettable to many consumers -grossly over-priced for what they deliver
- #61 A rating of one and a half stars out of a possible five stars is earned and deserved by the display advertising industry considering the current lack of fraud prevention, ad viewability, and cost-effectiveness for advertisers.