Advertisers today operate in a cross-channel, consumer-driven media landscape that forces them to constantly adapt. Brands around the world are spending more than ever on digital advertising, but there are growing concerns about what they are getting in return.
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How Digital Ad Spend is Wasted
1. ?
55% 50% 39%
2016
2015
How
will top $186B
in 2016
will surpass TV ad spend
by 2018
will account for 45% of all
ad spending by 2020
Advertisers today operate in a cross-channel,
consumer-driven media landscape that forces them to
constantly adapt. Brands around the world are spending
more than ever on digital advertising, but there are growing
concerns about what they are getting in return.
Google found more than 56% of ad impressions are never seen by con-
sumers even though the average viewability rate is 50%.
A key source of waste is ad fraud, which drastically impacts viewability.
Above all, marketers are wasting ad dollars by sending the wrong
messages to the wrong people at wrong times, and as a consequence,
consumers are tuning out or blocking ads. There are several reasons
marketers struggle with relevancy:
Poor user experiences and concerns
over data usage have contributed to
lower viewability thresholds and
the rise of ad-blocking.
Serving one or multiple ads in
a tiny 1x1 pixel frame.
A software application that
automates ad clicks to fake
human traffic.
Placing multiple ads on top of
each other in a single ad slot.
Active installs of ad-blocking software
38% of internet users worldwide
blocked an ad in Q4 of 2015,
up from 28% in Q3.
Why do people block ads?
there are too many ads being shown the same ad too much
GLOBAL
DIGITALAD
SPENDING
WHYAREDIGITALDOLLARSGOINGDOWNTHEDRAIN?
ADFRAUD
PIXELSTUFFING ADSTACKING
VIDEOFRAUD BOTS
Video ads are played in the
background, in banner ads
or played simultaneously
with other ads.
LACKOFCONTEXTANDRELEVANCY
ADBLOCKING
Globally, advertisers will lose $7.2B to bot fraud in
2016, up from $6.3B in 2015.
Programmatic contributes to the
problem, attracting 73% more bots
worldwide than direct buys.
Globally, the average
advertiser is spending $10M on
ads that no consumer ever saw.
For some brands, this number
reached $42M.
2010
21M
2011
30M
2012
39M
2013
54M
2014
121M
2015
181M
59%
52%
56%
54%
59%
56%
US
UK
AU
They do not have a single view of the customer:
Just 6% of global marketers say they have attained the single view of the
customer that is necessary to provide relevant, seamless experiences.
They cannot recognize their customers across devices and channels:
Consumers own, on average, 7.2 Internet connected devices.
They retarget ads ineffectively:
Far too often, marketers use unreliable cookies and stale data to retarget ads
that are actually irrelevant.
They struggle to control the reach and frequency of ads due to
fragmented technologies:
Lack of insight into how ads actually perform hinders optimization.
Their technology does not allow them to engage with customers
and optimize their campaigns in real time:
They need to be able to systematically collect and connect customer data
across channels.
This contributes to wasted ad spend because customers want
personalized messaging and seamless experiences across channels.
47%
44%
US
UK
47% of U.S. and 44% of U.K. consumers ignored future
communications from companies that sent them irrelevant
information or product recommendations.
Lack of relevance contributes to the ad blocking
problem and hurts ROAS.
Marketers must address the issue of ad waste on multiple fronts
which include:
Above all, marketers must adopt a new approach for
advertising that leverages higher quality data for
addressable, personalized advertising.
This will help increase the precision and efficiency of
their targeting, as well as the impact of each ad on the
individual consumer.
55% of U.S. consumers
believe personalized
content saves time and
attention from browsing
irrelevant content.
Do not leverage first-party data
Use generic consumer segments
rather than robust profiles
Rely on inferred behavior data
Take a spray and pray approach to
digital media
Personalizing ads
based on the consumer’s
purchase history results
in a 50% lift in brand
favorability.
Personalizing ads
based on the consumer’s
purchase history results
in a 39% lift in purchase
intent.
As a result,
the average global click-through
rate on display ads is just 0.17%.
This translates to fewer than two clicks
per 1000 impressions.
Viewability is negatively impacted by advertising strategies that:
OVERCOMINGTHEADWASTECHALLENGE
People-based targeting
Using first-party data to
enable one-to-one
cross-channel engagement
Better reach and
frequency measurement
Participation in cross-industry
collaborative efforts
to stop ad fraud
Sources:
http://www.tubefilter.com/2015/12/07/digital-advertising-will-take-over-tv-ad-spend-globally-by-2017-in-the-u-s-by-2016/
http://www.emarketer.com/Article/Worldwide-Ad-Spending-Growth-Revised-Downward/1013858
https://think.storage.googleapis.com/docs/the-importance-of-being-seen_study.pdf
https://www.marketingweek.com/2016/01/26/ad-fraud-the-marketing-industrys-7-2bn-problem/
http://na2.totalaccess.emarketer.com/Reports/Viewer.aspx?R=2001738&dsNav=Ro:-1,N:1305-499
http://www.signal.co/resources/signal-global-special-report-solving-identity-puzzle/
http://www.cmo.com/articles/2016/3/17/adi-device-data-highlights-marketers-difficulty-assembling-holistic-experiences-.html
http://www.ipglab.com/wp-content/uploads/2015/04/Going-Deeper-Booklet_Web-2.pdf
http://venturebeat.com/2015/07/14/consumers-want-privacy-yet-demand-personalization/
http://www.smartinsights.com/internet-advertising/internet-advertising-analytics/display-advertising-clickthrough-rates/
https://www.marketingweek.com/2016/01/26/ad-fraud-the-marketing-industrys-7-2bn-problem/
38%28%
Q3 Q4
*All dollar amounts in USD