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The Annoying Consequences of an Awesome System

  |  October 4, 2013   |  Comments

Sure, bots and fraud are problems in the online advertising space. Would we rather return to the archaic Nielsen panel monitoring of old?

robotsTechnology is a wonderful thing. When used properly, it can make our lives easier by automating mundane processes, tracking important data, and intelligently matching those who want with those who have.

Unfortunately, it also makes things easier for unethical, greedy scammers to ply their trade. In particular, the use of bots—bits of software that run automated tasks at high volumes—has found root in nearly every online scenario you can think of. Videogamers use bots to unfairly level up their characters in online roleplaying games. Companies buy fake Twitter followers. Scalpers use bots to snatch up concert tickets. Bots are behind many types of click fraud, spam, DOS attacks and much more.

And, yes, the advertising industry has a problem with bots creating suspect inventory. But the size of this problem in the online advertising space is small compared to the opportunity, particularly in the video advertising space.

The Awesome

Advertisers today have a far better understanding of the who, what, where, why and how behind their ad budget decisions when buying online and mobile ads. They can research spending and targeting decisions based on readily available data, analyze the performance of their ad campaigns, and make adjustments in real time to maximize their efficiency.

Look at the tools available today. Advertisers can target their intended audience by age, gender, location, time of day, device, and more.

Furthermore, ads can be targeted by direct viewer action: search terms, contextual targeting tools, Facebook likes, even content preference (like music streamed or videos watched). And those are just the targeting benefits; from a cost perspective, real time bidding and programmatic buying allows for greater efficiencies in planning an ad budget.

Given all the options now available to advertisers in terms of device, content, location, and timing, ad exchanges and real-time auctions helps tame this fragmentation with a level of control only dreamt about just five years ago.

More Awesome

Now consider the level of transparency provided to track the effectiveness of these tools. No longer must advertisers roll the dice on blind buys. Today, they know exactly where their ad is going, how it appears, and how it’s being seen. View-through-rates (VTR) and view completion rates are standard metrics. Viewability metrics, to govern whether a purchased ad can even be seen, are now easily monitored and give advertisers more power in holding publishers accountable. Roll in more common metrics like click-through-rates, gross ratings points, targeted rating points, and brand lift and you can see it’s far easier today to measure a meaningful ROI than when we relied on the archaic Nielsen panel monitoring of old.

Finally, there’s the flexibility online advertising offers, both in terms of format and device. From a format perspective, there’s pre-roll video, banner ads, graphic ads, text ads, video ads, and even interactive ads. Looking at devices, there’s the Web, mobile, tablet, Connect TV and more.

At the end of the day, online and mobile video ads are far superior to the more expensive video ads in many ways. For starters, online viewers are more open to advertising in return for free content (compared to TV viewers, who are increasingly fast-forwarding through ads on their DVR). According to this Nielsen/IAB study, streaming video viewers watch ads for 20 seconds, with an average completion rate of 87%. According to the same report, the online/mobile streaming video audience is both highly valued (mostly the coveted 18-34 year old demographic) and hard to reach (the lightest TV viewers are the heaviest online streaming viewers). Meanwhile, the cost for advertising online and via mobile is less than TV, despite having a largely equal potential reach.

Taken together, it seems almost laughable that advertisers once made decisions based on the questionable ratings metrics and shot-in-the-dark engagement stats that define the traditional TV space. If the price for all advantages and tools available to online and mobile advertisers is the relatively minor annoyance of a few bot scammers, I’ll take it.

The Consequence: Can We Handle It?

Online advertising, video in particular, is flat out the safest bet advertisers have had available to them to date. Is there some fraud? Yes. Are there bad apples taking advantage of this emerging system for their own benefits? Sure.

The way to deal with this is to go after the offenders and keep implementing security measures to block their future attempts. But these instances should not result in an indictment against the entire system.

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ABOUT THE AUTHOR

Frank Sinton

Frank Sinton is the CEO of Beachfront Media, a video solutions platform for publishers, advertisers, and enterprises. Previously, he worked for Sony Pictures Entertainment as Executive Director of Architecture. Beachfront Media is the everywhere video company that provides solutions for video discovery, video syndication, and video app development for managing and monetizing video applications across screens and devices. For More information, please visit www.beachfrontmedia.com.

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