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THE PROBLEM WITH ON-LINE ADVERTISING VIEWERSHIP
WHY OUTDOOR ADVERTISING IS: The Anti-Bot Device
Advertisers will lose $7.2 billion to fraudulent online advertising this year. Media buyers, media sellers, and advertisers are well aware of the bot problem that has plagued online advertising for years. Bots generate fraudulent ad views, driving up the price advertisers have to pay for campaigns. Further, the advertiser misses out on reaching actual users who might buy their product.
The problem has been ongoing for years, and the bot problem is getting worse by the day. That’s according to a new study from the Association of National Advertisers and online fraud prevention company White Ops, which finds that losses to fraudulent ad impressions will rise by nearly $1 billion this year.
Last year advertisers lost $6.3 billion to bots. This year that will jump to $7.2 billion, reflecting an estimated 15 percent growth in digital advertising that will correlate to greater levels of fraud. The study predicts the rate of fraud will not decrease for the immediate future, noting that there have been no successful wide-ranging bot-blocking initiatives. Perhaps most worrisome, bots are getting smarter every day.
“Bots spoofed viewability, showing nearly the same viewable rates as humans. Bots fooled list-based prevention technologies in programmatic buys,” the report says. The study finds the higher the CPM, the more vulnerable the advertiser is to fraud. There’s more incentive for bot operators to commit fraud with higher-priced ads, because they generate a larger return. Display ads with CPMs above $10 had a 39 percent higher bot rate than lower-CPM media, according to the study, while video ads with CPMs of $15 or above had a 173 percent higher bot rate.
The overall picture is of an industry that’s unable to harness this huge problem, and that is of great concern to media buyers, whose clients are becoming increasingly wary of online’s fraud issues.
“When you’re talking about a programmatically led business involving computers talking to computers, there will always be an opportunity for hacking and fraud. We will get better and faster at detecting fraud, but I think some fraud will always occur,” says Barry Lowenthal of the Media Kitchen.
Online advertising is here to stay, but these viewership issues are why OOH is the perfect complement to any media plan that includes online:
100% of OOH viewership is human
OOH is always on
OOH can’t be delayed, skipped or turned off
OOH reaches 99% of US adults 18-64 on a weekly basis, more than any other medium
OOH reaches 32% of US adults 18-64 in the key hour leading to mobile search activity, outperforming TV, radio and newspaper
OOH offers the greatest efficiency in driving online engagement per ad dollar spent in comparison to TV, radio, newspaper and magazine
Source: Media Life Magazine, USA Touchpoints/RealityMine, Arbitron
Tech Companies Go Old School With Billboards To Promote Themselves
Silicon Valley's going old school.
Tech companies like Facebook (FB) and Alphabet's (GOOGL) Google vacuum up billions of dollars in online advertising. But they're also pouring their own marketing dollars into billboards and other forms of outdoor signage. That's driving growth in one of the oldest forms of marketing. It's also one reason why the category is the only traditional channel expected to grow this year.
Facebook recently ran an outdoor campaign to promote its new approach to user safety and privacy. Music-streaming pioneer Spotify Technology (SPOT) teamed up with the Brooklyn Museum to honor music icon David Bowie and promote the free version of the company's app in subway advertising. And semiconductor maker Intel (INTC) hyped its artificial-intelligence technology that's used to help find criminals in a crowd.
"Tech companies have become massive spenders of outdoor advertising but in specific ways," said Vincent Letang, executive vice president of global market intelligence at research firm Magna. "Bus stops, train stations and airports are good places for these companies to reach an active workforce and to generate social buzz."
Tech Companies Make Big Spenders
Apple (AAPL), Google and Amazon.com (AMZN) ranked among the top six spenders on out-of-home advertising last year, and Netflix(NFLX) made it into the top 15, according to the Outdoor Advertising Association of America. The category includes traditional roadside billboards. There's also digital signs at bus stops and train stations, and signs mounted in stadiums and arenas.
Revenue from out-of-home advertising is forecast to expand 2% this year to $8 billion. That makes for a 1% gain in 2017, Magna said in a June report.
The ads have come a long way since the hand-painted billboards of the 1900s. Today, digital displays can rotate images every 10 seconds or so, providing wider exposure to a broader range of products. They're still one of the most cost-effective ways to reach consumers, said James Goss, analyst at Barrington Research Associates.
"A billboard is a display that is difficult to ignore," he said.
Gold Award For Billboards
The number of social-media shares for the Bowie campaign left Alex Bodman, Spotify's global executive creative director, stunned. The campaign in June won a gold award in the Cannes Outdoor Lions category. That celebrates creative outdoor campaigns featuring partnerships, people and storytelling.
"If you do any outdoor campaign in a unique and creative way, all the people connected on their mobile phones will want to share it on social media," he said. "Outdoor advertising can become social media."
Until recently, it's been much easier to collect and analyze data for online advertisements. That gives the medium a clear advantage over outdoor campaigns. But that's beginning to change.
Clear Channel Outdoor Holdings (CCO), which has more than 1,200 digital roadside billboards across 28 U.S. markets, said it's now using mobile data from a third-party provider to detect which phones pass in front of its billboards. That's helping to make the case that physical ads in public spaces still work.
"Things that people can physically see and touch are much more believable," said Chris Garbutt, global chief creative officer for ad agency TBWA, which works with top tech companies including Apple and Intel. "It makes sense for these tech companies to use outdoor advertising."