Digital Intelligence: Solving the $100 Billion Dollar Problem in Marketing Waste

By Team Block697

Every year throughout the world of digital advertising and marketing billions upon billions of dollars are wasted as the result of ineffective targeting, inadequate content, and Ad fraud. This Ad waste is completely avoidable with data driven marketing strategies and leveraging digital intelligence software tools to identify where marketing dollars are being spent ineffectively. In the year 2017, we saw an unprecedented landmark in this new trend where online Ad spending finally surpassed TV Ad spending at $209 billion - equating to 41% of the market (According to Magna - the research arm of media buying firm IPG Mediabrands). 

One would be wise to bear in mind that this is not because TV ads are cratering. TV ad spending is still flat or slowly growing, depending on the year, and in most cases, big TV advertisers have yet to move much of their budget over to digital - even though Facebook and Google are working hard to make that happen. It is easy to assume that one can expect this trajectory to continue in the coming years. Next year Magna expects digital ad spending to grow by 13% to $237 billion, while TV ads will grow 2.5% to $183 billion (thanks in part to one-off events like the Olympics and the U.S. mid-term elections).

Ad Fraud

Ad fraud and non-viewable ads have proven to be a main problem area for the digital ad industry, resulting in wasted time, effort, and money (according to new research released by Forrester Research). The research quantifies advertising problems with data on the types of advertising that can often cause the most problems, and it predicts the ways in which Forrester sees them evolving over the next five years. The researchsuggests that advertisers are wasting billions by underestimating true costs - determining that as much as 56% of all display ad dollars were lost to fraudulent or un-viewable inventory in 2016. According to a forecast by 

Digday, upwards of $7.4 billion were wasted on display ads alone - a number that is projected to surpass $11 billion by 2021. Forrester’s data also reveals that video and programmatic video advertising are the main causes of ad fraud spending wastage. While videos account for 44.7% of spending, it’s responsible for 63.8% of ad fraud. Programmatic video is a more particular problem area, as Forrester data estimates that it accounts for 66.5% more fraud than direct video.

 Figures recently revealed show that almost half (48%) of online adverts do not reach the intended targets across France, Germany and Italy, and the U.K.These statistics, from Nielsen’s Digital Ad Ratings service, are likely to mean that billions of online marketing dollars are being wasted. Europe as a whole spent €36.4 billion ($37.9 billion) on digital advertising in 2015, according Interactive Advertising Bureau. 

 "Although 100% accuracy is likely to remain a pipe-dream, a school report on digital technology's ability to hit specific audiences might read 'could do better'," - Barney Farmer, Nielsen's marketing effectiveness director in the UK & Ireland.

The consumer packaged goods sector fared the worst when it comes to ad impressions, or the number of times an online ad is seen by an audience, with only 42% of campaigns reaching the people they were aiming for. Adverts for cars also fared poorly, with 45 percent reaching their intended audience - followed by those for computers and electronics as well as shopping and retail (both with 49%). The best-performing sector is travel, where 65 percent of online ads reached the right people.

Nielsen's figures also show that advertising via desktop computers fared slightly better than those shown on mobile devices - reaching 52% of the intended audience versus 50% for mobile. Campaigns aimed at people aged between 35 and 64 were more likely to reach the right audience - with 54% of ads reaching them (versus those aimed at younger people). 44% of online ad campaigns aimed at 18 to 34 year-olds were seen by them.

A spokesperson for Nielson's praised digital advertising's ability to reach people more effectively than other media, "However, in fairness it's more precise than traditional media and performance is improving all the time, particularly on mobile whose superiority in reaching narrower audiences reinforces its status as the most highly personal ad medium."

 

Block697 is a diversified technology consulting firm that offers a world-class platform of digital intelligence tools for its clients. Get in Touch with Block697 Contact-Us.