Ad fraud has developed into a full-blown problem in digital channels over the past few years. Though the issue has been front and center for many advertisers, it doesn’t appear to have improved much. The Wall Street Journal reported a study earlier this year by the Association of National Advertisers and ad-fraud detection firm White Ops that found ad fraud is costing the industry $7 billion in the form of ads that marketers pay for but consumers never see.
The two parties also found that the rate of fraud was “relatively unchanged” from a similar study in 2014. Such fraud includes bots that simulate actual traffic to make it seem like an ad has been seen and clicked on when it hasn’t actually been viewed at all, as well as invisible ads that are “stacked” to rack up impressions.
Not surprisingly, some advertisers have decided to flee digital for safer havens. The Standard Media Index, which measures media dollar volume from 80 percent of major advertising holding companies, shows that TV spending has held fairly steady over the past year. Digital has grown as well, but not as fast as it has in the past. James Fennessy, chief executive officer of SMI, told Media Life Magazine that many major brands saw declines in sales after taking money out of TV.
The Fraud Problem
Part of the reason fraud remains a problem in digital is that much of the buying is done programmatically—more than two thirds of digital display spending is now executed via programmatic, according to eMarketer. While digital programmatic helps target buys and execute them quickly, it can inadvertently perpetuate fraud. That’s because marketers often set campaign goals to maximize buys with cheap inventory, which can expose advertisers to unsafe inventory at 3-5 times the rate of higher-priced inventory, The Huffington Post explains.
In addition to buying more expensive inventory, marketers can fight fraud by baking in agreements to set viewability targets (70 percent is a standard industry metric) and use third-party monitoring to ensure compliance with anti-fraud policies. Marketers can also require their partners to offer transparency in their supply chains.
Rush to TV
Given how much we hear about digital, it may seem surprising that TV continues to be the main event in U.S. advertising. In 2016, TV is still the number one vehicle for ad spending in the U.S., though that’s projected to change next year, according to eMarketer.
For proof of TV’s continued viability, look at what some of the hottest digital properties are doing. Vice has had a show on HBO since 2013 and The New York Times reported the launch of Viceland, Vice’s cable channel, earlier this year. NBC Universal also invested $200 million in BuzzFeed in 2015. The two plan to “explore strategic partnerships across both organizations.”
There are several reasons why TV remains attractive. Although TV audiences are much smaller than in the past, they’re still relatively big. Big Bang Theory‘s 5.8 average rating this season (reported on TVLine), which translates to about 6.9 million households, is less than Seinfeld‘s debut rating of 8.0 in 1989 (discussed by The Wrap), which was considered mediocre. But with media fragmentation, it’s hard enough to get 6.9 million households to tune into anything.
Unlike Internet media, TV media is still finite: People can create endless websites, but there are only so many TV channels on which to run ads. For marketers who’ve run digital campaigns that seemed to boast great metrics, only to find the campaigns didn’t do much for sales, TV still seems like a winning bet.