Online Advertising Under Pressure to Justify Itself

It’s almost as if an outdoor advertising provider were putting up posters on the lowest level of an underground parking garage: Often, display ads served—and therefore billed for—on digital media channels have no chance of even reaching the user. Now, solutions for measuring visibility are increasingly emerging, bringing this dark secret of online advertising into the spotlight. At the end of March, the market research firm Comscore presented the detailed results of a comprehensive study showing that, on average, 31 percent of display ads never reach users. Depending on the website, this figure ranged from 7 to 100 percent. The reason for these lost impressions is quickly apparent: the ads are placed on the website in such a way that users hardly ever see them (below the fold), or they scroll past before the ad can even be displayed. On average, 4 percent of the ad impressions examined were delivered outside the targeted distribution area due to failed geotargeting—for example, in regions where the advertised product is not available at all. In 72 percent of the campaigns analyzed, at least some of the ad impressions appeared alongside content that was incompatible with the advertised brand. Although the study focuses on the U.S. (it examined 12 national brands with 3,000 placements on 381,000 websites, resulting in 1.7 billion ad impressions), there is no reason to assume that the situation here is fundamentally different. This is because, in Switzerland as well, there is no neutral and comprehensive evidence regarding the actual performance delivered in online advertising—such as the added value of targeting and, above all, the advertising impact achieved.

Some publishers and agencies have already responded to these shortcomings. Stefano Buzzi, Head of the Advertising Market at Newsnet & Tages-anzeiger.ch, reports on a pilot project to measure ad visibility that Tamedia is currently conducting with the company Meetrics. Hendrik van Dyck, Head of Online at Mediaxis, explains that because the ad server provider (Adform) supports the measurement of visibility rates and duration, they can advise clients on qualifying ad impressions. And Andreas Jorgella, a partner specializing in business development at The House Agency AG, notes that as an agency, it is «essential to integrate our own tools» to enable a certain level of verification of performance metrics as well as more in-depth, client-specific analyses. As a tool provider, the agency collaborates with Alenty.com, among others, and uses Adition’s ad server, which integrates the necessary tracking and measurement methods. He expects this to become standard practice in other ad server solutions as well in the future, which would, among other things, help prevent counting discrepancies.

As a look at the U.S. market shows, proving the viewability of ad impressions will be a dominant issue in the online advertising industry going forward. As a result, various industry associations launched a joint initiative (Making Measurement Make Sense, 3MS) to establish basic rules for measuring visible impressions. And as one of the first media companies to take this step, the American publisher Forbes, which publishes the business magazine of the same name, announced that in the future it would bill only for ad impressions that were actually visible, using a solution from Comscore. Similar considerations are also being made here. For example, Buzzi of Tamedia says: «In the future, it must be a given that campaign reports include quality information on ad placement.» And he hopes: «In the long term, this should also lead to higher budgets.» It will be interesting to see in the future exactly how these new insights into online advertising will impact the industry. If more qualitative performance data becomes available, this is likely to put downward pressure on prices initially. Can shortfalls due to lack of visibility or incorrect delivery be offset with better qualitative reports and correspondingly optimized planning? Or can higher prices be charged with better proof of visibility? After all, it has always been known that not all ad impressions had the same chances of visibility. However, until now there has been no reliable data on this, so discounts may have been calculated that are larger than what now appears to be actually justified.

In any case, this topic will continue to be the subject of much discussion. «The entire industry is called upon to act,» notes van Dyck of Mediaxis. For him, technical standards aren’t the top priority; instead, he emphasizes: «What’s important is an understanding of the issue among clients, agencies, and providers, as well as technical solutions.» Jorgella agrees: «However, we see standardization not only at the technical level of tools (ad serving, tracking, targeting, and bidding tools), but also in terms of knowledge and how we handle them.» He emphasizes that the harmonization of campaign design with planning and media execution as a cohesive whole is «given far too little consideration» today. For example, it is wrong to evaluate and optimize a brand-focused campaign based on click-through and conversion rates instead of assessing it using traditional and qualitative brand metrics. This likely means that, both today and in the near future, market participants will continue to have to deal with a wide range of individual tools and instruments. Christoph J. Walther

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