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The Mind-blowing Amount of Waste in Online Advertising

Here are the biggest dangers in online ads as I see it in 2014.

Today, a large amount of advertising is simply going to waste because the ads that were allegedly served never had a chance to reach their target audience. Since traditional offline advertising measurements are very limited, waste has always been a huge portion of every campaign. While there is a TV ad running, brands have no idea if the audience is paying attention to the spot or not. In many cases, the viewers were not even present, probably using the commercial break to do anything but watch an ad.

This was, and still is, a fact of life that we all got used to. Online advertising on the other hand, brought along a great promise with it: Everything is measurable and thus, no more media waste! Thanks to great technology, brands can reach their relevant audiences only, get their attention, and pay for results. (especially Pay-Per-Click campaigns.)

However, in reality, this vision is yet to come. While the offline waste was a direct result of actual limitations, online waste is a direct result of commercial interests. If you look at the modern digital advertising world, it's clear that out of all the campaigns sent out, only a fraction are actually absorbed, viewed, and put to good use--campaigns with a high level of optimization and a 24/7 attention.

Here are my guesses as to the reasons behind the vast majority of ads going to waste;

Banner blindness: After years of in-your-face, ill-designed online banners, people have become blind to many forms of online advertising, especially banner ads. It's becoming clear how little people pay attention to, much less remember, banner ad campaigns. According to a recent study, 86% of consumers today suffer from banner blindness. Advertising spending on banner ads is on the decline in the United States. In fact, more than 30% of brands report that they plan to shift their ad spending to online video. This reflects the new trend that online video will replace banner ads in the future as a more feasible and lucrative means of advertising (via eMarketer).

One of the biggest weaknesses of banners is that they are distanced from the content itself, both fiscally (that is, in cases when they are not being placed within the article, video, or game--but rather on the side of the page) and sometimes even contextually.

Bot fraud: According to Solve Media, an estimated more than 50% of online traffic is fraudulent. This phenomenon has become one of the most talked about issues in the past year, probably due to its amazing 40% growth rate during 2014. Brands are no longer willing to accept bot traffic as something that was always there and always will be, and the market is being forced to find real solutions. Companies like MdotLabs, Integral Ad Science, Adap.TV, and of course the iAB are creating innovative products, security measures, and new industry standards in hopes of decreasing the effects of suspicious Web activity on advertisements.

In platforms such as Facebook, lack of heavy optimization can cause a much, much higher rate than 40% of bot clicks.

Viewability Issues: One of the biggest problems facing the online advertising industry today is that many ads simply can't be seen by their target audience. A recent study shows that up to 1.8 trillion ads in 2012 were paid for but not seen. Another study by ComSource found that 50% of ads aren't seen. These ads are the ones that pop out behind our current browser windows or banner ads located in unsightly places, like the bottom of the page. This occurs mainly when using mass production ad networks rather than hand-picked, personalized and optimized ad campaigns.

So what does the future hold?

Normally, the only way to overcome these statistics is to nail a tremendously personalized campaign: heavy optimization, daily track of clicks, working with a few different platforms at once to measure the realness of each click. For some campaigns, I use a mixture of Analytics, AdWords, KISSmetrics, and Woopra just so I can get my hands on the real live data.

However, it should be mentioned that there's a technology designed to do this in a more automated way; interactive ads that are triggered by user choice. It's quite simple, if the ad is being shown only after the users' active action ("click initiated"), then it is far more likely that there is a real, engaged user on the other side of the screen who will actually notice the brand message.

AOL interactive videos, for example, are using the technology of Israeli startup Carambo.la for that purpose. There's also a foundation named Brainnet that measures cognitive awareness, thus contributing to this developing world as well.

How do you overcome the dangers of banner blindness and bot frauds? Would you recommend any other platforms or tools for increasing the likelihood of viewing by a real person? Let me know!

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Last updated: Jul 16, 2014

YOAV VILNER | Columnist

Yoav Vilner is a tech blogger, growth hacker and startup marketer. He's also the co-founder of Ranky, a startup marketing team.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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