Display advertising has long been a staple of digital marketing. It’s visual and compelling, it presents a clear call to action, and it can help create recall and brand awareness.
But does it really? What if a majority of those metrics — impressions, clicks, and conversions — were actually a sham?
Unfortunately, as companies demand more transparency from their advertising partners, it’s becoming clear that at least half of the paid online display advertising that ad networks, agencies, and media buyers have been selling in the past few years isn’t actually viewed by humans. This is the result of impression-based outcomes that are very ripe for fraud. From pop-unders to bots’ clandestine site visits to outright cookie stuffing, display advertising fraud has led to $7.5 billion in wasted ad expenditures.
Also to blame are poorly aligned incentives between the clients and the agencies that place media on their behalf (who are paid a percentage of the spend for many of these fraudulent impressions). Agencies will often send their business to partners who promise the most impressions, which actually helps to propagate the fraud.
This is a huge concern, given the sheer volume of investment sunk into display advertising. This year, Facebook’s U.S. digital display ad revenue will hit $6.82 billion (slightly more than one-quarter of the total market), and Twitter’s will reach $1.34 billion, a five percent share. Both market shares are expected to continue their climb, ascending to 26.9 percent and 6.8 percent respectively, by 2017.
It’s disheartening to realize that fraud is so rampant in display marketing. However, by arming yourself with that knowledge, you’re better equipped to utilize display advertising in a smart way, investing in incremental traffic while mitigating fraud.
Here are four tactics that can help you avoid fraudulent display advertising:
1. Realize Display is Growing Up
In the past, display advertising was all about brand awareness; today, that funnel is expanding. Display is more commonly used by performance marketers to drive conversions through laser-targeted ads based on consumer demographics, psychographics, affinities and behaviors.
If your display strategy is still rooted in simple awareness-based banner ads, you’re missing out. Adjust your approach by looking beyond impressions and measuring success on the basis of performance (leads acquired and products purchased). Display affects brand awareness, but that doesn’t mean it can’t also be measured in terms of a downstream conversion.
2. Demand Transparency From Partners & Align Incentives
Work only with ad networks, agencies and publishing partners that provide independent insight into viewability and fraud measurement for display advertising purchases, including programmatic buying platforms.
You can also watch out for click fraud by checking the IAB’s bot list. Align your agency’s incentives to a “Return on Ad Spend” model rather than simply structuring them on the basis of how much you spend. Finally, make sure all commissions and kickbacks are fully disclosed.
3. Finesse Your Funnel, and Measure Downstream Metrics
Most brands focus their performance metrics on top-funnel figures, such as impressions, clicks, click-through rates and average costs. These are important, but they can’t take the place of middle- and lower-funnel metrics such as conversions, leads, customer lifetime value and return on advertising spend investment.
Take care to measure these performance indicators across the funnel, from brand awareness to engagement to conversion:
- Viewable impressions: ads that could actually be seen when served
- Frequency: average times each viewer saw your ad
- Clicks: number of hits on your ad
- Click-through rates: number of clicks over the number of times your ad was served
- Costs: total you spent on your campaign
- Average price: cost per action, cost per click or cost per impression
- Conversions: registrations, leads or product purchases
- Customer lifetime value: the value your business will derive from its entire relationship with a customer
- Return on ad spend investment: the gross revenue for every dollar spent on advertising
4. Evolve as Display Does
Take advantage of new forms of display. Search and other types of programmatic retargeting methods are a winning combination because they allow marketers to drive conversions by getting the right message in front of the right people. Personal care corporation Kimberly-Clark relies on retargeting, saying consumers who visit its brand site are 20 percent more likely to act on its message.
In particular, retargeting has emerged as one of the most effective types of intent-driven advertising when it’s done on a very personalized basis. This is especially true for heavy investors, such as Zappos.com, that serve up ads featuring users’ previously viewed items. A whopping 70 percent of website visitors retargeted with display ads are more likely to convert.
Ad testing helps marketers distinguish between correlational effects and causal impacts, and understand the effectiveness of their display campaigns. It also helps to prove or disprove a new strategy before allocating a large budget to a campaign and to affirm whether the attribution metrics in place are actually working. Even more important, ad testing can be used to identify the incremental impact or how many products are purchased because of a specific change in the media being tested.
Those tests should eliminate causal effects and uncover which strategies positively correlate with conversions.
Display advertising fraud is an unfortunate reality, but that doesn’t mean you have to settle for it. By focusing more on transparency and performance, you can be confident that ads do what you intended them to: drive meaningful brand interactions, conversions and, ultimately, revenue.