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The silver lining to online advertising's murky secret

The silver lining to online advertising's murky secret Jeremy Ozen

The Wall Street Journal reported late last month on a "crisis" facing the online ad world: Approximately a third of ad traffic is bogus, coming from viruses and bots. The murky secret of online advertising is that this is not a new phenomenon: Click fraud and fake traffic have existed as long as online advertising itself. Despite the huge amount of money wasted on this bogus data, digital media planners and buyers have often chosen to overlook this issue, focusing on (questionable) ROI, defined by clicks instead of expensive inefficiencies. This was true when most online ads were sold directly, and it's even truer now that we're in the age of programmatic.
But the age of programmatic also comes with something of a silver lining: It's made it easier to purchase ads on platforms where traffic cannot be fabricated, such as television and digital out-of-home (DOOH). Because these are controlled media with a finite amount of inventory and few key players to manage it all, it's quite literally impossible for a spammer to re-route traffic to a site that doesn't exist. If inventory is sold, ads appear. Period.

The slow adoption of "digital"

The internet -- and our understanding of how it works and what it does -- has come a long way in a very short period of time. (If you don't believe me, check out this video from 1994, and prepare for a laugh. "What is 'internet,' anyway?") But still, despite advances in both the technology and its adoption, the decision to advertise online is one that brand marketers and traditional agencies are often still testing. Digital advertising was, for a long time, considered to be less reliable and less effective than traditional media. There's also a very prevalent "fool me once" mentality amongst brands: Once burned, they're unlikely to trust the medium -- or at least the specific network or channel -- they had used unsuccessfully. The very real perception that online exchange inventory is "leftover" or "below-the-fold" further contributes to this mistrust.
But at the same time, brands realize that the audience is increasingly online: As of a year ago, there was an average of 5.7 connected devices per American household -- reaching consumers digitally has become an imperative.

Understanding inventory

But a seemingly infinite number of connected devices has led to a seemingly infinite amount of online (desktop web and mobile) inventory, with very little oversight as far as what ads get placed where. The WSJ piece reports that L'Oreal has rewritten its contracts to protect their campaigns against bots and bogus traffic, but unless every campaign they run is through a direct-buy, this will still be hard to police. Programmatic for desktop and mobile will always be susceptible to bogus redirects and clicks.
However, not all exchange inventory is risky. As I mentioned above, traditional media like television, as well as newer channels like DOOH, have much less inventory, which can be much better-policed. There are only so many television channels (and time slots), only so many digital billboards or taxicab screens or dynamic elevator displays in existence. Of the inventory available on those, there is only so much that gets sold through direct buys. What's left, despite being unsold, will always be more reliable, manageable, and most importantly, attributable, than unsold inventory on web or mobile channels.

"Offline" programmatic is the future

With all the pitfalls of online media, most of the dollars spent still have direct response goals. If your goal is a cost per conversion, you can ignore all those fake impressions as long as the cost of your campaign nets an economic gain. But for programmatic to really make a long term impact, it needs to be used by brand marketers. Placements on these programmatic "offline" channels (I use the word in quotes because the screens are still truly online, but they're not owned or controlled by the consumer) are both reliable and tangible. This is why "offline" programmatic is the future: It is the easiest way to get brand marketing dollars onto programmatic platforms.
If it's so important that brands get "real" impressions for their ads, maybe it's time for them to start moving their online ad budgets to these emerging programmatic platforms.
Jeremy Ozen is the co-founder of Vistar Media.

On Twitter? Follow iMedia Connection at @iMediaTweet and Jeremy at @vistarmedia.

As co-founder and president of Vistar Media, Jeremy Ozen is responsible for strategy, business development, marketing, and key strategic accounts. Ozen was previously at Goldman Sachs European Special Situations Group in London monitoring a...

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