Growth Continues for Programmatic Advertising Despite Lack of Transparency and Prevalence of Ad Fraud

Global programmatic advertising expenditure is set to grow from $28 billion in 2015 to $53 billion by 2018. Such exponential growth towards programmatic advertising is due to advertisers feeling increasing pressure to achieve higher ROIs for their marketing campaigns by more accurately targeting customers through real time optimization.

Though programmatic advertising does help advertisers achieve higher returns than traditional advertising, it also causes concerns about the prevalence of bot fraud and the lack of transparency in pricing while using automated ad buying.

Bots are computer programs deployed to simulate website traffic and publishers will use these bots with the goal of increasing traffic numbers on their websites. Advertisers are then asked to pay the publisher for the increased traffic (through pay per click / impressions) in their websites.  According to a study conducted by the Association of National Advertisers (ANA), fraudulent web traffic in the form of bots is set to wipe out $7.2 billion globally by the end of 2016.

A study conducted by comScore noted that by the end of 2014, it was estimated that close to 54 percent of ads were never shown to a human visitor while still being counted as impressions by publishers.

Fraudulent web traffic isn’t the only thing advertisers are worried about.  The majority of advertisers express anxiety over the lack of transparency in the base rates for ads bought using programmatic media buying.

According to a recent survey by ANA, 31 percent of the advertisers are combating these issues by improving their ability to manage programmatic advertising in-house.

In addition, advertisers are overcoming programmatic ad frauds by avoiding blacklisted sites with high levels of fraudulent web traffic, closely monitoring campaign metrics, establishing required levels of transparency during bid requests, and by using preventive controls such as making sure they engage with ad exchanges that work only with legitimate validated publishers.

Contributing to the war against fraudulent practices in programmatic advertising, companies like Google and AdNexus have begun selling “fraud free” ads, striving to achieve 100 percent viewable online ads.

As programmatic media buying continues to gain huge popularity over traditional media buying, advertisers have to make sure that they follow stringent practices while engaging with publishers to not only make sure that the ads reach the intended audience, but also that the money invested in purchasing ad spaces online brings high returns.

Marketing

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