Global digital ad spend is expected to reach $223.74 billion in 2017 with mobile advertising being the key driver. In 2016, digital advertising topped traditional media advertising (TV included) in revenues. Digital advertising ROI is also 6 times greater than advertising through traditional media. Revenues of numerous ad tech companies have also grown steadily over the last few years.
On a Jet Plane?
Does this mean the digital advertising industry is in an accelerated growth phase? Not exactly. That’s because digital advertising is fraught with transparency and effectiveness issues. From fake traffic to inefficient formats (YouTube ads); banner blindness to clickbait and bot traffic – these and other issues have kept both brand marketers and agencies on their toes.
Latest numbers suggest that ad fraud – where bots rather than humans view or click on adverts on websites – could cost brands $16.4 billion globally this year.
Fraud in Digital Advertising 2017 Report by ANA Conference, revealed that the economic losses due to bot fraud are estimated to reach $6.5 billion globally in 2017.
Industry numbers also suggest that 20% of total digital ad spend was wasted in 2016 due to ad fraud.
Users disgruntled with intrusive adverts have found salvation in AdBlock and Adblock Plus – free web browser extensions to block ads. Globally, over 300 million devices (including mobile handsets) now use one or another form of ad blocker. Ad-blocking software cost the advertising industry nearly $22 billion in lost revenue in 2015.
In 2017 numerous of initiatives appeared for white listing publishers with quality and verified traffic as iAB Labs ADS.txt initiative – Authorized Digital Sellers, which Google is integrating into its DFP Google Display Network. The strongest initiative currently is created by AdBlocker / AdBlocker Plus white listed publishers initiative.
Brandvertisor is focused on building profiles for quality traffic publishers since its launch. Our team obsession with transparency into advertising is finally happening with a great speed in 2017 around Blockchain, AdBlocker and White Listed Publishers initiatives. We are happy to see that what we have predicted for years, finally came into Adtech. We can focus on building sales and matching marketplace infrastructures to help brands and publishers to build long-term partnerships.
For the last 6 months our organic traffic grew up by a 700 % increase, showing how much brands are looking for a working solution to buy traffic directly from publisher. At the same time publishers are looking for Blockchain infrastructures to sell their traffic directly. We believe that we are the missing link of the chain – a marketplace which will not separate, but connect all parties in the advertising process from Agency, DSP, SSP, DMP to Ad Network (Programmatic), to Ads Expert, Brand, Marketer and Publisher, Influencer.
Display ad have also become ineffective with its click through rates falling to 0.05% as more and more users ignore these formats.
As Gabriel Leydon, CEO, Machine Zone said at Code/Media 2016: “Buyers are going to become more sophisticated whether everybody likes it or not” and “media will be quantified”.
The Silver Lining
Every crisis feeds creative forces. Take native ads: these look like a blog post rather than the traditional banner advert. Native ads resemble the familiar advertorial format of newspapers and they help in combating ad frauds to an extent.
But a far bigger step is the awareness of just how important is transparency in advertising. Advertisers have finally realized that they should care what is happening with their advertising budgets. Many of them have also started demanding behind-the-scenes access as well as a say in the process. Blockchain technology is another innovation that is gaining traction to resolve the problems of ad frauds and transparency in digital ads. Advertisers and brands are now evolving into sophisticated clients and early adopters of new Madtech tools and Ad Tech startups. Brands are shifting from traditional advertising agencies to the ones which utilize ad tech to provide a transparent, performance and ROI-based approach. Top brands have stopped switching to Omnicom, Audience Science or other hybrid agency trading desks because they see the value of ad tech.
How is it affecting traditional advertising agencies? Hundreds of ad networks are witnessing budget cuts to the tune of billions. All because they refused to acknowledge the new trends and change with the times.
Despite resistance from the advertising industry, ad tech, the set of software and tools that help agencies and brands target, deliver, and analyze their digital advertising efforts, is gaining popularity. New ad tech startups are being launched regularly.
And the industry needs them too! In the last one year, about 70 % of all online webmasters and affiliate marketers switched to paid advertising methods. Display advertising is shifting from ineffective banner ads to hyper-targeted audience advertising, marketing automation, cross-cookie synchronization and data-driven per user optimized marketing. Brands are also protesting from buying fake traffic from unknown sources. Ad tech tools give brands the ability to work with very small marketing teams and automate the entire marketing process at minimal cost.
Democratization of the industry
These are exciting times for the ad tech industry. In the last 3 years, the ad tech world has shifted from CPM to CPC to ROI to Micro-moments. Predicting the future is complex, but it’s obvious that within 5 years or so we can hope to see hyper targeted ads that will change and adapt according to our mood, weather and current relationship status. Ad platforms will soon be hosted on blockchain transparent infrastructures as a standard. More open source solutions will also emerge with the blockchain concept in mind. Increased use of ad tech will also enable brands to cut out the middle men and monopolistic practices of the industry.