Monday, May 5, 2014

The Value Of Online Advertising

The online advertising marketplace continues to be a growing business, with metrics and analytics galore to assure that the right advertisements are being targeted to the right audience.  Yet with all this data, are ads even being seen at all.  "By many estimates, more than half of online video ads are not seen, either because they are buried low on web pages or run in tiny, easily ignored video players on those pages, or run simultaneously with other ads."  Sure CPMs for some of these ads may only be pennies, it is likely that the total dollars of these media buys are significantly wasted.  This weekend's NY Times article should have ad agencies and media buyers in an uproar. 

The truth is that there is a ton of online content out there, literally, and the number of pages and videos are growing exponentially.  On each page and with each video, space exists for ad insertion.  The supply seems endless, perhaps even approaching infinity.  And while some tier one content has great value, most occupy the endlessly long tail of niche viewership.  It is a field day as buyers and sellers use automated exchanges to target and place ads across all these sites.  "When there is unoccupied ad space, a computer starts a sort of Dutch auction with a number of ad networks."  But the space that is being filled could be "below the fold" on the page, or automatically run a pre-roll even if it is barely visible.  And in some cases, quality "family" products may find themselves placed on less than desirable web pages, as noted in the article. 

So is anyone angry?  Does there seem to be a noticeable uproar or is this digital world deemed acceptable as is? Perhaps in exchange for such high quantity of online ads at low CPM prices, the percentage that is waste is manageable.  I hope not given that the percentage calculated called 57% of online ads unwatchable.  The online world has become so fragmented that many of these ads have lost their value entirely.  And it is why sponsored and native content may have the best opportunity to deliver ROI for advertisers seeking results from their online ad budgets. 

As far as this article is concerned, I hope it is a wake-up call to the digital community to tighten up their act.  Otherwise, budgets may soon be leaving this piece of the business. 

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