"Fraud is the elephant in the digital room” according to a report on digital ad campaigns published today by metrics company comScore (NSDQ: SCOR). The report also claims that companies are paying to have their display ads appear on "objectionable content” sites dedicated to pornography, piracy or malware.
The findings are part on a white paper that summarizes the ad experience of twelve major brands including Sprint (NYSE: S), Ford and Kelloggs.
In a preview of the paper released in January, comScore reported that 31 percent of the 1.8 billion ad impressions purchased by the companies were not seen at all.
The findings are significant because brands are shifting a greater percentage of their marketing budgets to digital advertising. And, unlike a TV or radio ad, it’s hard to tell when and where an online display appeared—or even if it appeared at all.
Today’s white paper shows that brands are struggling not only to make sure their appear, but that they appear to the right viewers.
According to the study, 3-10 percent of all ad impressions are shown to non-humans—bots and spiders that induce a web page to display an ad. It also finds that 72 percent of all ad campaigns resulted in brands placing their ads next to "objectionable” content. In practice, this means that brands paid to have their ads appear on sites dedicated to file-sharing or phishing:
These findings may worry ad buyers but may actually symbolize overall progress for the still-emerging online ad industry. That’s because this is the first time, according to comScore, that brands have been able to validate their ads across a variety of ad services.
The findings may also presage a shift in how brands and publishers approach ad buying. According to Anne Hunter, an SVP at comScore and one of the study’s authors, ad-buying will become less a leap-of-faith for advertisers. Publishers, meanwhile, will have a greater ability to ensure they don’t off-load premium ad inventory at discount prices.
The study also found that, for now, "good guys” are not being rewarded for providing a quality advertising audience—brands have been paying the same amount for an ad regardless of whether it is seen or not.
comScore has an interest in the findings because it sells ad monitoring tools. The company gathers its research by working with a large sample group of internet users who let comScore track their web surfing behavior.
comScore’s report can be found here.