Wednesday, September 28, 2016

Doubts About Digital Ads Raise Over New Revelations

By Suzanne Vranica and Mike Shields

Sept. 23, 2016 7:45 p.m. ET

Marketers pour huge amounts of money into digital advertising every year. However, marketers are now finding out they cannot be sure how well that money is being spent or what they are really receiving in terms of the return on investment. Revelations that Facebook Inc. overestimated by up to 80% the average time people spent watching video ads on its platform shocked the media and marketing world. Marketers  globally fear they are wasting billions of dollars on ads that aren’t viewable, or visible to the human eye, or are being shown on sites with computer generated fake traffic. The lack of transparency and truthful measurement of online advertising will be issues mentioned in the annual Advertising Week Festivities gathering in New York next week. Facebook disclosed that the metric it reported for two years of the average time users spent watching videos was artificially inflated, because it only factored in video views of more than three seconds. Therefore, The Wall Street Journal reported that this error likely overestimated the average time spent viewing videos by 60% to 80%. Facebook has a 22% share of the $46 billion U.S mobile ad market, according to eMarketer, and its mobile ad revenue jumped 80% in the latest quarter. My opinion is that marketers need to keep increasing spending on digital ads, especially on mobile devices, if they want consumers to spend more time on digital video versus TV. However, I also agree that the information cannot be overestimated because it could have impacted how much money marketers allocated to the platform and misled them on how effective their ad campaigns were.

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