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Where's the digital advertising money going, exactly?

By Rahul Vengalil , What Clicks, Mumbai | In Digital | April 03, 2017
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Google and Facebook account for close to 50 percent of the total digital spend. Yet, the two platforms don't allow third party ad verification, laments the author.

The last couple of weeks have seen Google coming under a lot of ire in the US and UK for showcasing ads next to objectionable content. Over 200 brands have decided to stop advertising from the network. The estimated loss of advertising for Google is approximately $750 million globally. That is a lot a money by any standard for the Indian advertising fraternity. This amount in question is close to 60 percent of the total digital advertising budget of India.

This report got me thinking on why such a gaffe happened in the first place and whether there is an urgent need for brands and marketers to invest more into monitoring what's happening to their digital spends. For this, let us see how digital media has evolved over the time.

Rahul Vengalil

1. Fragmentation and Automation: There are millions of websites available for brands to advertise on. This includes content that ranges from games, lifestyle, news, music on one side as well as non-brand safe environments like porn, hate crime and even content relating to assembling a bomb. In such a scenario, when there are so many platforms to advertise on, and the only checks and balances in place are some algorithm that matches ads with words, it becomes highly improbable for brands and agencies to keep track of where the ads are shown. As Google's Schmidt said, "Every once in a while, somebody gets underneath the algorithm and they put in something that doesn't match." The only way to circumvent such a scenario is to increase the manual intervention on monitoring, which he himself acknowledges.

2. Click Frauds: A new report claims that $USD 16.6 billion is the size of click frauds. In all possibility, this number would also be underreported as another report claims that 1 in 3 clicks delivered across platforms are frauds. In the Indian context, where brands are investing more and more into performance marketing, whose only objective is to drive down the cost per click, the fraud economy is waiting to jump on this huge opportunity. In such a scenario, it is important that brands start investing more on understanding how much of the money was spent on humans and how much on bots.

3. Low Viewability: Viewability has always been a controversial topic. There are MRC guidelines in place for measuring viewability, which are at best flawed and at worst plain stupid. However, for conversation's sake let us consider that standard. In that also, India as a country has only 56 percent viewability. In other words, 44 percent of the ads served aren't seen at all or INR 44 for every INR 100 spent is wasted. This is a high rate of inefficiency in the system.

4. Newer technology: With newer advertising technology coming in every day, which invades privacy, listens to your phone, reads your messages, it is a nightmare for brands today to really understand where to draw the line. There was a controversy that Lenskart faced when they shot out an ad that said "Nepal Earthquake offer, flat 25% off" or something on those lines. How does a brand take cognizance of the sensitivity and sensibility of consumers, not cross the line, and not draw their ire on social media platforms? I have seen advertisements from one of the largest retail brands in India which have deployed retargeting with no Call To Action. The ad is displayed, they are charged for serving the ads, but consumers do not do anything, nada. The question then is, who takes ownership of monitoring these ads?

5. Duopoly of Facebook and Google: Google and Facebook account for close to 50 percent of the total spends on digital. However, these are the only two platforms in the entire digital industry, which don't allow third party ad verification. This means that brands and marketers are supposed to take their reports at face value. Over the last few months, there have been consistent issues that have come to the fore, which has led to a cry across board for them to open up their walled gardens. Just to refresh your memory, Facebook over reported their video metrics in 2016, put an end to beacon technology before that and now the famous fake news issue. Google came under the scanner for allegedly supporting favouritism in ad sense a few years back, then drew controversy over the shopping ads as well. In such a scenario, who takes the responsibility that the money will be spent wisely.

The answer to my earlier question, on whether brands need to start investing into monitoring and testing is something that I would leave to them, I only wanted to bring to the fore the challenges that one faces in this space which calls for this mechanism. Let me leave by drawing parallel to the time when there used to be a media planning and buying agency for Outdoor and a third party monitoring and reporting agency due to the similar challenges that brands and marketers faced. The third party was in charge of answering the following questions.

1. Are the ads placed in the locations that the brand agreed to (fraud)?
2. Are the ads placed for the stipulated time frame that the brand agreed to (fraud)?
3. Are the creatives used the ones that the brand agreed to (creative)?
4. Are the ads visible enough for the consumers (viewability)?
5. Are the ads placed next to objectionable content/locations (brand safe)?

(The author is CEO and founder of What Clicks, a digital media audit company)

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