As questions of transparency continue to plague digital advertising, columnist Patrick Armitage puts together a list of five key points to consider when navigating the digital ad landscape.
When Facebook last month admitted to exaggerating ad video views, it underscored for many marketers the dubious metrics and efficacy of online advertising. Lack of transparency in digital advertising continues to be a challenge for businesses, agencies and publishers.
When it comes to justifying their media spend and ROI, businesses want more transparency from their agencies and publishers. And in turn, agencies want to deliver accurate reporting to their clients, and publishers want to reassure media buyers of their traffic’s veracity.
Homer Simpson famously said, “To alcohol! The cause of… and solution to… all of life’s problems.” And I’m saying, “To data! The cause of… and solution to… all of digital advertising’s problems.”
Herein lies the data paradox for marketers and digital advertisers: Data can justify ad spend and just as easily compromise ad spend.
We’ve become so enmeshed in using data to make marketing decisions that advertisers, agencies and publishers can obfuscate data to suit their respective agendas. The upshot: Everyone is now suspicious of everyone.
What data is verifiable and trustworthy? What data is relevant? And it’s not just small businesses; huge businesses with high-priced agencies are auditing their media spend.
Watching this shared suspicion and uncertainty play out is unsettling for our business and other businesses like ours. Digital advertising isn’t going anywhere any time soon. In fact, digital ad spend grew 19 percent in the first six months of 2015.
Digital advertising should play a role in your marketing strategy, but how can you be sure of its credibility?
I put this list together with Jeromy Sonne of Sonne & Taylor to help businesses understand the fundamentals of digital advertising before getting started.
1. Not all traffic is created equal, especially bot traffic
Focusing on top-line metrics without considering traffic sources can destroy the integrity of your media buying budget. Bots are a serious problem. The Association of National Advertisers predicted that $7.2 billion in digital advertising will be lost on bots in 2016.
Become knowledgeable about what sites are sending traffic to you. Track bounce and new session rates. If both are excessively high, you should investigate further. If pages per session and session duration rates are low, you might also have a bot issue.
Use common sense. If you get a non-English site sending lots of traffic to your English-only site, that should raise bot traffic concerns.
Try to discern if and where bots are coming from and move quickly to blacklist those sites from your media strategy and buying. Also, consider finding solutions and resources to filter bot traffic for you. One company, Distil Networks, creates products specifically designed to filter bot traffic from your site.
2. Data for data’s sake is worthless
Market research is neglected in the digital advertising space. Even if your target audience is clean and bot-free, is it really relevant to your business?
Comedian and podcaster Adam Carolla shared an anecdote during his podcast that has stuck with me to this day. When promoting one of his projects, he said that he got more traffic and sales when he appeared on podcasts with 1/10 the audience of “The Tonight Show.” Sure, “The Tonight Show” has more cache and more eyeballs, but is it the most relevant audience for what Carolla’s promoting? Clearly no.
The same rules and scrutiny should apply when using an agency or media partner to make media purchasing decisions.
Push your media agency to explain why they’re targeting the channels and demographics they are targeting. Don’t take data for granted. Bigger doesn’t always mean better.
Are they analyzing your existing customer database, talking to your sales team and finding data to gain better insight about your core audience, or are they just guessing or relying on data from a third-party data provider with little to no scrutiny?
No marketer should take data at face value. Taking data at face value is for suckers.
3. Find out if ad tech is worth it
Many agencies use third-party technology to manage and source their digital ad buys. But ad technology costs can scale very quickly.
Is your media agency charging you a percentage for using ad technology? Is your agency using ad technology to save themselves time and money but at the expense of your media budget?
Find out.
Ask your agency or media buyers why they don’t use or have a native solution. Ask if and why they use a big, expensive demand-side platform (DSP) as their only solution. And ask them to explain the tech stack they’re using for your account, what the justification is, and what service fees, if any, they pass on to you.
4. When it comes to analytics, don’t put all your eggs in one basket
Every analytics tool is different. Each one has different measurement capabilities, defines values differently and discovers discrepancies when comparing data from one tool to another.
Alternatively, relying 100 percent on just one tool can limit what you can measure, as well as your ability to catch implementation errors.
At BlogMutt, my employer, we looked at new customer data through our database, Google Analytics and HubSpot. Each tool reported different results. Had we relied on just one tool, we wouldn’t have noticed a discrepancy. Having multiple tools enabled us to not only identify a discrepancy, but also to isolate the variable data and determine the most accurate metric to use moving forward.
5. When in doubt, trust the free market
Even if you take a pessimistic view of the digital advertising world and think that bot traffic can’t be avoided, online advertising is a free market economy. You can adjust your bidding strategy depending on your assumptions of a site’s bot traffic.
Reid Tatoris, in his article, “The Definition of an Ad Impression,” breaks it down like this:
We start with the notion that only 15% of impressions ever have the possibility to be seen by a real person. Then, factor in that 54% of ads are not viewable (and we already discussed how flawed that metric is), and you’re left with only 8% of impressions that have the opportunity to be seen by a real person. Let me clarify: that does not mean that 8% of impressions are seen. That means only 8% have the chance to be seen. That’s an unbelievable amount of waste in an industry where metrics are a major selling point.
Prudent marketers should price for bot traffic by managing bids inside their marketing models accordingly. In another excellent article about bot traffic on Moz, Samuel Scott recommends revising your advertising KPIs and metrics to account for actual humans viewing your ads:
“If you are paying $0.10 per impression, then the $10,000 that you will pay for 100,000 impressions will result in only 8,000 human views—meaning that the effective CPI rate will actually be $1.25.” In addition, half of all clicks in CPC campaigns might also be bots. As a result, a $2 CPC result may actually be $4 when reaching human beings is taken into account. Ad campaign analysts may want to take alleged bot and fraudulent activity into account when calculating ROI and whether display advertising is worthwhile.
And a few recommendations to always consider
Buy direct to ensure your ad spend isn’t wasted. Do the research yourself, and find the websites with legitimate, relevant audiences.
Think quality, not quantity. That may mean running ads on industry-leading sites instead of trying to maximize your reach with smaller, less-known sites.
And when in doubt, run manual campaigns before jumping into programmatic ad buying. The manual process of placing digital media may be more laborious, but it will make you a savvier digital advertiser in the long run.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.
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