VAB REPORT: AD VIEWABILITY WHO IS YOUR AD REALLY REACHING Primer On Viewable Impressions, Bot Traffic and Ad Blocking & Why It All Matters
MAIN ONLINE Over the Years, the Internet Has Been Plagued With 3 Main Advertising Issues 1) Ad Viewability 2) Fraudulent Traffic 3) Ad Blocking
RESSIONS Over The Past Year, Industry Migrated from Served Impressions to Viewable Impressions What Is An Impression? A measurement of responses from an ad delivery system to an ad request from the user s browser. Note: This does not necessarily mean a person saw the ad. What Lead The Industry To Viewable Impressions? In essence, marketers were increasingly frustrated with paying for ad impressions that were not guaranteed to be seen by a human. What Is A Viewable Impressions? Viewability is an online advertising metric that aims to track only impressions that can actually be seen by users. For example, if an ad is loaded at the bottom of a webpage but a user doesn t scroll down far enough to see it, that impression would not be deemed viewable. Viewable Impressions = new reference currency for digital media transactions. Key Benefits of Viewable Impressions: Provides greater accountability advertisers pay only for the ads that users could possibly see. Provides greater comparability with other media allowing for Cross Media Platform Measurement.
IMP Impressions Are Classified Into Three Main Categories Impressions Viewable Impressions Non-viewable Served Impressions Ads which are not viewable in display screen (i.e. an Ad which appears toward bottom of page, etc ) Non-measured Impressions Unable to be measured by certain vendors Industry debate on whether these impressions should be counted Per IAB & MRC, non-measured impressions should not be assumed to be non-viewable impressions Per 4A s, entire unmeasured inventory goes to waste, even if it was actually viewed Source: iab.net/various sources
MRC MRC in Conjunction With ANA, IAB and 4A s Issued Viewable Measurement Guidelines Viewable Desktop Impressions Desktop Display Ads 50% of pixels must be in view for a minimum of 1 second Larger desktop ads (242,500 pixels plus) 30% of pixels in view for 1 second Desktop Video Ads 50% of pixels must be in view for a minimum of 2 seconds Mobile Display/Video Impressions Mobile Display/Video Interim Guidance Mobile Browser-based web ads are encouraged to consider desktop viewability guidelines for now until a separate guideline is created. MRC is currently creating a plan to create standards for mobile measurement. Source: MRC
VIEWABILITY BY TYPE Publishers Exhibit Highest Ad Viewability Rate Viewability for Display Overall Display Viewability Is Down Slightly: 44% in 2Q15 v. 49% in 2Q14 Networks & Exchanges Publishers 39.9% 50.1% In View as per MRC standard Source: Integral Ad Science Media Quality Report 2Q15
VIEWABILITY BY SIZE/TIME Ad Viewability Is Greater With Smaller Ad Size and Shorter Display Time Display Viewability by Time Networks & Exchange Publishers Overall Display Viewability by Ad Size* 1s 5s 15s 50.1% 44.0% Leaderboard 728x90 25.0% 14.0% 44.1% 39.9% 34.2% 48.3% 25.9% 28.9% 19.7% Medium Rectangle 300x250 18.6% 31.7% >1s >5s 16.9% 14.7% >15s Skyscraper 160x600 20.6% 37.7% 57.5% Source: Integral Ad Science Media Quality Report 2Q15; *viewability by ad size= top three ad sizes
PRINCIPLE Issuance of A Transaction Principle: 70% Threshold of Deliverability Against Measured Viewable Impressions Given the limitation of current technology which prevent industry from measuring all served impressions, MRC issued a 70% or higher viewability threshold. Threshold based on a 30%-40% variances in campaign level viewability data reported by publishers. If campaign doesn t achieve threshold, publisher will make good with additional viewable impressions until threshold is met. If total display ad market amounted to $16 Billion, with this threshold viewability goal $4.8 Billion of advertisers collective ad spend is lost before their advertisements are even viewed by human beings. Source: MRC
Countless Measurement Players Online Lead To Lack of Standardization for Viewability of An Ad MRC Accredited Measurement Vendors By Platform TV Desktop Mobile C3 One Currency Standard Viewable Display Ad Impressions None To Date Viewable Video Ad Impressions Source: MRC
DISCREPANCIES Due To Lack of Standardization Among Measurement Companies On Average, 4 Out of 10 Campaigns Detail Differences in Viewable Impression Counts Once vendors adapt their production procedures to align with MRC guidelines, MRC believes it is reasonable to expect a discrepancy range of 5-10% when comparing viewable impression counts among the accredited vendors. More viewable impressions = Larger vendor discrepancies Latest reconciliation study (July 2015) revealed that for 4 out of 10 campaigns of more than 100,000 viewable impressions, differences of more than 10% between vendors viewable impression counts were observed. Source: MRC
TOUGHER Some Agencies & Publishers Are Imposing Tougher Standards Than The Industry Has Settled On
Alleged Fraud: Bot Traffic Bots are software scripts in networks of computers that are controlled by a single entity as part of a botnet. The botnet controller can cause the computers in its botnet to execute a variety of behaviors and goals, including advertising fraud, online bank robbery, identify theft, and distributed denial of service attacks. When executing ad fraud, the botnet controller causes the computers in its botnet to render or click on ads, requiring advertisers to pay for a click-through or an ad impression that was never served to a real human. Each bot heist occurs in a matter of milliseconds and is often undetectable to the victim. Bot suppliers repeat these automated heists at the scale of hundreds of millions of times per day, creating enormous scope and reach in their fraud. Bots can make it look easy to reach high volumes of specific audiences. A bot can look like a sports fan, someone looking to buy a car, etc Source: White Ops
Bots are Built to Fool All Stakeholders in the Digital Advertising Supply Chain Sources of Bots Phantom Layer Supplier Bot Script Broker Publisher Advertiser or Agency Phantom Websites Seller of Traffic Broker of Traffic Buyer and Reseller of Traffic and Clicks Sold as clicks, views, video plays, or social media likes Provides what the broker requests, often clicks Service-oriented media companies that do campaign management and audience extension Both premium and long-tail sites and networks Measured impressions Buyer of Media Placements Ad Ad Anonymizing Network or Proxy Botnet Large PPC Network Impression Handlers (platforms and exchanges) Anonymizing Search Engine Traffic Audience Extension or Other Supplier Network Phantom Layer Traffic Mixes with Legitimate Traffic Publisher Publisher Network and Exchanges Networks Exchanges Secondary Phantom Sites Ad Ad Source: The Bot Baseline: Fraud in Digital Advertising; White Ops, Inc. ANA
KEY BOT STATS Bot Fraud Will Cost Industry $6.3 Billion In 2015 More than half of traffic from third parties claiming to lift publishers traffic numbers comes from bots 50% of publisher traffic is bot activity Bots account for 11% of display ad views 3-31% of programmatically bought ad impressions were from bots, averaging 17% 10% of ad impressions from premium programmatic campaigns are from bots Source: WhiteOps Advertising Report 9/14; Global 19% of retargeted ads, ads that directed at an intended audience based on previous web activity are from bots Bots account for 23% of video ad views
BOT TRAFFIC BY DOMAIN CAT Bot Traffic Varies By Domain Category Bot Percentages Finance Family Food Travel 11% 16% 18% 22% Health Home 10% 10% Economy Fashion Society Education Entertainment Business Politics News Tech Sport Science Info 2% 3% 3% 4% 4% 4% 4% 6% 6% 7% 7% 9% Finance, family and food domains had highest percent of bots Source: WhiteOps Advertising Report 9/14; global
BOT IMP BY TYPE Bots Most Prevalent On Exchange Inventory % of Bot Impressions, by Publisher Type Exchanges/Networks Internet Brands Publishers 11% 6% 2% Source: Vindico Adtricity, Full Year 2014; all forms of non-human bot activity
BOT/ $857 Million of Mobile App Advertising Money Is Lost To Fraud 13% of Total Mobile App Inventory At Risk There are already several well-known varieties of mobile fraud: Device emulations Mobile user-agent and location spoofing Fraudulent user-acquisition methods Forensiq has uncovered a new one: Mobile device hijacking Malicious mobile applications pretend to exhibit human behavior by loading new pages or cycling through functions in an app, all of which loads advertising. But these load many more than a normal application would as many as 20 ads per minute and in many cases they do so in the background when app isn t being used, which means ad is never seen. These apps also consume a huge amount of bandwidth and battery life leading to higher costs for owners More common with Andriod app stores Source: Forensiq
ADV STANCE ON Advertisers' Are Fighting Back Click Fraud Adding Clauses In Their Contracts "We've written into all of our contracts that our clients insist on at least 95 percent human traffic and anything less requires a make good or credit," said Barry Lowenthal, president of The Media Kitchen, an ad buying agency whose clients include Victoria's Secret Pink A growing number of companies like MillerCoors and AIG are now starting to force websites and search engines to more aggressively combat click fraud by demanding proof that their ads have been seen by real people and adding clauses into their contracts stipulating that they will only pay for ads that were clicked on by humans. "We don't want to be paying for non-human traffic," said Mark Clowes, global head of advertising at American International Group Inc, the largest commercial insurer in the country. Source: Forensiq
FORMATION To Help Fight Online Fraud, Was Created was created by the American Association of Advertising Agencies (4A s), Association of National Advertisers (ANA), and Interactive Advertising Bureau (IAB) Trustworthy Accountability Group was created to spur transformational improvement at scale across the digital advertising ecosystem, focusing on core areas: eliminating fraudulent traffic, combating malware, fighting ad-supported internet piracy to promote brand integrity and promoting brand safety through greater transparency. announced on 7/21/15 that they will release a new program to block illegitimate and non-human ad traffic originating from data centers. For pilot program they will use Google s database of data center IP addresses and enhance it base upon broader industry intelligence. Source: Tag
Adblock User Growth Rapidly Accelerating Monthly Active Users (Adblock Plugins) (in millions) 181 121 54 21 30 39 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Usage in U.S. Up 48% in past year to 45 Million In 2015 Source: PageFair & Adobe 2015 report; Global
MAIN DRIVER/ADBLOCK Google Chrome Is Bringing Ad Blocking To The Masses With Its Ease of Installing Plug-ins Other Monthly Active Adblock Users By Browser (in Millions) 22 Chrome Firefox 16 126 7 86 44 34 41 48 2Q13 2Q14 2Q15 Source: PageFair & Adobe 2015 report; Global
REASON FOR ADBLOCK Adblock Users Express A Strong Dislike of Advertisements What Is Your Primary, Original Reason For Installing Adblock Software? Remove some ads 30% Privacy 17% Remove all ads 45% Performance 8% Source: PageFair & Adobe 2014 report
AD BLOCKING/SITE CATEGORY Ad Blocking Behavior is a Function Of Audience Demographics: Young, Technically Savvy, or More Male Audience Are Affected More 27% Share of Ad Blocking Rates By Site Category 2Q15 19% 17% 17% 16% 13% 11% 11% 10% 7% 7% 5% 5% 5% 5% 3% Gaming Social Networking Tech/ Internet Education Sports/ recreation Financial Services Auto Search Engines/ portals Restaurants/ Dining/ Food Political/ Social Advocacy Travel Health Presonels/ Dating Real Estate Charitable org. Gov.'t/ Legal Source: Integral Ad Science Media Quality Report 2Q15
REASONS FOR INSTALLING Main Reasons For Installing Ad Blocking Misuse of Personal Data & Increase in Ads Reasons To Start Using Ad Blocking Plug-in If I feel personal data is being misused to personalize ads 50% if quantity of ads increased from what I typically encounter today 41% if marketers don't improve their ability to target ads Source: PageFair & Adobe 2015 report N/A, I would never use an ad blocker 10% 11%
DRIVER/SPREADING AD BLOCK Word Of Mouth Is Primary Driver for Spreading Adblocking Technology Where Did You First Hear About Adblocking? Friend, colleguage or family member 49% Social Media 3% Browsing available addons 20% Browsing web 28% Source: PageFair & Adobe 2014 report
Ad Block Usage Expected To Result in $20.3Billion In Blocked Revenue For 2016 Economic Cost Of Blocking Ads in U.S. (in billions) US Ad Blocking Coast US Ad Spend $68.1 $58.6 $42.8 $49.5 $3.5 2013 $5.8 2014 $10.7 2015 $20.3 2016 Source: PageFair & Adobe 2015 report; ad spend=emarketer
AD BLOCKING/ Ad Blocking Is A Growing Problem For The Industry ADS Source: PageFair & Adobe 2015 report 16% of U.S. online population blocked ads in 2Q15 (Adobe/Pagefair) Milennials (41% v. mid 20 s range for other demos) use them more but are less likely to pay for an ad-free subscription to content (adobe/pagefair globab 2014l) Men are 48% more likely than women to use adblock plug-ins when browsing (adobe/pagefair global 2014) Google chrome is brining ad block to masses, up 51% to 126 million monthly active users (2Q15v. 2Q14) Mobile will facilitate future ad blocking growth Release of ios9 in Fall 15 may be a game changer, as it will allow users to easily install ad blocking from the app store Adblock app can be manually installed on Andriod devlices Firefox mobile browser, which is available directly from Googly Play, allows users to install ad blocking Multiple parties are now working to make adblocking easier on mobile if they are successful, mobile adblocking could become a killer app. YouTube has its subscription model in the works which will offer an ad-free version of its site to paying subscribers. Some companies are fighting back Google, Amazon and Microsoft have paid AdBlock Plus to not block ads on their sites.
PUBLISHERS V. NETWORKS/EXCHANGES Publishers Display Considerably Higher Standards Across the Board TRAQ Score TRue Advertising Quality Score Viewability In view as per MRC standard Ad Fraud Display Ads 604 44.0% 11.2% Publishers: 656 Networks/Exchanges: 584 Publishers: 50.1% Networks/Exchanges: 39.9% Publishers: 3.7% Networks/Exchanges: 14.1% Video Ads 539 37.2% 11.6% Source: Integral Ad Science Media Quality Report 2Q15
CONTACT US If you would like additional video advertising information, insights or analysis please visit our website at www.thevab.com or feel free to contact us directly: Sean Cunningham President & CEO 212-508-1223 seanc@thevab.com Jason Wiese VP Strategic Insights 212-508-1219 jasonw@thevab.com Follow us on and like us on Danielle DeLauro SVP Strategic Sales Insights 212-508-1239 danielled@thevab.com Evelyn Skurkovich Sr. Director, Strategic Insights 212-508-1220 evelyns@thevab.com