Lack Of Trusted Traffic Data Could Hold Back Online Ad Market
from the numbers dept
One of the supposed benefits of online advertising is that it's much easier for companies to track the effectiveness of their spending than from ads placed in old media outlets like newspapers, billboards or TV -- by virtue of the clickthrough. Advertisers know how many impressions they buy, and can track how many clickthroughs those impressions generated, giving them a pretty good idea of how much they're spending for each action. Of course, this calculation depends on a few things, like accurate data on a site's traffic and ad inventory, and a way to detect and account for click fraud. Neither of these are too readily available for advertisers at the moment, and that could be holding back some companies from shifting more of their ad budget to online media. To that end, a number of large consumer goods companies say that by the middle of next year, they'll demand that online publishers hire outside auditors to vet their traffic statistics and certify they're accurate. There's a lot of skepticism about the traffic numbers claimed by some sites, and advertisers don't want to see an online repeat of the newspaper circulation scandal of a few years ago, where papers were inflating their readership figures with "ghost" subscribers. Part of the problem here is that there's no universally accepted way of counting web site traffic; the use of auditors could represent something of a solution. And then there's the matter of click fraud, which search and advertising giants say they're working on, but a solution remains out of sight. While online ad spending is growing quickly, it still represents just a small percentage of overall ad spending. Unless these issues can be worked out to advertisers' satisfaction, it won't maintain its torrid growth.