New Standards in Digital Advertising: "Viewability," "Ad Fraud," and "Brand Safety"

In January 2017, at a conference of the global interactive advertising industry group IAB, Mark Pritchard, Chief Brand Officer of P&G, delivered a speech on "advertising value erosion." This speech, which sharply pointed out the problems with current digital advertising and called for solutions, became a major topic in the Western marketing industry.

Furthermore, in March 2017, an event occurred that brought the "brand safety" issue—one of the three challenges mentioned earlier—into sharp focus. The global advertising agency Avars completely halted its advertising placements on Google and YouTube in the UK, citing "high brand damage risk."

The internet hosts a vast amount of content deemed "inappropriate" for ad placement, including hate speech. When ads appear on content that severely violates a client's policies, it can potentially cause significant damage to the client's brand value.

Much of today's digital advertising is "programmatic," making it difficult to track "where and how your ads are appearing." This creates opportunities for ad value erosion.

In YouTube's case, the actual display of ads on "inappropriate content," such as videos containing hate speech, became problematic. Not only Abbas, but major agencies and clients also announced one after another that they would suspend advertising on YouTube. This served as a catalyst for broader recognition of the issue of ad value erosion.

What's particularly noteworthy about the ad value erosion issue is that these impacts are spreading to Japan almost without delay.

Traditionally, trends in Western ad technology and their associated problems typically took two to three years to permeate Japan. For instance, it took time for RTB (Real-Time Bidding) to become commonplace, and technologies like DMP (Data Management Platform), 3PAS (Third-Party Ad Serving), and PMP (Private Marketplace = automated trading systems limited to premium ad slots) still cannot be said to have fully penetrated the Japanese market.

However, the issue of ad value erosion is an exception, significantly impacting Japan almost in real time. This is likely due less to the homogenization of information in our information society and more to the severity of the problem itself.

 

Ad fraud refers to ad impressions generated by bots. It involves ad views or clicks generated by "machines," not "people," often to artificially inflate metrics like ad impressions.

Particularly on low-quality sites created solely for monetization, bots are often intentionally deployed.

It's often mistakenly believed that "bots only exist to view ads (impressions)," but the risk of bots is also significant for clicks. Ad slots with high click-through rates (CTR) tend to be traded at higher prices. Knowing this, malicious media outlets use "click bots" to artificially maintain high CTR levels.

Bots are primarily classified into two types.

 

In essence, the problem of ad value erosion is also an antithesis to the current digital advertising model, which has placed excessive emphasis on "clicks" while neglecting attention to ad "impressions."

Traditional digital advertising, especially programmatic advertising, has placed its performance metrics on "post-click" actions. The pursuit of post-click metrics—namely, "how cheap is each click (CPC)" and "how cheap is each conversion (CPA)"—provided clients with unprecedented rationality from an ROI perspective.

This rationality fueled rapid market expansion.

Media outlets (publishers) running performance ads also plastered banners everywhere on their sites to meet client demand and boost profitability. Consequently, page loading times slowed and usability deteriorated.

The pursuit of CPC and CPA is not inherently bad; in fact, it has many rational aspects. However, placing excessive importance solely on metrics "after the click" inevitably leads to neglecting the approximately 1,000 "ad impressions" (assuming a CTR of 0.1%) that occur before a single click is made.

It's fair to say that all three challenges of ad value erosion stem from this very neglect of those 1,000 impressions.

robust countermeasures are essential to address ad value erosion.

The first step is to monitor not just "post-click" actions, but also the "ad impression" situation. The mechanism for this—measuring ad value erosion—is called "Ad Verification."

The release introduced at the beginning of this column announced that Integral Ad Science (IAS), the world's largest company in the Ad Verification field, has certified Dentsu Inc. as a partner. We hope to discuss the significance of this partner certification in future installments.

In future installments, we will continue to cover the importance of Ad Verification and Dentsu Inc.'s initiatives to enhance the transparency and integrity of digital advertising.