Media ad buying has to look at itself in the mirror. Here’s why

If you buy TV or online ads, last week’s news was sobering — or, alternatively, it was an incentive to thoroughly reacquaint yourself with a nearby bar.

In a nutshell:

–Google announced that about half of all online ads are never seen by humans.

–And AOL/Nielsen conducted a study that found only 23 percent of users who were distracted by a smartphone or tablet while watching TV could recall a brand’s TV ad. (About half of all viewers say they use at least one other device while watching TV.) For undistracted TV viewers, 83 percent could recall the brand’s ad.

These new findings mean that a ton of money has been, and continues to be, wasted on viewers who are not paying attention or on ads that are never seen.

Do these stats mean that media ad buying is in a state of — how shall we say this? — crisis?

“Yeah, it’s completely a crisis,” Forrester analyst Jim Nail told VentureBeat.

“The industry seems to have buried its head, [putting] the onus on the buyer,” he added.

Pay-per-click

Gartner VP Andrew Frank is somewhat more sanguine.

“While [viewability and attention issues are] a challenge for the industry,” Gartner analyst Andrew Frank told us via email, “I don’t think it’s anywhere near an existential threat to the bottom line of advertising.”

Concerning Google’s study, he said, it’s important to note that “Google generally charges advertisers for clicks, not impressions, so non-viewable ads sold under a cost-per-click model are not much of an issue for advertisers — and apparently not for Google either.”

We asked Google what percentage of ads sold on their platform were charged by impressions, but they declined to answer. The Google study also included a large sample from the DoubleClick platform, which can be used to manage other networks. So, Google’s findings apply to online ads in general.

Frank acknowledged that pay-per-click has its own major issue — click fraud. But, he said, Google is investing “a great deal of effort in detecting and filtering” this problem.

“Most Google advertisers have developed the skills to monitor and predict conversion rates from Google click-through traffic and are thus able to accurately assess the value of Google advertising,” he added.

The emerging viewability standard

In addition to pay-per-click, Google also offers an Active View option, where online advertisers only pay for viewed impressions. An industry-wide initiative, “Making Measurement Make Sense,” is also seeking to make viewability more of a standard for online ads.

Ben Hordell, managing partner of digital marketing and media buying shop DXagency, told us that, while Google’s findings are “a bit of a disappointment for those who may have assumed that more ads were being seen,” the company offers alternatives.

If marketers using Google ads are concerned, Hordell said, they should “enable ‘viewable CPM’ or use CPC [cost-per-click] bidding.”

But Forrester’s Nail described the idea of creating a new standard of viewability to replace impressions as “laughable.”

It raises the standard “to the bare minimum” of acceptability in other media, he said.

“In TV,” he pointed out, “you run a 30-second ad, and you get a certificate” that you’ve gotten what you paid for. “If something glitches out, you get a make-good,” a credit for later.

More than YouTube in a week

Concerning the AOL/Nielsen report about attention, Nail said, “people have been talking for over a decade about consumers multitasking [while watching TV], but this is the first time it’s been quantified so dramatically, and it will get the industry’s attention.”

For TV, he suggested that advertisers can increase their brand recognition if, for instance, they have only one sponsor per show, not “17 minutes of commercials per hour.” The AOL/Nielsen study recommended a new Attention Metric be added to the current metrics of frequency and reach.

“TV is in for some disruption,” Gartner’s Frank said, but added that it’s important to keep things in perspective.

“A primetime TV show like CBS’s Big Bang Theory delivers more U.S. ad impressions in a single episode than all of YouTube in an entire week,” he said.

“Even if only a tiny fraction of those viewers actually remember an ad, that still seems to make it worthwhile for advertisers.”