If an Advertisement Runs Online And No One Sees It, Is It Still an Ad?

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1 If an Advertisement Runs Online And No One Sees It, Is It Still an Ad? Empirical Generalizations in Digital Advertising Stephanie Flosi comscore Gian Fulgoni comscore Andrea Vollman comscore This study presents findings from three charter studies involving leading global advertisers in three key geographical regions: the United States, Europe, and Canada. The goal of the research was to identify and better understand the incidence of suboptimal digital campaign delivery as it pertains to viewability, audience delivery, geographic targeting, and brand safety. Through an evaluation of the study findings, several significant empirical generalizations emerged, and this article highlights these generalizations and discusses their implications for the digital advertising ecosystem. INTRODUCTION According to the Interactive Advertising Bureau (IAB), online advertising spend in the United States exceeded $36 billion in 2012 a 15-percent increase over the prior year that represented a growth rate five times faster than all other media combined. Similar growth trends also were seen in Canada (up 16 percent in 2011) and Europe (up 15 percent in 2011). This strong migration of advertising spending to digital across the globe is likely the result of increased confidence in the medium, which has been enabled by technological advancements that make the buying and selling of online media more efficient, and measurement tools that reveal the effectiveness of digital advertising. Today, it is largely accepted that digital is an effective advertising medium for both direct response and branding advertising and that it can lift both online and in-store sales. Still, given the complex nature of the online advertising ecosystem, questions remain about potential sources of online advertising waste and opportunities to leverage digital in an even more efficient manner by improving the accuracy of ad delivery. Until these questions are addressed, it is likely that digital will not be able to achieve its full potential as an advertising medium. To better understand issues associated with digital-advertising delivery and to uncover opportunities for improvement, comscore has conducted research in the United States, Europe, and Canada. The current study discusses empirical generalizations drawn from the research involving dozens of the world s leading marketers. BACKGROUND Across the globe, digital media have become an important component of many advertisers marketing mix. Just as there has been exceptionally tremendous growth in terms of the volume of digital advertising, the digital ecosystem itself also has experienced a profound evolution. From new advertising formats and placement strategies to new delivery systems and advertisement-targeting technology, it has become challenging for marketers and researchers to stay up to speed. Historically, the measurement of digital advertising has not kept pace with these kinds of complex changes. The transactional focus has been on measurement of gross impressions delivered, as opposed to those advertisements that actually were seen by consumers in a particular target segment. In fact, the primary metric used to buy and sell online advertising has been the number of delivered (or served) advertising impressions. As advertising platforms, formats, and delivery technologies 192 JOURNAL OF ADVERTISING RESEARCH June 2013 DOI: /JAR

2 empirical generalizations in digital advertising Empirical Generalization The broad market adoption of holistic campaign validation will allow the online advertising ecosystem to reach its full potential by helping to eliminate impressions that are paid for but never have an opportunity to be seen and affect behavior. A viewability metric will provide the ecosystem with a currency by which to measure campaign delivery and to provide the first truly cross-media-comparable metric for use in effectively building multi-platform campaigns. have evolved, however, it has become obvious that not all online advertisements delivered actually have the opportunity to The empirical generalizations discussed in this study focus on the following core dimensions of advertising delivery: be seen. Moreover, in some instances, they were not accurately delivered based on the buying specifications (e.g., they are delivered to the wrong demographic segment, in the wrong geography, delivered near brand-unsafe content). reach and frequency: the percent of the population that was reached with at least one ad impression, and the average number of advertising impressions delivered per individual; Until recently, it was impossible to target audience: the extent to which validated impressions were delivered to the properly validate delivery across the relevant dimensions because the appropriate measurement technology did not exist. correct demographic target audience; Advanced technology, however, now in-view: defined according to IAB exists to validate whether an advertisement was delivered as intended based on a variety of key dimensions, including guidelines as an advertising impression with at least 50 percent of the advertisement s pixels in the user s viewport for one second or longer; viewability, brand safety: advertising delivery on target audience, sites deemed not appropriate for brand target geography, advertising due to objectionable content brand safety, and considered to be in violation of brand non-human traffic (NHT). safety; The use of validated impressions specifically, impressions delivered in-view, in target geography: measured by country; and the right geography, in brand-safe content NHT: impressions served to non-human and with NHT removed provides a more agents, as per the IAB spiders and bots accurate picture of advertising delivery list and advertisements that were served compared to gross impressions. Furthermore, when validated impressions are to users via illegitimate methods or content. used to calculate validated gross rating points (vgrps), the metric provides a more accurate comparison to traditional GRPs than the broadly used gross digital GRP, which can include wasted advertisements (e.g., impressions that were delivered but never had a chance to make an impact). The current study sought to uncover sources of waste, identify opportunities for improvement, and ultimately enable digital to reach its true potential as an effective and efficient advertising medium. DATA SOURCES AND RESEARCH DESIGN To draw the empirical generalizations, comscore leveraged validated Campaign Essentials TM (vce), an integrated comscore solution for complete campaign-delivery validation and in-flight optimization. Unlike existing single-point solutions, vce provides an unduplicated accounting of impressions delivered across a variety of dimensions, such as advertisements delivered in-view, in the right geography, in a brand-safe environment, and with NHT removed. It also evaluates the degree to which validated impressions reached the correct campaign target audience. It should be noted that while vce typically is used for in-flight optimization, for the purposes of the current study, optimizations were not implemented because the intent of the research was to better understand sources of sub-optimal delivery and identify opportunities for improvement. The validation module of the vce tool has received accreditation from the Media Rating Council. The accreditation includes the measurement of viewability, brand safety, in-country geographic delivery, engagement, and the removal of NHT. This measurement includes certain advertisements delivered via cross-domain iframes, which account for a significant percentage of U.S. display advertising impressions but also have proved particularly challenging to the research industry from a measurement standpoint. METHODOLOGY Census Measurement For every campaign under measurement, a single advertising tag was placed on each creative execution to provide a complete view of campaign delivery. This tag provides detailed information at the publisher-, creative-, and placement-level about impression delivery, enabling the reporting of viewability, geographic delivery, brand safety, and NHT (See Figure 1). June 2013 JOURNAL OF ADVERTISING RESEARCH 193

3 what we know about advertising ii Duplication and inconsistency typically arise when disparate data-collection sources are merged, which can negatively impact the quality of the analyzed data. Because the methodology in the current study relies on a single tag, issues associated with duplicate impression counting are eliminated, offering a more accurate view of campaign delivery. Unified Digital Measurement To understand the extent to which advertisements are delivered to the right target audience, the authors used comscore s global 2-million-person panel in conjunction with census server data. The use of the panel enabled a fuller understanding of the audience that was exposed to each campaign, including demographic information, such as age, gender, household income, household size, and ethnicity and information regarding different behavioral segments (See Figure 1). The use of panel in conjunction with cookie data (as opposed to a solely cookie-based approach) eliminated errors associated with cookie deletion and multiple-user machines practices that can skew results dramatically. The panel used in the current study is the same comscore panel that powers com- Score s audience measurement capabilities, including its Media Metrix service. All panelists have opted in to panel participation and have given comscore explicit permission to measure their online behavior. A unique and critical component of the panel is Unified Digital Measurement, a measurement methodology that merges comscore person-level panel data with raw censuslevel server and advertising-delivery data (collected through tagging) for a complete 360-degree view of consumer behavior at the person-level across markets (See Figure 1). accuracy of delivery of digital media plans for more than 120 advertisers and agencies in 28 countries using its Campaign Essentials service. These studies measured the reach, frequency, and demographic delivery of thousands of digital campaigns. More recently, comscore also has conducted studies using its vce service that involved dozens of leading global advertisers in the United States, Europe, and Canada to better understand the incidence of sub-optimal digital campaign delivery in terms of viewability, accuracy of targeting, geography, brand safety, and NHT. Key details of the vce studies included 40 advertising campaigns for a group of advertisers that included Kellogg s, Kraft, Ford, Roger s Wireless, Volkswagen, Unilever, and American Express; measurement of approximately 3 billion ad impressions; measurement across more than 600,000 Web sites; and 100 percent of the ad impressions delivered in iframes, including a majority of A single ad tag is appended to every creative to provide a complete view of campaign delivery CENSUS in-view Geography Brand safety Non-human traffic cross-domain iframes that historically have been nearly impossible to measure. EMPIRICAL GENERALIZATIONS OF DIGITAL ADVERTISING EG1 Because cookies are deleted regularly by a substantial proportion of Internet users, their use leads to large errors in the measurement of the number of unique visitors to a Web site and in the delivery and measurement of planned reach and frequency for digital ad campaigns. Because of cookie deletion, the use of Web-site server data that leverages cookies to estimate unique visitors to a Web site will overstate the true number of unique visitors. In the United States, this overstatement was found to be by a factor of 2.5. The measurement of the delivery of advertising campaigns based on the use of cookies will underestimate actual delivered frequency by about 2.5 times and overestimate actual reach by the same amount. High rates of cookie deletion occurred in all countries included in the current study. On a global basis, comscore studies PANEL Audience Age Gender HHI HH size Ethnicity Behavioral Segments comscore s global two million person panel is used in conjunction with census data to validate target audience delivery RESEARCH DESIGN Over the last 5 years, comscore has conducted more than 4,000 studies of the Figure 1 vce Methodology Through Single Ad Tag and Unified Digital Measurement 194 JOURNAL OF ADVERTISING RESEARCH June 2013

4 empirical generalizations in digital advertising High rates of cookie deletion occurred in all countries included in the current study. have found that Web site server (i.e., firstparty ) cookies were deleted from an average of 28.5 percent of computers in a month while ad server ( third-party ) cookies were deleted by 32.5 percent of computers. The rate of deletion was higher for ad-server cookies (average of nine times per month) than for Web site cookies (five times per month). In the United States, 28.5 percent of firstparty cookies and 35.8 percent of thirdparty cookies, on average, were deleted in a month, with first-party cookies being deleted six times per month and thirdparty cookies being deleted nine times per month. The lower deletion metrics for first-party cookies likely is because of their higher utility to the user (e.g., they eliminate the need to re-enter sign-in information at some Web sites). Every time a cookie is deleted from a computer following a Web site visit or the receipt of an advertisement, when the Web site server or the ad server sees that same computer again, the server will think it represents a new unique visitor or a new recipient for an advertisement and will count it as a new unique visitor or deliver it an advertisement, thereby leading to over-statement of the true number of unique Web site visitors and an over-delivery of advertising frequency and a corresponding under-delivery of reach. EG2 Measurement errors caused by Internet users deleting their cookies are Because of Multiple Users on a Computer, Cookies Alone Can t Always Accurately Identify who is Using a Computer at any Given Point in Time Percent of computers 3+ Users 15% 2 Users 26% 1 User 59% compounded by other cookie-related problems: the same person using multiple devices (e.g., a person using both a work and a home computer and, therefore, having more than one cookie per person for a given Web site or advertising campaign), and different people using the same computer (resulting in more than one person per cookie). Trying to tie a cookie to a specific individual is problematic. To begin, comscore data showed that the average U.S. computer user utilized 1.29 different computers across work and home locations and, as a result, an individual had a 30-percent likelihood of having more than one cookie assigned to him or her. comscore panel data also showed that 64 percent of U.S. Internet users utilized multiple user machines, which means that a given cookie potentially could be assigned to multiple individuals on that computer (See Figure 2). EG3 Using cookies to target digital advertisements to specific demographic and Percent of people 3+ Users 32% 2 Users 32% 1 User 36% Figure 2 Use of the Same Home Computer by Multiple Individuals behavioral segments typically resulted in inaccurate advertisement-delivery information due to targeting errors caused by cookie deletion, multiple devices per user (which leads to multiple cookies per individual), and multiple users on a given computer (which makes it difficult for an ad server to know which person is using a cookied machine at any point in time). When targeting to only one variable (e.g., women), cookie-based delivery accurately reached its target 70 percent of the time. When two variables were used (e.g., women ages 25 54), the targeting accuracy decreased to an average of 48 percent. And when three variables were used (e.g., women ages with children younger than 18) the targeting accuracy fell to only 11 percent (See Figure 3). Using cookies to target behavioral segments (e.g., visitors to travel sites, viewers of food preparation content, etc.) also is subject to significant error. Across all U.S. campaigns, the current study showed that the average campaign accurately reached the correct targeted behavioral June 2013 JOURNAL OF ADVERTISING RESEARCH 195

5 what we know about advertising ii % of Ads Delivered to Demographic Target % 1 Variable segment only 36 percent of the time, with a wide range of accuracy from 23 percent to 67 percent. EG4 Approximately one in three delivered digital advertising impressions never have the opportunity to be seen (i.e., are never visible to the end user), with the viewability rate varying dramatically by site. For the campaigns measured in the current study, comscore evaluated viewability rates on an individual campaign basis and found that, on average, 30 percent to 37 percent of all served advertising impressions in the United States, Europe, and Canada never were actually viewable by the end user. In other words, the advertising impressions did not deliver an opportunity to see. In-view rates varied dramatically by site, ranging from a low of less than 1 percent to a high of 100 percent. Placing an advertisement above the fold (a term borrowed from the newspaper industry to describe images that appear on a computer screen) generated viewability Low Average High 48% 2 Variables 11% 3 Variables Figure 3 Percentage of Advertisements Accurately Reaching Demographic Target Based on Number of Targeting Variables* *Demographic variables can include: age, gender, household income, and/or number of children in the household. Due to sample size, a meaningful range could not be calculated for campaigns with 3 demographic variables. rates of 48 percent to 96 percent; below the fold messages (images viewable to computer users only after scrolling) resulted in viewability rates of 3 percent to 67 percent. Lack of viewability above the fold typically occurs when a user scrolls past the advertisement (or moves to another page) before the message was fully rendered. Lack of visibility below the fold generally occurs because a user does not scroll down far enough to see the advertisement. Viewability rates tended to be higher on large sites when compared to mid-size or long-tail sites. Even within the largest sites, however, the viewability rate averaged only 74 percent across the top 100 U.S. sites and 63 percent across the top 100 European sites. Within the long tail, viewability rates averaged 61 percent in the United States and 55 percent in Europe. Across all studied advertising campaigns, the average in-view rate hovered at around two of three impressions, meaning one in three impressions were never seen and, therefore, were wasted. In-view rates varied dramatically by site, ranging from a low of less than 1 percent to a high of 100 percent. Importantly, pricing for advertising most often is not derived based on viewability rates. According to the current study, in-view rates varied across sites and placements with a correlation of only 0.19 between viewability and price paid (cost per thousand impressions CPM) for the advertisements (See Figure 4). EG5 The number of advertisements delivered next to unsafe content is not substantial, but the authors of the current study believe that the absolute number of consumers impacted is significant. In the current study, the majority of digital campaigns in the United States (72 percent) and Europe (67 percent) saw some impressions delivered alongside unsafe content, which is defined as adult content, hate sites, or other types of digital content deemed unsuitable by leading advertisers (e.g., spam, malware, child abuse, copyright theft). Fortunately, because of the use of thirdparty advertising-blocking technologies, only a small percentage of overall advertising impressions (0.01 percent) are delivered in brand-unsafe environments. The absolute number of consumers exposed to advertisements in these unsafe environments, however, is substantial enough (5,000 per U.S. campaign and 1,400 per European campaign) to concern many marketers (See Figure 5). 196 JOURNAL OF ADVERTISING RESEARCH June 2013

6 empirical generalizations in digital advertising EG6 On average, geo-targeting of digital campaigns at a country level using IP addresses is quite accurate, with only 4 percent of advertisements in the United States and 7 percent in Europe falling outside of the intended geography. On an individual campaign basis, however, error rates can be high, reaching 27 percent in Europe and 15 percent in the United States. The current study showed that geographic-targeting accuracy diminished as the target market became smaller in area. In such cases, the inability for an advertisement to be delivered in its intended geography was related to limitations in the ability of IP addresses to accurately designate geographic location and errors in complex advertisement buying and selling processes (See Figure 6) An equally weak correlation was also observed between CPM and ability to hit a primary demographic target R 2 = Correlation of In-View Rates & CPM EG7 NHT, including fraud, is a significant challenge for accurate digital advertising delivery, and it is not adequately eliminated by industry blacklists of known robots or fraudulent operators. In the U.S. comscore study, known industry black lists identified between CPM Index % of Ads In-view US 4% of ads were served outside geography. Up to 15% of ads on a given campaign Figure 4 Viewability Does Not Relate to Price Charged for Digital Ads EU 28% 7% of ads were served outside geography. Up to 27% of ads on a given campaign 72% Some ads in inappropriate content No ads in inappropriate content 92,000 people exposed to adult content and/or hate sites Figure 5 Percentage of U.S. Advertising Campaigns with Impressions Delivered Next to Content Deemed Not Brand Safe Figure 6 Percentage of Advertisements Served Outside of Intended Geography in the United States and Europe June 2013 JOURNAL OF ADVERTISING RESEARCH 197

7 what we know about advertising ii 0.03 percent and 0.49 percent of campaign impressions as being delivered to NHT. However, when using comscore s more sophisticated methodology to detect and filter out NHT, a higher 4-percent to 11-percent of impressions are identified as being delivered to NHT. The comscore methodology goes well beyond industry blacklists of known robots. By its very nature, this type of non-human activity is highly adaptable to the countermeasures applied against it, and it is no surprise that published industry blacklists capture only a marginal amount of this activity. KEY IMPLICATIONS AND CONCLUSIONS Given the empirical generalizations derived from this research, there are a variety of key implications that the industry should consider as it relates to the online advertising ecosystem. Among them: In-Flight Optimization of Media Plan Increases Return on Investment (ROI) For advertisers and agencies, holistic inflight validation of campaign delivery provides an opportunity to understand delivery across all dimensions. It also allows time to efficiently make changes to the media plan (e.g., spending allocations across individual publishers) that can improve overall campaign results (See Figure 7). Kellogg s used comscore s Campaign Essentials service to obtain daily feedback of actual campaign delivery to adjust its spending by individual publisher in order to optimize frequency and improve targeting accuracy. Analy sis of Kellogg s digital media plans based on market mix models revealed that the company realized a dramatic improvement five- and six-fold in ROI for two of its brands as a result of in-flight optimization of its digital media plans (See Figure 8). Need for Validation The recent comscore studies demonstrated that each dimension of advertising delivery viewability, audience targeting, geographic targeting, brand safety, and NHT had a substantial impact on whether an advertisement achieved its intended objective. Each dimension, therefore, should be a central component of advertising delivery measurement and validation. Advertisers need to understand advertisement delivery along each of these core dimensions. And they also should require a holistic, unduplicated view of total campaign reach and frequency. To achieve this un-duplicated accounting of delivered impressions, advertisers must find a way to eliminate all the wasted time and error associated with merging disparate data sources. There have been some clear top performers. In total, this campaign effectively delivered to the target and efficiently balanced the exposures. Impressions Impressions Avg. Frequency Targeting Index % on Target Total Campaign Campaign Total % 3.2 Publisher % 4.0 Publisher % 3.1 Publisher % 3.5 There have been some opportunities. In this case many impressions are virtually being thrown away as the wrong audience is reached over and over again. Impressions Impressions Avg. Frequency Targeting Index % on Target Total Campaign Campaign Total % 12.0 Publisher % 8.8 Publisher % 21.7 Publisher % 11.4 Publisher % 15.6 Figure 7 Kellogg s Experience in Optimizing its Delivery of Digital Media Plans 198 JOURNAL OF ADVERTISING RESEARCH June 2013

8 empirical generalizations in digital advertising ROI Brand 1 ROI 2X 5X Year 1 Year 2 1H 2011 Viewability Is Necessary but Not Sufficient Viewability is a critical component of campaign validation. Given the variance in in-view rates across sites and campaigns and the importance of opportunity to see in developing a cross-media comparable GRP, campaign delivery metrics must include viewability. Such a treatment would generate a service analogous to television audience guarantees. In addition to viewability measurement, it is also necessary to validate campaign delivery based on geography, brand safety, and NHT. Eliminating inventory that does not have a chance to make an impact results in more effective/efficient campaigns and less waste for advertisers. It also provides more accurate metrics for market-mix ROI Brand 2 ROI 3X 6x Year 1 Year 2 1H 2011 Figure 8 Kellogg s ROI Impact after Optimizing Digital Media Plan In-flight in 1H2011 models, resulting in better proof of digital advertising effectiveness ultimately bringing more branding dollars to the Internet. Broad Adoption Will Allow the Digital Marketing Industry to Reach Full Potential The broad market adoption of holistic campaign validation will allow the online advertising ecosystem to reach its full potential. It will help eliminate impressions that are paid for but never have an opportunity to be seen and affect behavior. It will offer more accurate valuing of impressions that deliver on their promise across a broad spectrum of campaign attributes. And a viewability metric will provide the ecosystem a standard set of currency by which to value effectiveness, providing the first truly cross-media comparable metric for use in effectively building multi-platform campaigns. Stephanie Flosi is a senior analyst at comscore in the marketing communications group, where she manages product marketing for comscore s Brand Survey Lift suite of advertising effectiveness solutions. She supports various thought-leadership initiatives at the company and has co-authored several comscore whitepapers including Next- Generation Strategies for Advertising to Millennials (2012), Surviving the Upfronts in a Cross-Media World (2012), and comscore s annual Digital Future in Focus reports. Gian Fulgoni is the co-founder and executive chairman of comscore, Inc. (NASDAQ:SCOR). Previously, he was president and CEO of Information Resources, Inc. During a 40-year career at the c-level of corporate management, he has overseen the development of many innovative technological methods of measuring consumer behavior and advertising effectiveness. He is a previous contributor to the Journal of Advertising Research. Andrea Vollman is senior marketing director of advertising effectiveness at comscore. Her research interests span all facets of online and cross-media advertising effectiveness and measurement and evaluation of brand communications and creative messaging. Her work has appeared in the Journal of Advertising Research. June 2013 JOURNAL OF ADVERTISING RESEARCH 199