Integral Ad Science Semiannual Review
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1 2012 Integral Ad Science Semiannual Review Key findings from Integral s analysis of the display advertising industry and 2012 Industry Analysis and Key Findings Understanding and analyzing the risk of ad placements is becoming exceedingly crucial. Integral analyzes billions of impressions daily to determine how and where risk is changing, both by category (illegal downloads, adult content) and channel (publishers, exchanges, networks, hybrids*). See page 5 to learn more. The viewability of ads, and how this impacts user engagement, is a constantly growing concern of advertisers and publishers. Integral has examined the length of time users spend on different types of sites, how long ads remain visible on the page, and how the size, orientation, and placement of ads affect these metrics. See the charts on page 4 for more details. Suspicious Activity Detection is becoming essential to running a safe and effective online advertising campaign. Impression fraud is a serious threat to online advertising and potentially affects anyone buying or selling online media. See page 3 for suspicious activity data by channel and category. Integral s TRAQ (True Advertising Quality) Score leverages Integral s proprietary data science to create a single holistic metric that determines the specific value of each individual ad placement. See page 2 to discover the average TRAQ scores of media quality by channel type and content category. *In this Semiannual Review, Integral is including data on a new channel hybrids across the various metrics measured. As the industry grows to include a broader number of partners and inventory, hybrid ad networks are emerging as networks that have a combination of inventory sources that could include exchange buys. Introducing True Advertising Quality (TRAQ) Score Integral is built upon the belief that the key to effective online advertising lies in the quality of the environment and exposure associated with each ad impression. In of 2012, Integral rolled out the TRAQ score, a holistic media quality score designed to be a crucial enhancement to the digital media ecosystem. TRAQ is based on a number of environment and exposure factors, including brand safety, page content and structure, ad viewability, share of view, ad clutter, ad collisions, and likelihood of suspicious activity. As such a comprehensive metric, it will provide value to every player in the industry: buyers, sellers, publishers, and trading platforms alike. Integral has been analyzing the marketplace using TRAQ, and the results are being published for the first time in this review. To discover which ad channels and content categories offer the best media environments, see page 2. IntegralAds 1
2 TRAQ By Channel The TRAQ score is a holistic metric that measures the overall media environment that ads are displayed in on a scale. TRAQ is broken down into a granular and actionable scoring system. As a result, brands are able to target media quality based on custom quality thresholds. Networks had a score of 593; Exchanges had a score of 560; Hybrids had a score of 587. This aligns with the viewability study on page 3, which found that ads placed directly stayed in view longer than those placed through Networks, Exchanges and Hybrids. Average TRAQ scores Scores Direct 720 Exchange 560 Hybrid 587 After analyzing billions of impressions on a daily basis, Integral found that ads placed directly have the highest TRAQ score, with an average of 720. In comparison, Networks, Exchanges and Hybrids had satisfactory ratings all within close range. Category Definitions poor satisfactory good Network 593 TRAQ Score By Category TRAQ scores by content category showed consistent results, with most content categories overall scoring between 600 and 700. Science led the pack with a TRAQ score of 746 with health and careers trailing behind with scores of 713 and 705, respectively. All these scores indicate very high quality in their categories. Style scored the lowest with a TRAQ score of the only score below 500 across the categories, while food and art also had low scores at 568 and 561. Their scores were likely caused by one or two sites with high impression numbers in each category plagued with suspicious activity. As TRAQ is a comprehensive measure of media quality, these results correspond with the Suspicious Activity analysis on page IntegralAds 2
3 Suspicious Activity By Channel In mid-2012, Integral introduced its first to market Suspicious Activity Detection technology; the results of the suspicious activity measurements over and revealed some fascinating insights. Ads placed directly had by far the lowest risk, with only 5% of ads exhibiting suspicious activity and a suspicious activity score of 868 (low risk). Networks earned a score of 663 (moderate risk), with almost 16% of ads exhibiting suspicious activity. Exchanges and Hybrids proved riskier, with scores of 488 and 502, and around 30% of ads with suspicious activity. Greater than Greater than 2 % of impressions of are are suspicious of being of being fraudulent activity. fraudulent For exchanges activity. the For amount exchanges is the amount greater is greater than 30%. than 30%. Suspicious Activity By Category Integral s suspicious activity measurements by content category showed a range of results, with most categories falling between 600 (moderate risk) and 900 (low risk). Shopping had a near perfect score of 980, indicating very low risk for suspicious activity. Religion and pets also had high scores at 913 and 911, respectively. Meanwhile, food (363) and style (457) scored the lowest, with high rates of suspicious activity. As with TRAQ scores by content category, these numbers were likely due to a few specific high impression volume sites affected by suspicious activity IntegralAds 3
4 Ad Viewability Metrics The graph above displays the lengths of time people spend on different categories of websites and how long ads are in view. Sites that offer engaging content, like news, home and garden, business, and finance, keep users on the page for longer. However, ads on these pages stay in view for less time likely a result of users continuously scrolling down the page. The first chart below displays which type of ads achieve long-term engagement with users. More than 40% of ads overall and over 55% of directly placed ads stay in view for longer than one second, but less than 20% stay in view for 15 seconds or more. The second chart shows how viewability is affected by an ad s size, with vertically oriented ads exhibiting the highest percentage of ads in view for at least one second. By Time Frame By Ad Size 56.0% Network Hybrid 42.2% Exchange 41.1% Direct 37.6% 37.8% 28.7% 28.5% 26.1% 22.7% 17.2% 16.5% 15.7% In View >1s In View >5s In View >15s 728 X % average Hybrid 36.2% Exchange 36.3% Network 36.4% Direct 43.2% 300 X % average Hybrid 37.1% Exchange 33.3% Network 39.3% Direct 56.0% 160 X % average Hybrid 51.8% Exchange 48.7% Network 53.7% Direct 50.6% IntegralAds 4
5 Risk Content Composition By Channel The chart to the right shows the percentage of ads served on moderate-risk to very high-risk web pages by channel. Overall, the share of total inventory associated with risky content shrunk between the third and fourth quarters of 2012, from 19.8% to 17.4%. In the third quarter, publishers carried the lowest proportion of high-risk inventory at 2.1%, while networks carried the highest at 5.1%. However, in the fourth quarter, publishers high-risk content increased to 3.6% and networks carried the lowest proportion of high-risk inventory at 3.2%, though they still carried the highest proportion during the two quarters combined. Risk Composition by Level High-Risk Inventory By Content Category During the first and second quarters of 2012, adult content and illegal downloads represented about half of high-risk inventory, but in the second half of the year, they represented only about 40%. In their place, offensive language, hate speech, and alcohol are all on the rise. This increase is likely not attributable to any one cause, but rather a greater volume and variation in inventory during the second half of the year. The chart below displays further breakdowns by content category. Note: this chart comprises the high and very high risk inventory highlighted in the chart above. High-Risk Composition by Category High-risk composition by category 21.5% 11.9% 22.0% 21.1% 1.5% 22.0% 18.6% 19.1% 15.6% 15.4% 15.2% 16.2% 23.7% 6.2% 21.8% 21.9% 4.3% 22.1% 19.4% 18.6% 15.4% 15.3% 15.2% 16.1% 24.6% 1.8% 24.3% 24.4% 0.5% 24.4% 16.9% 21.3% 15.4% 15.3% 15.2% 15.9% 0% 20% 40% 60% 80% 100% Illegal Downloads Adult Drugs Offensive Language Hate Speech Alcohol IntegralAds 5
6 Ad Collision Integral has found that approximately 20% of ads will collide with another ad from the same campaign. Within this subset of colliding impressions, 13.9% of ads collided with 1 other ad, 3.4% of ads collided with 2 other ads, and 5.2% collided with 3 or more ads. The cost of displaying multiple ads from the same campaign to users when Traffic by Device Type against IO specifications can be significant for advertisers; this percentage represents $200,000 on a typical $1 million ad buy. Ad collision is often caused by multiple networks all targeting the same user cookies with the same ad, usually a result of marketers utilizing multiple vendors. 4+ ad collisions 5.2% 3 ad collisions 3.4% Frequency of Collisions 2 ad collisions 13.9% non-colliding impressions 77.4% Industry trends showed that mobile ad spend grew steadily over 2012, and is predicted to continue this exponential growth over While desktop computers and laptops continue to dominate ad impressions at over 90%, Integral s analysis showed a marked increase almost 2x in ads viewed on mobile and tablet devices over and. Ad impressions on mobile devices increased from 1.38% to 2.02%, while ad impressions viewed on tablets increased from 2.56% to 3.88%. Tablet Mobile 1.38% 2.02% 2.56% International Destinations of Non-geo-targeted Impressions 3.88% Ads intended for the US market that end up inadvertently served to users in other countries remains a major concern for advertisers. The table below shows the most common destinations of non-compliant geo-targeted ad traffic over the past year. In previous studies, the UK has usually topped this list, but in this past two quarters, there was a stark decrease in non-compliant traffic to the UK, as it fell to sixth on the list with less than 5% in each quarter. This is likely due to the growing adoption of safety and viewability products worldwide, which has led more advertisers to target the UK intentionally. This leaves a shallower pool of inventory available to land in the UK unintentionally. As non-compliant traffic to the UK decreases, a larger increase of noncompliant traffic is landing in East Asia and New Zealand. From the first half of 2012, non-compliant traffic increased around 7% in Japan and New Zealand; India reached a high Top 15 Countries Flagged for US Targeted Campaigns (as a % of Non-US Traffic) of 8.1% non-geo-targeted impressions in and ranked fourth in likely due to the country s fast-growing Internet adoption. Rank Country Q1 Q Canada New Zealand Germany India Australia Great Britain Nigeria Brazil Netherlands Japan Mexico China Indonesia Ireland Hong Kong IntegralAds 6
7 About Integral Ad Science Integral, formerly AdSafe Media, is the leading global provider of actionable advertising intelligence data for buyers and sellers of digital media. Since launching the industry s first preventative brand safety solution in 2009, powered by constant growth and innovation, Integral has evolved into a global media valuation platform that is essential to the buying and selling of quality media. Integral focuses on a comprehensive solution set that enables advertising to appear in quality environments where they receive quality exposure -- and rewards the sell side for providing quality media. Integral s technology drives improved visibility, efficiency, and ROI for players across the digital media landscape. Its media valuation platform is the only technology that scores and evaluates overall media quality on a page level for the following metrics: Brand Safety Ad Viewability Page Context Ad Clutter Ad Collisions Suspicious Activity Professionalism Integral recently released two first to market innovations: The TRAQ (True Advertising Quality) Score, a revolutionary and holistic overall quality rating leveraging proprietary data science and algorithmically combining the ad environment and ad exposure metrics listed above into a single media quality evaluation. Campaign ROI, an assessment of individual publishers effects on a campaign s conversion the first step towards leaving the industry s flawed attribution models behind. Integral provides actionable solutions, empowering advertisers to easily buy and bid on media leveraging these quality metrics and enabling publishers to be rewarded for providing quality ad opportunities. Integral works with hundreds of global brands, all of the major agencies and holding companies, over half of the top networks and DSPs, and is fully integrated with several major exchanges and trading platforms. Integral is headquartered in New York City with operations in San Francisco, London, Tokyo and Sydney, and are expanding quickly. Visit integralads.com for more information as well as the latest news and product launches. For More Information Rebecca Steuer Senior Director of Communications rebecca@integralads.com Karlie Santucci VP of Client Services karlie@integralads.com Kiril Tsemekhman Chief Data Officer kiril@integralads.com Michael Iantosca Chief Revenue Officer mike@integralads.com IntegralAds 7
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