By John Murphy, VP of Marketplace Quality at OpenX
Consumers' tolerance for annoying, disruptive, irrelevant or offensive advertising is waning rapidly, buoyed by news articles covering the trend of ad blocking technologies. Digital advertising then, is at an inflection point where its future hinges on all players in the ecosystem, implementing and upholding higher standards for ad quality.
Despite the growing attention around ad blocking and bad advertisements, there is such a thing as a quality advertisement. It's one that is timely, relevant, useful, contextual, minimally invasive, and clearly identified as an ad. On the other hand, bad ads are not only annoying, they are a gateway to issues of malware, auto play video or audio, and forced redirects.
Reports show that instances of malvertising have grown as much as 260 percent in the past year and that 58 percent of malicious software was delivered through ads on popular, trusted news and entertainment websites or apps. No one is immune to the ripple effect that low quality ads currently have across the entire industry. A recent study from the IAB and Ernst & Young estimates that issues of quality, including instances of traffic quality and ad quality, cost the entire US digital advertising industry $8.2 billion annually. In fact, premium publishers like The Huffington Post, New York Times and The Onion have all been the victim of malvertising, making it all the more important that their ad platform partners are preventing bad actors from entering the ecosystem.
Ad quality negatively impacts revenue for publishers in multiple ways. Ad quality issues can not only drive consumers to adopt ad blockers, but can also deter premium publishers from fully embracing tools that optimize their ability to monetize content, such as programmatic exchanges. After all, if publishers can't be sure of an excellent consumer experience on their site, they will be understandably wary of any technology that can't guarantee quality. Paused publishers mean paused revenue for advertisers. The only way to eliminate the threat ad quality issues pose is for all players to commit to raising standards and expectations in the marketplace.
The specific challenge for ad exchanges in ensuring quality standards comes down to an issue of scale. If an online advertising exchange serves one billion impressions per day, an accuracy rate of 99 percent still results in 10,000,000 ad quality incidents, and so on and so forth, per the below chart:
For ad exchanges, the call to action is clear: eliminate bad ads. Raising quality across the entire industry cannot be left to one individual party, it begins with bold and direct action from every participant. All players must commit and adhere to higher industry standards and demand more from their programmatic partners. Publishers, advertisers and industry leaders must require trust and transparency, and take a hard stance on companies that refuse to abide by more stringent guidelines. By keeping user experience top of mind, as an industry we can raise the bar for ad quality to ensure the future of digital advertising.
Industry watchdog organizations and companies are already coming together to create standards for preserving ad quality, such as the Trustworthy Accountability Group, PubNation and WhiteOps. As Nancy Hill, president and CEO of the 4As, stated on collaborating for a cohesive solution to address ad fraud across the digital advertising ecosystem: "Together we can continue to rebuild the trust that is necessary for the interactive marketing industry to thrive."