With rising demand of mobile, online video and social media, the digital ad space has seen massive growth in ad dollars. This should be no surprise considering how deeply integrated we, as consumers ourselves, are involved in the digital world.
In Hong Kong, widespread adoption of smartphones and advancements in mobile advertising technologies will place pressure on traditional advertising channels. Digital ad spending is expected to increase from an estimated US$560.8 million at the end of 2016 to US$748.5 million by 2020, where digital will represents 24% of the overall ad market.
On the whole, as a region, we can expect that the government's dedication to connectivity and smart nations will spur this growth trajectory in time to come. That itself is an opportunity for advertisers to tap into the growing market of urbanised middle class consumers.
But, not everything is rosy in the advertising world
A report from the World Federation of Advertisers estimates that approximately US$50 billion worth of ad dollars would be lost to advertising fraud by 2025. Simply put, these advertisements never truly reached human viewers. If left unchecked, advertisers could stand to lose a staggering US$150 billion by that year.
This calls to question a fundamental issue of how we measure viewability – what defines it and how then should advertisers measure and pay for it. At Spotify, we partner with viewability companies like MOAT and IAS that offer measurable standards we can use in our campaigns; however, this is an action that many brands still do not value as a key investment.
Ad viewability is particularly challenging for online video ads and most advertisers do not fully understand how their ad dollars are being translated into results. For instance, many digital players in the market charge by views; video starts, advertisers pay. This is regardless of the multitude of factors that contribute to the user’s ad viewing experience. Do you know if the audio is on? Are the users logged in? At what point can you be sure that your message has been received by the viewer? So many questions, but so little that the current metrics have to offer.
Too little, too late?
Advertisers have only just begun to acknowledge the need for a credible paying metric. Yet, what has plagued the system since then has been further exacerbated by the advent of adblocking tools; the threat of sophisticated cyber frauds - with ad fraud being one of the largest forms of online crime; and needless to say, little transparency and poor KPIs that has resulted in an overall loss of ad dollars across multiple platforms.
Ultimately, it might be that complacency is to blame. Our reliance on a system that has promised easy eyeball numbers or perhaps the unwillingness to take action on the problems we do not see. Whatever it may be, we are now faced with the hard truth – that non-viewable, fraudulent impressions can no longer remain the norm; in fact, they need to go.
Moving forward - transparency and zero fraud
As businesses evolve in the digital world, metrics and standards must continue to adapt to the needs of the industry to create a more transparent ecosystem. Thankfully, these problems also signify what needs to be changed and where the industry needs to move towards in order to reap the benefits of mobile and connectivity. Full disclosure on cost, zero percent fraud and no ad-blocking might seem like a tall order but these are the standards that must be established today and now, lest the ship sails to another sea.
For the industry to survive and continue to grow, one simply cannot hide behind technology and wallow in ignorance. The industry’s credibility and future is at stake and if no one acts now, who knows how much more we might lose.
Contributed by Sea Yen Ong, vice president of sales for Spotify, Asia