The Fraud of Digital Advertising

Click Rates

Advertisers spend the most money on digital advertising ($111 billion per year).  Digital advertising spend is the fastest growing advertising segment.  Google and Facebook control 90% of digital advertising.  60% of digital advertising is fraud.  George Simpson in his article, Is Ad Fraud Inevitable? writes,. “Agencies and brands simply write off fraud as the cost of doing business online. That is, until someone comes along and says, you know, you’re wasting 60 cents of every dollar, or calculating that every ad dollar lost to fraud costs.”

So today’s research fact reveals after the fraud comes the CLICK.  Overall consumers click .09%. (See the above chart)

We can now create a digital advertising algorithm to help us understand what is going on:

  • Pay to reach 1,000 shoppers online
  • 60% fraud = reach 400 shoppers
  • .09% click
  • REACH – .36 shoppers after spending to reach 1,000
  • Pay $45 per click.  Not sale.  Not customer. But click.

Local Media:  Local media has tried to compete by switching to digital advertising.  This has proven to be a catastrophic mistake.  Local media trying to compete digital advertising is like the local high school basketball player trying to play against LeBron James, the NBA superstar.

Local media

 

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