How rampant fraud is impacting digital dollars
Big advertisers who moved money online shift it back to TV
By Bill Cromwell
April 22, 2016
A few months ago, a handful of advertisers who had moved money from television to digital shifted it back again, voicing concerns about digital fraud and viewability issues that made them believe their dollars would be better spent on TV.
At the time it wasn’t clear whether the shift was simply a fluke or a sign of a coming trend.
It’s now looking like a trend.
A growing number of advertisers made similar shifts during the end of first quarter, according to the most recent ad spending report from Standard Media Index, which tracks ad spending on the part of 80 percent of U.S. agencies.
Digital dollars still grew, reflecting the large number of advertisers eager to jump into the medium. But they grew more slowly.
March online spending was up 15 percent, compared to a 20 percent gain for first quarter and 26 percent growth during full-year 2015.
Meanwhile, television was up 4 percent in first quarter, compared to 0 percent growth last year.
James Fennessy, chief executive officer of SMI, says consumer packaged goods and automotive were among major categories moving money back to TV after experimenting with digital last year. Concerns about viewability and measurement sparked the moves, he says.
“There have been massive viewability issues within digital with up to half the reported audiences being fake,” says Fennessy.
“Major brands don’t want to be dealing with fraud issues like this and also saw at the same time their sales dropped off as they took money away from television.”
Broadcast has been the biggest beneficiary of the pivot back to television. It was up 15 percent in March, easing the sting of last year’s 3 percent decline.
“There have been a number of recent studies that have a shown a direct correlation between reduced TV advertising and sales results,” Fennessy says.
“It hasn’t taken long for brands to make this connection and move back into a medium that delivers true ROI.”
Fennessy says this change in spending patterns bodes well for the upcoming upfront.
“The major broadcasters have very large and easily targeted audiences and don’t have the same issues of differentiation that many of the cable networks face these days,” he says.
Elsewhere in media during March, out of home saw an out of character decline. Spending slid 15 percent, a big drop for a category that’s been among the only bright spots for traditional media the past few years.
Fennessy says the drop was sparked by double-digit percentage spending declines by three of OOH’s biggest spenders: insurance, off 55 percent; telecommunications, off 30 percent; and consumer electronics, off 26 percent.
OOH still ended first quarter up 2 percent over last year.
Newspapers had a particularly tough March, off 23 percent, and magazines continued their long, steady drop, off 16 percent.