Online Ads Will Waste $12.4 Billion This Year In the U.S.

U.S. advertisers spend nearly $40 billion a year for online advertisements, but 31% of their ads are never seen. That means $12.4 billion will be wasted on U.S. online ads this year. That’s the average across all sites; on some sites, only 7% of the ads were “in-view,” meaning 93% of them went unseen.

That sounds ominous for the health of Web content. But ad spending is up by over 20% this year. Online ad spending will exceed print magazine and newspaper ads for the first time this year. So, put another way, online ads in the U.S. are still worth enough to brands to waste $12 billion a year on them. But is all this waste necessary?

Dr. Magid Abraham, CEO of comScore, says that today’s display ad market is “characterized by an overabundance of inventory, often residing on parts of a web page that are never viewed by the user.” Online ads may be working overall, but the problem with out-of-view ads “dilutes the impact of campaigns” and puts a “drag on prices” for publishers.

31% of ads in the study were delivered successfully, but they were never seen by a consumer. The user either scrolled past the ad before it loaded or never scrolled it into view. On average, 4% of ads were delivered to viewers outside the desired geography, with some campaigns running as high as 15%. That means some ads were shown to customers in places where the product is not sold.

Even among ads that were seen, 72% of the campaigns in the study ran alongside site content that was “not brand safe.” If you’re advertising cheeseburgers, and your ad runs next to a news article about the obesity epidemic, you’re not likely to get much value out of it.

Online ad growth is projected to slow down over the next five years, but the trend is still positive. It’s a good sign for the Web that the ad market is healthy, but it could be much more effective with smarter technology.

Lead image by TaxBrackets.org via Creative Commons. Second image by vmenkov via Wikimedia Commons.

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