Spotlight

Invalid traffic casts a shadow over 2024, while consumers complain that digital advertising lacks relevance to them

Welcome to the December edition of Spotlight, as the year draws to a close, why not wind down with Novatiq’s roundup of the hottest stories in digital marketing and adtech.

What we have for you today: Invalid traffic rates set to spike, consumers rail against irrelevant ads, and traditional data signals start to fade.

Pure-play digital advertising set to grow in 2024

According to forecasts by Magna, global ad revenues will have climbed 5.8% this year to hit $889 billion, before jumping 7.2% in 2024 to $914 billion, largely off the back of easing inflationary pressures and the return of major cyclical events including the Olympics.

Pure-play digital, looks set to benefit the most from growing ad spend.  Magna predicts that ad sales in this area will increase 10.5% to $587 billion in 2023, accounting for 69% of all ad sales. Digital pure play is also forecast to be up 9.4% in 2024.

Spiking invalid traffic rates will damage ROI

With ad spend rising, mitigating ad fraud and invalid traffic will be more important than ever. However, new research predicts that next year advertisers risk wasting in excess of $71 billion on fake or invalid traffic – a staggering 33% increase from 2022. According to analysis from Lunio, 8.5% of all paid traffic on major internet platforms is fake. Figures from the ANA puts the number much higher, suggesting that 35% of each ad dollar spent is wasted on non-viewable and invalid traffic impressions and Made for Advertising websites.

To avoid these losses, brands should leverage new approaches to addressing ad fraud including technology that can guarantee advertisements are delivered to verified web users in every single instance.

More needs to be done to win consumers’ attention

Of course, serving ads to real people is only half of the battle. The other half involves ensuring that people find this content relevant and engaging. Research from Treasure Data suggests that many brands are falling short in this regard, with 88% of UK consumers saying that half or less of the content they receive is relevant to them. Nineteen percent claimed absolutely none of the content they receive is of any relevance at all.

These findings chime with a study from Bango, which found that 32% of consumers in the UK and the US believe digital advertising to be “random” and 27% as “intrusive.” Two-fifths reported that they see irrelevant ads online every day, leaving them feeling “bombarded” and causing half to unsubscribe from or block the brands responsible.

Traditional approaches to data-driven personalised advertising appear to be falling short. It’s time to try something new.

Fading signals exacerbate the advertising relevancy challenge

Part of the problem is that the signals advertisers have historically used to drive personalised programmatic advertising are on the wane. The deprecation of third-party cookies is well understood (although many in the industry are still unprepared for the removal of tracking cookies from Chrome, which will take place next year).

However, other signals are on the wane too. Recently, for example, Mozilla announced that it will offer Firefox users a choice on whether or not to include tracking information from copied URLs. This move follows the iOS 17 update that also blocked user tracking via URLs. If URL data is lost, probabilistic IDs will become weaker, and the industry will need to look elsewhere for data-rich alternatives for audience verification and campaign activation.

Moving on from user tracking

What’s clear is that a workable alternative is urgently required. Google is, of course, working on its Privacy Sandbox as an alternative, and has just published guidance to help publishers and service providers ready themselves for third-party cookie deprecation to minimise disruption.

Google is expected to commence cookie deprecation from January 4th. However, in a blog post Google explains how users in the initial test group for deprecation can temporarily re-enable cookies on specific sites if they are experiencing issues.

It’s important to note that there is also growing concern in the industry that the Privacy Sandbox, may devalue open internet advertising. Indeed, the Trade Desk recently rejected the Privacy Sandbox on these grounds.

Fortunately, the broader adtech market has responded with other options for the post-third-party cookie world. Brands and publishers alike can leverage privacy-first alternatives such as telco-verified IDs to personalised advertising at scale that are ideal for verifying and engaging audiences on the open web in real-time.

More from Novatiq

If you find yourself at a loose end this holiday season, why not drop by the Novatiq blog. Here’s the three most-read blogs from the year to get you started: Telco business models are changing: Here’s how, digital ad fraud statistics that every brand should know, and Adtech 101: everything you need to know about the adtech value chain and opportunities for telcos. If you’re hungry for more, you can also check out our latest post: protecting privacy in an AI world.

Enjoy the break and wishing you all a very happy New Year from everyone here at Novatiq!

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