Why Bots and ‘Cord Cutters’ Are Bad News For Video Advertising

While the industry is turning to video for better engagement, bot traffic and declining cable viewers result in low returns for video advertising.

video advertising

The more social media matures, the bigger the focus on video content — more specifically, the focus on video advertising. YouTube makes billions, Facebook wants video ads and Yahoo may be trying to poach YouTube stars. But according to an RMG post on AdWeek, there are seven statistics that don’t bode well for video ads, on TV or online.

In the last 12 years, broadcast ratings have declined 50 percent, according to RMG. “The networks are in viewership freefall, yet they’re charging marketers more than ever.”

Five million people have cancelled cable subscriptions since 2010. Despite all that, broadcast and cable CPMs are up five percent compared to last year. Apparently that’s because “[advertisers] think there’s no other option,” according to RMG.

Online video doesn’t fare any better. Not only do consumers skip 94 percent of pre-roll ads when given the choice, but in many cases, ads are not seen at all. Online advertising is already a mess, as Veritasium exposed in a video about Facebook’s useless ad infrastructure recently.

The increasing bot presence online is a big part of the problem. According to RMG, “54 percent of online ads are seen by [a bot].” This means that by default, advertisers are missing more than half their audience just because of the nature of the system.

In fact, as much 36 percent of its impressions will be fraudulent, because online ads are served to useless bot traffic. And what can advertisers expect to pay for these fake, missing views? Pre-roll ads carry an inflated 300-400 percent CPM premium, which is a hell of a markup.

If online video continues to be such a drain on resources and the returns don’t line up, then video advertising could crash. And Facebook’s video ads plan may have been a complete waste of time.

Publish date: April 18, 2014 https://dev.adweek.com/digital/bots-cord-cutters-bad-news-video-advertising/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT