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The $1 Billion Video Advertisement Scandal: Is Anyone Even Watching?

Posted by jtolman to Marketing TipsEcommerce News on June 16th, 2014

In this world of fast-information and a bombardment of advertisements every minute of every day, there has been a significant shift to quick information channels, namely video.  Merchants, both big and small, have been paying for video advertisements, which tout the target-audience horn and guarantee a certain number of impressions.  Although video ads have been around for nearly a decade, big name brands just started spending heavily on them in 2011, as television programs have proliferated.

“We’re increasing our spend online every year,” said Scott Hudler, a vice president for Dunkin’ Donuts. “To keep our brand relevant, we have to engage our consumers where they are.”

As an online business owner, it would seem common knowledge to jump on board and get your business seen and heard.  In fact, marketers spent $2.8 billion on video ads last year, and eMarketer projects that number will reach $8 billion by 2016.

Too Good To Be True?

Is it possible that there is a piece of the information that is missing?  Perhaps it is too good to be true.  David Segal, reporter for The New York Times, has shed some light on this subject with his recent article “The Great Unwatched.”

Only Half of Video Advertisements are Seen

Many sources confirm that half video advertisements are not seen.  There are many unfortunate reasons that this is true:

  • Advertising agencies promise impressions (or played videos), but they don’t guarantee that anyone is watching.
  • Videos are hidden in tiny players in the corners of pages.
  • Some are buried low onto websites, below the fold.
  • Hackers program bots to generate fake video views.
  • Videos are played simultaneously with other ads.
  • Players may be placed on irrelevant webpages, filled with spam.
  • Reports back to the advertiser show that the ads were opened and viewed, even though half were actually unviewable.
  • Some videos run on auto play.
  • Many ads are run in different countries that speak different languages.

Vindico, an ad management platform company, surveyed over 2 billion video ads over two month and deemed 57% of those to be “unviewable.”


Kevin Lenane is co-founder of Veenome, a video verification company in Arlington, Va. Marketers hire his and other such companies to provide a reliable accounting of where their money is spent.Credit: Daniel Rosenbaum for The New York Times

Marketers are starting to catch on that the online video advertisement system has a few tricks and hacks to keep the view count up.  Let’s leave aside the fact that in this over-stimulated world, many consumers actively tune out advertisements of any sort.  While this is true, bots are being programmed by hackers to rack up the number of impressions.  TubeMogul, an ad tech company, reported that they had discovered 3 new botnets that were generating 30 million fake views each day, earning up to $10 million in one month.

Although these hacks worry marketers, the crux of the problem is that the number of impressions advertisement companies promise exceeds the number of quality inventory, that is, well-placed video players on quality websites.


Sarah VanHeirseele is a vice president at Blue Chip Marketing, which hired a video verification company to track ads. The results were startling, she said. Some ads were running on pornographic websites. Credit: Alex Wroblewski for The New York Times

“[As video ads started catching on a few years ago], all you heard was ‘There’s not enough, not enough, not enough,’ ” says Jonah Goodhart, co-founder of Moat, a video verification company. “So you saw companies go out and embed video players in thousands of websites. And now, anywhere you go on the Internet, a video starts playing.”

Given the fact that nearly $3 billion a year is spent on online video ads and that 57% of them are deemed unviewable, it is safe to assume that American companies are spending around $1 billion a year on marketing that never gets seen.

Until recently, viewability wasn’t even part of the conversation with online video ads.  However, the Interactive Advertising Bureau, a non-governmental association, has announced that starting at the end of June, a video ad will be considered a viewable impression if 50% of the player containing it can be seen for at least two seconds.  That means that if you visit a website and the top half of a video ad is in your screen for 2 seconds, then it will count as an impression, but that’s as far as the rules are going to go, for now.

“Everybody had their own point of view,” says David Gunzerath, a senior vice president at the Media Rating Council, which oversaw the process on behalf of the I.A.B. “Some buyers wanted 100 percent of the ad and 100 percent of the screen. We had people on the sell side who thought that the current standard worked well.”

More companies using video advertisements are demanding a full account of exactly where their money is spent.  There are countless video verification companies that many claim are “well worth the money.”  Once the lights are on and you can see clearly where your advertisments are, it will make it easier to clean up.

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