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Online Advertisers Getting Ripped Off—By Themselves

IRI Report says that brands waste tons of dollars not on bots, but non-interested humans

Photo: Getty Images

A lot of online advertisers are worried these days about getting ripped off—whether they end up buying non-viewable ads that run below the fold of websites to ads that never reach actual human beings. But a new report from Information Resources, Inc. (IRI) which has long tracked the impact of media on real purchase behavior says waste is rampant in online media—not because of deception, but rather, neglect.

Chen Wang, IRI’s principal, new media solutions, who authored the new report, warns that online advertisers are frequently blowing more than half their ad efforts target people who have never bought, nor shown any inclination to buy, products in their ad category. Wang isn’t talking about Coke trying to lure loyal Pespi drinkers. No, he’s saying that too many dog food advertisers are spending lots of money on people that don’t own dogs.

“It is highly unlikely that to expose this particular segment of consumers with an advertising message will result in purchasing dog food or purchasing the brand manager’s dog food label,” wrote Wang.

That sort of thing’s long been commonplace on TV. But given the Web’s wide array of supposedly precise targeting options, it seems like a pretty big miss. According to a recent IRI study of 12 digital campaigns across various categories, non-category buyers represented 51 percent of the audiences reached on average—based on IRI’s in-store purchase data. In other words, more than half of the users reached by these campaigns had never made a purchase in these particular product category. Wang called that “startling.”

After all, these campaigns were supposed to be ‘targeted.’ “A media plan based upon a randomly-selected target audience would have performed just marginally worse in terms of wasting impressions on this particular segment,” wrote Wang. “The findings above occurred for all the campaigns IRI studied, a disturbing trend.”

Wang says that for all the online ad optimization marketers employ, most don’t use basic category targeting. Instead of going after in-market car buyers, advertisers ought to first make sure that their ad efforts reach people who have ever bought a car in the first place, he argues.

These advertisers are “almost totally oblivious to the past purchase behavior” of their targeting audiences, writes Wang. “Marketers are wasting valuable media dollars on consumer segments unlikely to yield an acceptable return.”

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