Impact

Impact

How Q4 Creates the Perfect Storm for Wasted Ad Spend – and How Marketers Can Avoid It

Toward the end of every year, marketers and media sellers buckle down in anticipation for what is often the highest-spending quarter of the year.

On the surface, the numbers make sense: consumers spend more and advertisers are pursuing those dollars. But dig a little deeper, and the media numbers don’t align so perfectly. For advertisers to buy more inventory, it must be available. Where does it come from? Beyond that, how does the increased spend actually drive results?

Too often, these questions are glossed over, and marketers are happy to pump budget into a big year-end push. Whether they know it or not, marketers are subject to the optimal conditions for wasting their ad budgets. There’s no reason for marketers to sit back and let their budget burn like a yule log. There’s a way to navigate the perfect storm of lost ad dollars, provided marketers are aware of the following three things.

Mismatched supply & demand

Like most commodities, media operates on the idea of supply and demand. Digital advertising isn’t necessarily tied to production of a good – it’s tied to site traffic. Publishers can’t simply make more traffic in order to attract more brand dollars. And there are certainly more brand dollars available: In 2017, digital was the only marketing channel where a majority of advertisers reported increasing their spending on during the holiday season

To meet demand, and for all that ad budget to be spent, there needs to be more supply. Unfortunately, it’s common knowledge across the industry that demand outpaces supply in Q4, and analysis of the top publisher sites, as ranked by Alexa, does not show a discernible traffic spike. If there’s no clear publisher traffic bump across the open web, marketers should start questioning where their budget goes.

Performance metrics

One reason budgets are flowing in Q4 is that many media buying agencies approach the quarter with a “use it or lose it” mentality. They must spend their client budget before the end of the year, otherwise they’ll risk receiving a smaller budget next year.

While the first three quarters of the year are spent talking about the importance of fighting fraud and hitting performance goals, Q4 ad spend can often go toward poor-performing media. According to Ad Age, conversion rates decline around the holidays, meaning that within the concentrated period that advertisers spend the most, their ad dollars buy the least.

Q4 is the time to closely monitor ad performance to ensure that campaigns hit the designated success metrics, rather than simple delivery or viewability numbers. Yes, the marketplace is more crowded and competitive throughout the season. But marketers need to work with their agencies to ensure every dollar is spent strategically, just as it is the first 75% of the year.

Fraud detection monitoring

One key reason to pay close attention to performance is that fraud becomes a major factor during the holiday season. Fraudsters are more than happy to meet the demand for ad inventory, costing advertisers in excess of $3 billion, according to some estimates.  

With retailers eyeing heavy investment in mobile following huge sales gains in 2017, the channel is particularly ripe for fraud losses. Desktop fraud prevention isn’t directly translatable to mobile environments, especially in-app. Alarmingly, less than half of mobile ad executives say they use traffic validation tools to minimize fraud.

While some may view fraud as the cost of doing business, it’s entirely possible to cut down on the losses by taking a preemptive approach to fraud detection and prevention. Marketers need proactive, direct contact with their fraud protection providers, agencies and traffic partners throughout the quarter, taking the time to ask:

  • What special precautions are in place for Q4?
  • Can I get direct access to my dashboard?
  • Is the system able to detect and optimize away from fraudulent traffic fast enough?
  • What metrics should we be monitoring to ensure fraud is scrubbed out?

Conclusion

Amid the increased opportunity for consumer dollars, Q4 is an exciting and stressful time for any digital marketer. In the rush to outdo the competition, marketers need to take the necessary precautions to ensure that their increased spending doesn’t go to waste. A basic awareness of the supply and demand imbalance — and the potential for fraudsters to take advantage of that imbalance — is the starting point. But by taking a closer look at their performance metrics, fraud detection reports, and traffic validation stats, marketers can ensure that they get the Q4 results they want while avoiding the waste that’s become synonymous with “fraud season.”

Back to Resources