Internet companies have had great success selling advertising space, in part because the effectiveness of those ads is supposedly so easily measured. However, marketers, even as they continue to push more of their ad budgets online, are starting to ask for better proof.
A group of large U.S. companies, including Kimberly-Clark, Colgate-Palmolive and Ford Motor have said that by the middle of 2007, they will demand that online publishers hire auditors to check their ad and viewer counts. Analysts say they believe that online ad growth over the long haul will depend on the eagerness of large advertisers like these to shift more dollars online.
Companies are concerned that so-called click fraud may be driving up their ad bills, so they are sharing their proprietary ad data with click-trackers, who try to figure out how prevalent such devious clicks are.
There are a variety of motivations behind click fraud. Sometimes, rings of click-fraud participants click on ads on affiliate ad networks like Google AdSense so that those sites' hosts will make more money (which is sometimes shared with the ring members). Another motivation is to knock a competitor's ad off a site early; many ads are posted with an agreement that they will stay up only until they have attracted a certain number of clicks.Chance of growth
The Internet draws only a sliver of the total spent on advertisements. Last year, Internet ads accounted for just 4.7 percent, or US$12.5 billion, of the $267 billion spent on advertising, according to the Interactive Advertising Bureau, a trade association of online publishers.
The top 50 advertisers spent just 3.8 percent of their budgets in the first half of this year on online ads, excluding search, TNS Media Intelligence data shows. For all other advertisers, the average spent online was 6.8 percent of the budget.
Procter & Gamble, the biggest advertiser in the United States last year, spent $33.5 million -- less than 1 percent of its $4.6 billion ad budget -- on online ads in 2005. General Motors, the second biggest advertiser, spent $110.5 million online, or 2.5 percent of its $4.35 billion total, according to TNS, which does not include search ads in its figures.