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Digital advertising is big business. It is widely estimated that in 2016 digital ad revenue will top $150bn.

And though it's hard to find figures for what percentage is display globally, in the US around 50% of what is spent on digital advertising is spent on display ads.

With so much money at stake, it's not surprising that the industry has its share of issues.

Persistent concerns about how ads are delivered, where they go, and how ad views are priced has made it difficult for marketers to know whether to keep investing.

To summarize what's going on in the industry, here are three of the main issues which came up for digital display advertising in 2015 - and what you need to watch out for in 2016.

1. Ad blocking

The issue in 2015

Ad blocking technology has been around for a long time and it has always been controversial. As early as 2010, Econsultancy was writing about how ad blocking was 'killing' site Ars Technica. (Which has somehow miraciously survived!)

But the issue came up again in September 2015 when Apple started to allow ad blockers into its App Store.  

Suddenly publishers felt like a niche technology which threatened their business would be going mainstream.

And this fear was heightened by a report by PageFair and Adobe which shows ad blocking software usage grew 41% year-on-year from Q2 2014 to Q2 2015.

This meant that there were 198m users of ad blocking software which, according to the report, would lead to a $41.8bn loss in online ad revenue by 2016.

What to watch for in 2016

According to a report from Harvard University Neiman Journalism Lab, the number of people using ad blocking on mobile is very low.

Actual numbers were not attributed to any publisher, but Nieman Lab said that most respondents said the share of mobile ads being blocked was around "1 or 2 percent."

Hardly the mobile 'admageddon' predicted.

Neiman Lab does go on to say, though, that desktop ad blocking is still an issue. 77m Europeans and 45m Americans use ad blocking software, according to the PageFair report.

But, new technology is now available which allows publishers to hide content from those who block ads.

And if enough publishers use this technology, this problem may be self-correcting and 2016 will not see anywhere near $41.8bn loss in revenue.

2. Ad viewability

The issue in 2015

In August, the Media Rating Council updated its viewability guidelines:

The current industry standard for a viewable display ad impression is a minimum of 50% of pixels in view for at least one second, and for a viewable digital video ad impression, a minimum of 50% of pixels must be in view for at least two continuous seconds.

And the IAB has agreed with this definition. IAB CEO Randall Rothenberg said in an interview in September that the 'debate side [of viewability] is over now' and that it's up to the publishers to implement the standards.

The end result of this standard will be a new measurement for buying ads, a 'viewable CPM' (vCPM) which allows advertisers to only buy ads which can be seen.  

And, you can already buy vCPMs through Google Display network.

What to watch out for in 2016

But not everyone is happy with the MRC/IAB definition. A survey of senior digital execs by ClickZ in September said that only about a third of respondents believe that the MRC recommendation is sufficient.

Also, Google announced that it is aiming for 100% viewable pixels and advertisers do not have to pay for unviewable ads. And to make that point, Google has now changed all CPM campaigns to vCPMs.

Facebook has also announced the intention to only charge for 100% viewability and will use a third party verification service, Moat, for video ads.

But Econsultancy's Patricio Robles points out in a recent post on the topic that "advertisers should ultimately be basing their investment decisions on whether or not the media they're buying is moving the needle or not."

That is, if you're segmenting your audiences and measuring properly on the back end, then viewability should not affect you very much.  

If the ads aren't showing, you won't get the same results and you'll stop spending money on that platform, presumably.

3. Inappropriate ad placements

The issue in 2015

And finally, inappropriate placements came up as an issue in 2015.

When display ads are bought programmatically, they may end up in a very bad location due to placing by interest or keyword.

This also causes a problem for brands when publishers are not entirely ethical. Here is a Singtel ad appearing on a site which offers illegal streaming of sporting events.

And it's not a small issue for brands.

In a recent AppNexus survey in APAC, the biggest challenge to using programmatic buying more was 'the fear of adverts appearing on undesirable sites' and the third most important issue was 'lack of of transparency on where advertisements end up'.

What to watch out for in 2016

Pixalate, a data platform built specifically to bring transparancy to programmatic ad buying, created a ranking index for the display ad sellers based on the quality of their inventory.

That goes some way to helping big ad buyers know the quality of the sites on which they are showing ads, but still the only way to truly ensure ads don't appear in the wrong place is to manually blacklist the sites that marketers want to avoid.

As Singtel told Mumbrella: “As new sites are constantly introduced, we regularly update our exclusion list to ensure that we only run advertising on relevant and appropriate websites.

"We are reviewing the process to ensure that advertising only appears on suitable sites.”

So...

Display advertising is still a huge opportunity for marketers to raise awareness of products and services in 2016. 

It does have its issues, but it seems that ad blocking, viewability, and even publisher quality are at least being taken seriously now.

How these issues affect brands, however, can always best be determined by the results.  

Even in 2016, nothing will beat high-quality back-end analytics for determining return on ad spend.

Jeff Rajeck

Published 5 January, 2016 by Jeff Rajeck

Jeff Rajeck is the APAC Research Analyst for Econsultancy . You can follow him on Twitter or connect via LinkedIn.  

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