Are Industry-Wide Ad Revenues at Risk?

A report from comScore reveals a statistic that might drive the advertising industry to significantly change the way it approaches display advertisements.

The report shows that some 5.3 trillion impressions of display advertisements are served in the U.S., with the highest amount displayed in the fourth quarter — over 100 million more than other quarters. The fourth-quarter figure is also up 78 million from the same time period a year earlier.

What’s perhaps most surprising is the amount of those advertisements that are never seen. There were more advertisements that went unseen than there were advertisements served in any single quarter. Some 30 percent of advertisement impressions are never displayed.

This statistic may not come as too big of a surprise for the advertisers, as comScore reported 31 percent of advertisements weren’t displayed in 2011. However, the increase in advertisements compared to the minor decrease in undisplayed ads could frustrate advertisers…

As companies pour substantial amounts of money into advertising, it could be disheartening to know that nearly a third of that money could be going to waste. AT&T (NYSE:T), Microsoft (NASDAQ:MSFT), and Experian were the biggest online advertisers in the U.S. for 2012, with AT&T having more display ad impressions than the latter two combined.

So, there are clearly some big companies that should have an interest in ensuring a greater percentage of their ads can be seen and better targeted, otherwise there may be a struggle between advertisers and publishers that could drive down ad prices and damage industries — namely online news media — that rely heavily on ad revenue.

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