An article in Adweek reports that studies are being released that online advertising is ineffective and significant amount of money is being wasted on it. It cites the non-viewability of ads, user disinterest, and targeting the wrong demographic. My belief is that because online advertising is such a young and mature industry compared to TV advertising, there is probably a lot of waste as a standardized measurement system to target the right people develops. For example, Nielson OCR provides online ratings for video content, but can't give measurable and detailed ratings of demographics. When a company wants to advertise on an online video and target 18-25 males, they have to rely on an arbitrary percentage of viewers that is provided by Nielson. Therefore, if I want to advertise on Gangnam Style Youtube and I know that 50% of viewers are 18-25 males, then I would have to receive twice the amount of impressions to reach those viewers. In this case, half of my impressions and ads would be wasted. When a system comes along that can dynamically serve ads based on very specific about the user, this will be very powerful. This especially applies to video advertising online which is where the future success and bulk of the market will take off. This is also why Facebook has such an advantage - because when users login and are navigating the site they release a significant amount of personal information to be used to have ads targeted at them. So in response to the article by Adweek, there is significant waste in online advertising, but as measurement systems become more fully developed, this waste will go away. However, there will still always be the importance of viewability of ads and having to counter user distrust and disinterest.
Article: http://www.adweek.com/news/advertising-branding/online-advertisers-getting-ripped-themselves-153689
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