Soon after the emergence of the digital advertising channel, bankers were quick to embrace a medium that promised better targeting of prospective clients based on particular traits, customized messages to prospects and real-time customer feedback.

Bank marketers especially appreciated digital advertising's analytical benefits, available through social media giants and other tech firms, after having spent years blindly trusting that traditional advertising channels were generating results for the brand.

Now it turns out that the vaunted metrics on which many of we bankers base our digital media-buying decisions aren't so reliable. The tech industry, which promises more sophisticated technology, is so fraught with misleading and deceptive data that it's difficult for marketers to make smart advertising choices. Even the most reputable of tech firms spew unreliable data.

In the last four months of 2016, Facebook reported four separate times that the metrics it provided publishers and advertisers were inaccurate. This acknowledgment was on the heels of Facebook reporting that it had overstated the time consumers spend viewing videos on the social-media site for a two-year period.

Advertisers are shortchanged when traffic is exaggerated. Indeed, Proxima found that up to 60% of global digital spend is wasted every year, and up to 35% of all web activity is fraudulent or artificial. Furthermore, the U.K. marketing consulting firm estimated in the same report that 54% of online ads are not even being seen by a human.

[Digital identity is broken, and fixes are urgently needed. Learn how large financial service and health care companies are tackling the issue — to enhance customer experience, to stake out positions in their business ecosystems, and to manage risk — on our Feb. 23 web seminar. Click here for details.]

To put it another way: a big portion of the $72 billion paid for U.S. digital advertising last year was wasted.

Take Heineken USA, for instance. According to a Bloomberg article, Heineken USA was disappointed with the results of advertising a few years ago. The Dutch brewer examined the return on investment of its advertising spending, comparing TV advertising to online. The company discovered the return on its TV ads was 600% compared to just 200% for digital. The company also found that only 20% of the digital ad impressions the company had paid for were ever seen by human beings. The clicks for which it was being charged were coming from computers — bots — not people.

But the problem is much wider.

In December, The New York Times reported a Russian cyberforgery ring had created fake websites and internet users to "to trick advertisers into collectively paying as much as $5 million a day for video ads that are never watched."

Then there's the recent presidential election, where many blue-chip advertisers were shocked to discover their ads had appeared on partisan sites, such as Breitbart News, a far-right platform formerly managed by senior Trump administration aide Steve Bannon. According to Digiday, dozens of brands — including financial ones like Allstate and SoFi — pulled their ads from the site.

That's a familiar problem. Ad agencies use third-party ad networks or ad exchanges to place client ads on sites that meet demographic or lifestyle criteria. But with so many potential sites to advertise on, it is hard for advertisers to keep track of where their ads are appearing. Third-party agencies claim they must use filtering technology to assess the words and phrases that make up a site's content. Re-targeting ads also follow a user around from website to website, making it even more difficult to monitor where ads appear.

Varying definitions used to describe data is another issue. For example, the definition of whether a prospect has viewed an ad through an "open" email can dramatically differ. Some consider an email being seen in the preview panel as "opened," while others say a consumer must click on the message. Websites may consider a visitor looking at a page for just one second as a page-view even though it may not be enough time to read the content. Site traffic can go up or down 30% simply by changing the analytics program. If a person deletes his or her cookies between visits, he may be classified as a new visitor. Some websites classify visitors as "unique" each time they check in with a different device.

Digital publishers are aware that advertisers aren't getting what they paid for; therefore, they are moving to bring consistency and third-party auditing to the process. But misleading data continues to damage the credibility of digital advertising. Ad tech needs an authoritative body to set standards to which publishers must adhere. The body must establish best practices and restore confidence in what has become a Wild-West-type environment. In the meantime, bank marketers must recognize that the numbers they depend on for buying media are unreliable or perhaps even fraudulent.

Kevin Tynan

Kevin Tynan

Kevin Tynan is senior vice president for marketing at Liberty Bank for Savings in Chicago.

BankThink submission guidelines

Want to contribute to BankThink, American Banker's platform for informed opinion about the ideas, trends and events reshaping financial services? View our detailed submission criteria and instructions.