Americans' Share of Online Global Population is on the Decline

The problem with online advertising isn’t just that it’s ugly, intrusive, and unwelcome (paywall). It’s also that nobody has ever really known whether it works . (It probably doesn’t .)

A new study by GlobalWebIndex, a market research firm, indicates that this problem is getting worse: As more people from around the world come online and access the internet in more diverse ways, the established measurement systems for advertising and other analytics are becoming less and less effective. They overestimate the population of Americans and Europeans online, and undercount users from the developing world, skewing ad budgets and causing misfires of content created to cater to advertisers.

The fundamental flaw is that mechanisms developed for an earlier, desktop-based era of web measurement—cookies, IP addresses, and other signals sent by your device in the background—are not fit for today’s purposes. The report from GlobalWebIndex says these methods are so flawed that they overestimate the number of people online from the developed world and miss an estimated billion people elsewhere.

GlobalWebIndex estimates that over 400 million people in the worldwide log on using virtual private networks (VPNs) that obscure their true location. Another 400 million-odd remain uncounted because they share devices, and more than 150 million aren’t counted because they access the web from mobile devices only, avoiding traditional tracking techniques such as cookies.

As a result, online measurement reports tend to overstate the importance of developed, mature markets, even as their share of the global online population shrinks. Here, for instance is the US:

That means advertisers, lured by the internet’s promise of precise targeting, are spending money on ads optimized to, for example, a British audience, when many of those users may be sitting in Indonesia or Vietnam.

But measurement in these parts of the world is even harder . Companies ranging from Facebook and Verizon to dozens of smaller ad-tech firms hawking tracking technology are working to get around this problem by installing ever more intrusive surveillance mechanisms.

The new mantra is identification : Companies are trying harder to keep users logged in . That way, it doesn’t matter whether the user is on a mobile phone or using a desktop or a tablet or all three, so long as she logs in, identifying herself. It also bypasses the need for cookies, which don’t work with mobile apps. And it then doesn’t matter whether the connection is via a VPN because users who self-identify don’t need to be tracked through their internet connection.

More and more services require a log-in today, helped along the way by third-party companies that plug Google and Facebook’s identity credentials into apps. And it’s easy to see why Facebook has launched an ad platform based on the promise of identification.

This is also the subtext to GlobalWebIndex’s study. It repeatedly cites the failures of “passive measurement techniques,” implicitly suggesting that active approaches—user-reported, such as login data—are the way forward.

( Image via Toria / Shutterstock.com )