Ad fraud on apps and the web is an endemic problem. Advertisers, publishers and agencies are engaged in a war against digital ad fraud bots. In a reaction to ad frauds, recently P&G cut $140 million and Chase slashed the number of websites carrying their advertisements by almost 99% without experiencing any change in business outcomes.
Ad fraud is the practice of serving digital ads that have zero chance of being seen by a human user or are intentionally misrepresented. Nonhuman, or bot, traffic use tactics like rotating user agents, random proxies to generate fake pageviews and fake clicks, even fake form submissions and, more for paid ad impressions. In 2018, nonhuman fraud traffic in digital advertising is estimated to cause losses of around 19 billion U.S. dollars to advertisers worldwide. There is also intentional misrepresentation in the form of human-based traffic fraud generated by publishers, who hide ads by “ad stacking” or “impression stacking,” For example, impressions can be generated when web sites are loaded as pop-unders on porn and piracy sites, or through domain spoofing. It is a significant problem that affects multiple formats, such as display and video.
Fraud Dollars Go Up Along With Ad Dollars
Adform, the ad tech company exposed a massive online advertising scam in 2017 that could be costing businesses, primarily in the U.S., almost $1.3 million a day. The new form of bot named, ‘HyphBot,’ was active through at least 14 different exchanges and SSPs, infecting multiple networks and generating billions of requests and fake traffic on over 34000 domains, including premium publishers and a million different URLs. It is three times the size of the Methbot scam discovered in 2016 by White Ops. Now work out the math and it is easy to conclude that online ad fraud has cost companies worldwide billions of dollars in wasted spending. In fact, an estimated $16.4 billion has been lost to ad frauds in 2017.
Fighting Ad Fraud
Spurious methods are being used to trick brands and their agencies into buying advertising space on these fake websites that don’t exist, or that the sellers can’t really access. Earlier ad fraud was limited to small and low-end, black hat publishers defrauding visitors into clicking and quickly leaving, now it is falsified websites designed to look like premium publisher inventory. What it boils down to is that nearly half or more of paid online display advertisements have not been seen by humans. According to Cnet, not viewable impressions can reach as high as 85 per cent. According to Google, only about 44% of views are from human, the rest is from bots, hackers, spammers and other impersonators.
Brands inadvertently waste money and publishers miss out on ad revenue. Because of programmatic advertising there are thousands of long tail sites in the system and the speed and volume of automatic ad spending online, makes it very difficult to check if an ad ran where a seller promised to run it. But it would be wrong to pin the blame for ad fraud on programmatic advertising because it existed well before automated ad solutions appeared. In fact, quite the opposite, artificial intelligence and use of Big Data can actually detect ad fraud and help advertisers avoid it & optimize ad spend. And let’s be honest, digital is still the most accountable of all the major media forms available.
Advertisers should be actively checking for fraud when it comes to evaluating ad campaigns and take a publisher-centric approach to campaigns. It makes sense going through website placements in private marketplace deals and even in direct buys in order to prevent wastage. Avoid proxy metrics and easy-to-fake campaign goals, like impressions and clicks for actual business metrics, like signups, sales, and subscriptions. Keep an effective blacklist of fraudulent sites by updating it regularly and being specific (micro-blacklisting) about how you block. Advertisers should monitor and demand transparency from publishers when it comes to traffic sourcing, requiring all third-party traffic to be identified. Always eliminate the traffic with a high percentage of bots.
Many publishers have also reduced or eliminated traffic sourcing and audience extension, as they lead to fraud ads. Good publishers are also using filters to pluck out the obvious data center traffic and named bots in order to prevent advertisers from being exposed to sources of general invalid traffic. And some publishers are also employing initiatives like ads.txt to prevent malpractices.
Digital marketing budgets will continue to expand and marketers can enjoy increased investment in digital channels by eliminating fraud and improving advertising campaign performance. Even publishers would benefit from more revenue generated, which would in turn lead to the creation of better content. The only losers would be the fraudsters siphoning billions of dollars from the ad industry. When it comes to the subject of ad fraud, it is always best to be prepared in order to stay ahead of the bad actors.
If you are keen to avoid ad fraud and protect yourself, get in touch with expert marketing consultants at DirectiveGroup. We ensure good business outcomes.
