How Advertising Fraud is Killing Your Marketing – and How to Save It
Today, fake Internet traffic schemes are as common as bad drivers in Florida. Sadly, getting the short shrift on advertising exposure is pretty commonplace. While some B2B marketers may not know the technical details of how this happens, the bottom line is screamingly clear: Shady characters are getting their jollies, and advertisers (and publishers) are paying for it.
Draining marketing budgets and skimming publishers’ profits are fairly mortifying on their own. But there’s another disturbing layer to the story: Ad fraud is killing trust – not just between brands and buyers, but also between media agencies and advertisers.
However, B2B marketers don’t have to be powerless tokens in this illegal scheme. There is a way to foil digital fraudsters – while repairing trust throughout the advertising supply chain.
It all begins with data.
Where the Wild Bots Are
Believe it or not, ad fraud is well on its way to becoming one of the largest organized crime businesses in the world, second only to the drug trade. In fact, the ANA predicts $7.2 billion will be lost globally this year as a result of nonhuman traffic. In advertising terms, this translates into three to 37 percent of bot-generated ad impressions. And the World Federation of Advertisers (WFA) predicts ad fraud will hit $50 billion per year by 2025.
Why on earth can’t this be stopped? Well, defeating ad fraud involves more than just shutting down a few fake sites. Even legitimate sites (with huge ad exchanges and fraud-busting teams) get caught in snares set by online criminals. These scoundrels are sophisticated. When they cook up fraud, they do it at the code level – something beyond your garden-variety marketer’s tinkering ability.
Just how sneaky does ad fraud get? Expert Dr. Augustine Fou identifies two main types: impression fraud and search click fraud. At the heart of both varieties are “bots,” or software applications that run automated tasks over the Internet.
- Impression fraud occurs when bots are used to repeatedly load pages, mimicking human browsing behavior and generating fake ad impressions.
- Search click fraud happens when bots type keywords in search boxes, causing search ads to load; then, these bots click on the ads, generating cost-per-click (CPC) revenue.
Soft conversions (via clicks, views, etc.) are at higher risk for ad fraud because it’s much easier for bots to replicate this activity than, say, filling out a registration form.
Online criminals like programmatic placements because they’re automated and less susceptible to scrutiny. And if these programmatic purchases are for rich media (such as video), so much the better, as they carry a higher cost per thousand (CPM) and promise a bigger pay day to fraudsters.
We may like to believe that this illicit activity happens far away from us, originating from criminals’ computers in a remote country. But actually, most bots come from residential IP addresses, many of which lead to unaware consumers. Often, bots are inadvertently installed when users click on a seemingly legitimate ad, download a toolbar, or install a browser extension. Once a computer is infected, bots run silently in the background, acting uncannily human by visiting multiple sites and collecting cookies.
How good are these impersonations? When asked, “Are you a bot?” many bots know how to answer this question.
A Triple Fail in Trust
Considering that digital scams siphon half of the dollars out of the advertising ecosystem, it shouldn’t be a surprise that relationships get seriously damaged along the way.
A thumbnail overview of the fallout – and each party’s grievances – goes something like this…
- Buyers, already annoyed by irrelevant and invasive ads, become haplessly complicit in ad fraud; they fight back with ad blockers.
- Advertisers wonder how many actual human beings actually see their ads; they grow suspicious of programmatic placements in general (and media agencies that buy them).
- Digital publishers (even premium ones) lose credibility with skeptical advertisers and, in the process, lose valuable revenue.
This fatal circle of lost confidence resembles the housing market disaster in the mid-2000s, says Rebecca Mahony, CMO at Teads.tv. Back then, banks sold “prime” mortgage bundles to investors. However, too many of these AAA packages were surreptitiously laced with junk assets. A similar lack of transparency plagues today’s ad tech industry, Mahony says. Advertisers shouldn’t assume the actual media placements match their audience specs, as ad fraud injects plenty of “subprime” (lower-quality inventory) into the mix.
Encouragingly, more marketers are demanding more transparency from publishers and media-buying agencies. According to a new study by the World Federation of Advertisers (WFA), 90 percent of advertisers are reviewing their programmatic advertising contracts, looking for reassurance that they’re receiving the right value for their spend.
Procter & Gamble, the biggest advertiser in the U.S. and the world, is also reviewing its media-agency contracts in detail, but on January 29, Chief Brand Officer Marc Pritchard took it one step further. During the 10th Annual IAB Leadership Meeting, Pritchard announced that P&G would no longer pay for any media suppliers that have not adopted Media Rating Council (MRC)-accredited third-party verification and viewability metrics. In addition, Pritchard delivered a compelling call to action for the advertising industry, insisting that any entity touching digital media must certified by the Trust Accountability Group (TAG) during 2017 to help ensure that it is free from fraud.
With advertising powerhouses like P&G throwing down the gauntlet, B2B marketers may be more likely to keep a vigilant eye on their media placements. But is it advertisers’ job to fight ad fraud? Clearly, multiple players in the digital supply chain have been victimized by it. Who should be responsible for combating it?
According to a study conducted by the Association of National Advertisers (ANA), “the agency” should be the top fraud fighter (36 percent), followed by “all parties” (26 percent), “the publisher” (21 percent), and “the advertiser” (17 percent). Although advertisers were the least likely to be named responsible in this group, the advertiser-participants who did choose this answer said they experienced lower levels of fraud themselves.
A coincidence? Not likely. By taking a proactive, preventative stance against ad fraud, marketers are essentially protecting their investments.
Repairing Broken Confidence
The first thing B2B marketers can do to combat ad fraud is to establish clear and open communication with their media-buying agencies. Don’t play the blame game, but follow through on your due diligence. The ANA recommends asking tough questions, like:
- What third-party traffic validation tools do you use? Empower your agency to deploy bot and domain detection technologies to track traffic sources.
- Do you require publishers to identify all third-party traffic sources? Your agency can require that this language be built into requests for proposals (RFPs) and insertion orders. You can also reject sourced traffic and run your ads on organic site traffic instead.
- Do you use blacklisting? If so, how often do you update your list blocked traffic sources?
- What type of data do you prefer to use for B2B targeting? Probabilistic, deterministic or a mix of both?
The types of data a media-buying agency uses to identify potential customers directly impacts the effectiveness of the digital advertising. Probabilistic data uses anonymous data points to identify targetable prospects. These pieces of data are fed into a proxy model, which then spits out a percent probability that the user matches a desirable buyer profile. Deterministic data is gathered from verified sources and vetted for quality. It isn’t derived from assumptions. It’s collected from real business professionals – aggregated, edited, and verified.
Deterministic data offers a clear advantage for marketers, because it helps to confirm that prospects are actual human beings (and not bots). Based on this benefit alone, it’s easy to see why 32% of marketers planned to use deterministic targeting in 2016.
However, the value of deterministic data goes beyond verifying buyers. It’s also helpful for identifying legitimate (and fraudulent) businesses throughout the digital advertising ecosystem.
Great strides have been made to foster trust throughout the online advertising supply chain, with TAG leading the way. (Disclosure: Dun & Bradstreet is a TAG partner.) TAG is a joint marketing-media industry program designed to create transparency in business relationships and transactions. As part of its charter, TAG qualifies digital advertising industry participants through a proprietary background check process powered by Dun & Bradstreet. After companies are confirmed as credible digital ad industry participants, they’re listed in the TAG Registry. Registrants also receive a TAG-ID, a unique global identifier certifying that their business is legitimate. Using TAG-IDs as a guide, B2B marketers can choose to work with only credible businesses, reducing the money flow to fraudsters in the process.
Accountability programs like TAG’s are one way to enhance trust between B2B marketers and media-buying agencies. Indeed, these advances bring us closer to a day when advertisers pay only for verified impressions.
The Price Tag on Trust
B2B marketers want to know they’re getting the most of out their advertising dollars, but because of fraud, they’re realizing that a low-price placements via programmatic won’t necessarily meet their performance expectations. In response, many publishers are upping their game in fraud detection and improved viewability.
While this gives B2B advertisers added assurance that their money is less likely to be wasted, it also decreases the inventory pool available to programmatic advertisers. The result? Higher prices. Indeed, by 2018, the cost of display ad inventory bought using programmatic technologies is expected to increase by as much as 20 percent across North America.
Will B2B marketers be willing to pay? It depends on how transparent their relationship is with their media-buying agency...and how much confidence they have that their specifications (including the audience they want to reach) will be followed.
To be sure, publishers’ detection systems are getting better at catching instances of ad fraud. Google blocked 1.7 billion bad ads in 2016 – more than double the number it nixed in 2015. But we have to remember that, even as these systems get smarter, so do the criminals that aim to outsmart them.
Technology won’t deter ad fraud on its own. As Dun & Bradstreet’s SVP and Chief Data Scientist, Anthony Scriffignano, Ph.D., says, “Machine learning isn’t really about learning.” Technology can help detect fraud through data analysis, but it can identify these instances only by using the conditions/rules that we dictate. In other words, if we don’t know about new fraud tactics, existing algorithms aren’t likely to flag them. Given this, it makes sense for publishers to invest in analytics talent.
How big should this investment be? Avinash Kaushik, digital marketing evangelist at Google, offers his 10-90 rule as a guide for web analytics investment: For every $10 plunked down for technology, $90 should be spent on “big brains” to analyze the data. The cost for data science expertise may, in fact, be proportionally higher. But without this human layer, actionable insights about fraudulent activity may remain elusive, and everyone in the digital ad supply chain (including buyers) may continue to feel cheated.
There Are No Shortcuts
For B2B brands to earn back buyers’ trust, it will take time, patience, and continuous effort, to say the least. According to the 2017 Edelman Trust Barometer, macro events (such as rapid technological change) are feeding overall consumer uneasiness, which, in turn, translates into buyers’ distrust of businesses. In fact, Edelman finds that we are experiencing the largest-ever drop in global trust across institutions of government, business, media, and non-governmental organizations. Astoundingly, in this climate of distrust, people are more prone to believe “fake news” shared by their peer network than content created by brands or journalists.
Trust comes more easily when people play by the rules. The stickler here, however, is that, in digital advertising, more “rules” are in play than federal laws. Buyers themselves have covert personal limits and unspoken rules of engagement; once B2B marketers violate these boundaries, marketing feels creepy and intrusive – and ripe for blocking.
But instead of addressing the causes of ad blocking, some publishers (and B2B brands among them) are treating the symptom. Focused on ensuring ad viewability, these media outlets adopting anti-ad-blocker technologies or prohibiting site visitors with ad blockers to access online content.
Rather than repairing trust, these tactics ignore it altogether. In the end, what is accomplished when publishers force unwanted advertising messages through? For marketers, it boosts viewability; for publishers, it pulls in more revenue. But for many buyers, it leaves a feeling of unlawful trespass.
Buyers don’t have to listen to what B2B marketers say. They can simply rely on their own experience (or their peers’ sense) of a brand. In a digital age, B2B brands are competing against far more than firms with similar offerings. Because they’re competing for buyers’ attention, viable contenders range from Spotify and Candy Crush Saga to Skype IM’s and text messages from Mom. B2B marketers have a small window of opportunity to deliver the “right” content, at the “right” time via the “right” device. Of course, all of these “right’s” are relative. And in a highly networked, increasingly interconnected world, one buyer’s dissatisfying experience can amplify to a deafening roar.
When marketing to any buyer, there are high costs in getting it wrong. When this buyer is already distrustful, even higher stakes are at play.
B2B marketers must fight ad fraud and resuscitate trust. Making sure their advertising transactions are conducted with legitimate businesses is a good first step. Coming in at a close second is ensuring that ideal buyers show up in their advertising segments.
Regretfully, these steps won’t improve the way Floridians drive, but they will help pave the way to a better relationship between commercial brands and their buyers.