By Adam Wakefield
An important step in fixing a problem is understanding the scale of the problem itself. When speaking of online ad fraud, the scale of the problem equates to billions and billions of dollars.
The size of the problem
The same report states the cost impact of malvertising, the use of digital advertising to spread malware, totalled $1.1 billion in the same period while the cost impact of infringed content was $2.5 billion.
All together, the cost impact of these different forms of online advertising fraud was $8.2 billion, a gargantuan sum.
Mike Carter, head of the
IAB South Africa’s Media Innovation Council and special project director at digital media firm
MaxAxion, says when considering online ad fraud, two areas should be considered:
• Digital advertising – the moving of advertising creative through the Internet until it reaches a consumer’s browser; and
• Digital media supply chain – Moving content through the Internet until it reaches a consumers browser.
Within these two areas, Carter says online ad fraud activities with high degrees of activity generally fall with infringed content, malvertising and invalid traffic.
Carter says there are several forms online advertising fraud takes, noting that the rise of programmatic buying and selling has “expedited the issue on a massive scale”.
The examples he gives are invalid traffic, fraudulent traffic brokers, fraudulent sites, masked URLs in bid streams and hidden ad units.
“Invalid traffic is non-human traffic, fake advertising impressions that are neither generated by real advertisers nor received by actual consumers. Fraudulent traffic brokers are when publishers need to increase traffic and go to a traffic broker site who guarantees volumes of highly qualified users,” Carter explains.
“The broker deploys bots to simulate human traffic to the site. The publisher’s numbers increase and advertisers pay the publisher for the increased fraudulent traffic.”
Fraudulent sites are sophisticated, “large content farm” ghost sites with whatever topics a marketer might want and they deploy bots to make non-existent, so called “qualified audiences”.
Marked URLs exploit the bid stream of a programmatic marketplace, which relies on them to determine whether marketers purchase a particular ad impression and how much they pay.
“Fraudulent sellers can represent their site as being more targeted, relevant or credible than what it actually is and as a result, change charge high cost-per-thousand (CPM) rates at the cost of the advertisers,” Carter says.
This is where copyright infringement takes place with sites offering themselves as more premium than they really are. Different forms of copyright infringement include ad injection, embedded streaming, freemium, live and TV.
Lastly, hidden ad units, termed as pixel stuffing and ad stacking, is where advertisements are created into a 1x1 pixel unit at the bottom of a page.
“This ad unit is not viewable. In terms of ad stacking, they place numerous campaigns on top of one another in a single ad unit. The publisher gets paid from ad networks that believe this is legitimate,” Carter says.
The degradation of online trust
According to
Rubicon Project, who spoke to
Media Update as a collective, all good businesses thrive in a clean, well-lit marketplace which is why online ad fraud is such a threat to the industry.
“Technology has created a very disruptive and new advertising environment in which to work and with that comes a great deal of responsibility from technology partners,” the global marketplace company says.
“The players in this space that operate virtuously and in a way which benefits all three parties (buyer, seller and consumer) will be the ones that come out on top in the end.”
Carter says the costs of online advertising fraud, beyond the straight economic, make online advertising less effective and “prevents businesses from investing more into the space”, with ROI in digital drastically impacted by fraud.
“Ad misplacement has been rife with many big international and local brands being a victim, with cases ranging from brands ending up on porn sites, to appearing on reputable sites but next to user-generated content that is inappropriate,” Carter says.
“This then leads to breakdown in business relationships and trust with the media buyers and the clients and a complete distrust in the supply chain.”
Rooting out the problem
It is apparent that online ad fraud is such a serious threat to the industry that stopping it is a necessity but where do industry players start? Like reconciling with a person who has been wronged, winning their trust back is the foundation for further development. Without it, nothing is possible.
Getting that trust back, according to Rubicon Projects, is everyone’s responsibility in the industry to ensure the health and the honesty of the digital ecosystem.
“Technology partners, publishers and buyers all need to be vigilant in monitoring their traffic, third party relationships and controlling their budgets so they are not endorsing or contributing to ad fraud or illicit activities,” the company says.
“Initiatives like
DigiTrust which look to provide universal identification for users across sellers to buyers reduces the number of third party cookies which need to be dropped on users, thus preventing data leakage of publishers’ audiences.”
It further provides an opted-in consensus from users, which endorses digital advertising to consumers while engineering trust across the whole value chain from seller to buyer and, ultimately, the end user.
“Rubicon Project is a founding board member of TAG alongside a number of advertisers, media agencies and technology companies that are striving to support clear quality systems and processes across the advertising ecosystem.”
Carter feels monitoring and understanding the complex supply chain is a fait accompli to ensuring confidence in the online ad environment.
“Know your supply chain partners. Tracking your buys gets you into blacklisting and whitelisting. Third-party vendors have also developed verification and fraud detection technologies,” he says.
“These technologies can validate ad delivery according to media plan, whether the ad content was ultimately viewable within a user’s browser, and in certain cases support the detection of fraudulent activity.”
Verification and fraud services, in particular, allow advertisers to measure the risk relating to the placement of inventory to which ads are ultimately delivered.
In certain cases, verification services allow for the blocking of ad content, in addition to reporting situations, Carter explains.
“Advertisers also need to avoid low CPCs and CPMs as the key driver of inventory and look to actual performance based business KPIs, such as sign ups to newsletters, online sale, and e-mail sign up,” Carter argues.
“A simple way is basic house-keeping, paying closer attention to your analytics and looking for abnormalities. If something is looking too good to be true on the report, then it generally is.”
Rubicon Projects points out that if consumers are messed with too much for too long, the industry will be killing the goose that lays the golden eggs.
“Until all brand marketers embrace in a sincere and meaningful way that consumers need to be engaged with and not exploited, they will continue to find ways to take back control through technology like ad blocking,” the company says. “Now is the time for marketers to pivot away from the addictive practice of retargeting and towards new methods that forge lasting consumer relationships.”
Content marketing and native advertising offer promise in this area. The onus is on the online advertising industry to clean itself up before it’s too late.
Has your company been affected by online ad fraud? Let us know in the comments below.