Defeating ad fraud won’t be easy for the digital media industry, but marketers, publishers and industry associations are coming together to battle.
Digital advertising revenue hit a record high of $27.5 billion in 2015, but the industry lost approximately $6.3 billion to ad fraud bots last year, and it’s expected to lose as much as $7.2 billion in 2016, according to the Association of National Advertisers and White Ops.
In an effort to combat growing fraud, the industry spotlighted the issue this year during its 2016 IAB Annual Leadership Meeting, The Next $50 Billion. It’s an exciting topic, and IAB’s forward-looking conference gave me hope that we’ll unite to defeat the fraud that affects us all.
The Weapons of the War Against Ad Fraud
With such rampant fraud, it’s easy to lose hope. However, the industry has made significant strides in its anti-fraud efforts.
For starters, the Trustworthy Accountability Group – a joint effort between the American Association of Advertising Agencies, ANA, and IAB – is fighting back with its “Verified by Tag” system. Designed to hit fraudsters right in their pocketbooks, TAG’s approach is two-pronged: It includes a payment ID system to prevent payments to criminals, as well as a registry of TAG-approved advertisers and publishers.
To complement TAG’s efforts, the online publishing world is beginning to accept viewability as the standard for measuring online impressions, and trade groups have invested millions in combating fraud.
Google, for its part, has recently eliminated three top botnets responsible for ad fraud on more than 500,000 devices.
While these are good steps toward defeating ad fraud, they alone cannot stem the tide of fraudulent traffic and payments. And the time is nigh for the industry to act. As Bob Liodice, President and CEO of ANA, put it, “We’re all enablers of this situation, which has to be cut off at its sources.”
The Mess and the Cleanup
As an industry, we can fight ad fraud. But to do so, all parties in advertising – consumers, marketers, and online media platforms – must act as one in decrying and disinviting fraud.
Online publishers should invest in advanced fraud detection tools to root out invalid traffic to their sites. White Ops, Forensiq, Google-owned spider.io, and other fraud watchdogs use complex algorithms to verify traffic and identify manipulative bot-like activity. Online publishers and ad networks must continue to swap the served impressions metric in favor of viewable impressions, which signals to advertisers that their ad impressions were viewed for at least one second and at a minimum of 50 percent of pixels. Publishers and ad networks should avoid sourced traffic providers, which use tactics like rotating ads and ad-heavy sites to redirect traffic and inflate impressions, according to DoubleVerify.
Brand marketers and advertisers must start by ditching cost-per-impression campaigns that invite ad fraud. CPM strategies have gained popularity among advertisers in recent years, but advertisers should stray from them because unscrupulous publishers pursue scale at all costs, including low-grade traffic acquisition, which leads to fraudulent bot traffic overrunning those ads.
Additionally, transacting in the programmatic exchange requires a high level of diligence. Marketers buying through the exchange should be sure to vet programmatic partners for their safeguards against invalid traffic and fraud.
Consumers can help stop ad fraud by discarding their ad blockers. Consumers’ favorite publications don’t collect revenue when ads are blocked, and approximately 40 percent of the world’s Internet users now use ad blockers, up from about 28 percent in mid-2015. More than half of the visitors to a typical gaming site, for instance, block the ads that the page uses to earn revenue. As legitimate page views decrease, publishers may feel pressure to maintain traffic volumes through fraud-heavy paid traffic solutions.
The Olive Branch of Trust
According to some sources, human beings view less than half of online ads, so it’s no wonder advertisers and publishers are frustrated. But building a stronger industry means putting aside our differences and cooperating for the good of consumers, brands and publications alike.
For a healthy industry, advertisers must be able to trust that real people – not robots – are viewing ads, publishers must trust advertisers to buy ads in a manner that disinvites fraudulent traffic to their sites, and both parties must trust consumers to not block ads placed by advertisers. Media associations, for their part, must engender trust by continuing to invest in fraud detection frameworks such as TAG.
When we’ve rooted out ad fraud once and for all, we won’t just reach the second $50 billion — we’ll earn, in good faith, another $50 billion beyond that. Ad fraud is everyone’s problem, and it will take everyone’s effort to halt.