The proceeds of ad fraud can be huge - the Internet Advertising Bureau (IAB) estimates losses of around $8.2 billion each year. For advertisers, these losses have a big impact on their profitability. For marketers, this fraud can also affect their ability to support their brands. Both marketers and publishers should care more about this digital ad fraud risk in 2017.
The potential impact of non-human traffic (NHT)
NHT represents a range of traffic to websites that is carried out by software agents rather than real people. However, this issue is not as simple to deal with as simply blocking traffic from suspicious IP addresses.
Many bots are aimed at carrying out nefarious activities spread their attacks over thousands of IP addresses, spoof their identities, and mimic human behaviour to avoid detection. They then click on adverts or interact with sites in ways that lead to fraudulent payments being made back to the bot owners.
Further complicating the matter is that NHT isn’t always bad. Some bots, such as those from Google, Bing, and content recommendation engines, are directly beneficial for both marketers and publishers as they help consumers find their sites.
For advertisers, NHT directly affects the success of their campaigns. This, in turn, forces them to audit traffic levels and ask for refunds. According to the 2017 State of Digital Publishers’ Fight Against NHT report by the 614 Group, many brands and agencies are now putting conditions around acceptable levels of NHT into their proposals with around 68% now including this measure. Meanwhile, 74% of publishers admitted that pre-sales discussions include NHT thresholds to help confirm acceptable quality standards.
What can publishers and marketers do to prevent NHT from affecting them?
To stop this issue affecting the relationship with advertisers, publishers are taking more steps to prevent campaign fraud. Sixty-seven percent of publishers reactively identify fraud on traffic reports post-campaign, 33% block nefarious NHT proactively before it hits their sites, and 27% both block and audit. However, many publishers don’t currently have a dedicated employee responsible for stopping fraud – according to the 614 Group report, only 5% of companies currently have this role in place.
Marketers and publishers are mainly reactive at present – however, this is changing as third party tools are made available to block the bad guys from ever reaching their sites. Publishers should look at stopping NHT themselves. Around 68% of publishers believed that it was possible to block NHT, double the number of those that proactively block today. By taking out bad bot activity and ad fraud themselves, publishers can reduce the impact on advertisers automatically. More importantly, this can be used as a positioning point with advertisers; publishers can sell their audiences more effectively when NHT is removed.
From a financial standpoint, any moves here should pay back quickly. In the 614 Group research, 65% of publishers believed it would be possible to charge a premium for verified non-NHT interactions, while 69% thought they would be able to generate return on investment around anti-fraud measures for their campaigns.
What should marketers know about NHT, and how should it affect their plans
Looking ahead, both publishers and advertisers should think more about NHT and how it could affect campaigns. Currently, the majority of marketers do not look at this issue in detail – only 11% of publishers had ever received notification of fraudulent activity from their buyers, while only 9% had ever been blocked from future purchases.
It’s a famous business cliché, but companies cannot manage what they cannot measure. Marketers should look at their digital advertising spend more closely for signs of fraud, while publishers should look at their NHT levels and be able to block and audit traffic effectively. Currently, there are no standards in existence to make this process easier.
Marketers can encourage their publishing partners to understand more about ad fraud, share data on the scale of the problem within campaigns today and discuss what steps can be taken to block NHT in the first place. This includes sharing the results of third party analysis on NHT levels so that publishers can see exactly what is being categorised. Conversely, publishers should start asking for this sort of information from third party auditing firms as well – currently, around 80 percent of publishers report a lack of insight here today.
Brands, agencies and publishers should all look at how to detect, categorise and block NHT automatically so that fraudulent traffic does not hit sites in the first place. By reducing fraud, marketers can see better results from their advertising spend while publishers can simplify and support their business models. Both sides stand to win from this by cutting out more than $8.2bn in fraud.
By Elias Terman, vice president of marketing at Distill Networks
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