While the media controversy over a recent Mercedes Benz campaign that reached more bots than people was a particularly bad example of fraudulent web traffic eating up marketing budgets, this is nothing new. Indeed, the Wall Street Journal recently reported that 36% of all web traffic is fraudulent.
This made me think that it was worth taking a bit more of an in-depth look into this subject to provide an overview of what it actually means to advertisers and what is being done to combat the problem.
As with other problems advertisers experience with online advertising, much of the issue around online fraud is caused by a lack of transparency, with faceless middlemen creaming significant sums from advertising budgets.
Advertisers need greater control and transparency in programmatic buying to eliminate wasted budget that is often lost to the long line of intermediaries (including data providers, agencies, ad networks, trading desks etc. etc.) who require their own fees and perverse incentives from the advertiser – most of which are not accounted for.
Fraudsters add an even murkier layer of wastage, in a variety of ways, all of which muddy the waters further and lead to online content not being viewed by human audiences. This fake, non-human traffic leads to huge sums of money being paid unwittingly by bona fide marketers to organised criminal gangs.
So how does advertising fraud work?
The two biggest elements tend to be the hosting of ads on fake publisher websites (click fraud) or where thousands of impressions at a time are driven to fake users (impression fraud). With click fraud, the fraudsters create bogus websites which divert traffic away from real websites and host the ads which are then never seen by humans. Instead, these generate huge volumes of fake page views, thus creating ad inventory that can be sold on through middlemen.
With impression fraud, netbots (defined by the IAB as any non-human or automated user-agents that produce HTTP web traffic) repeatedly load an ad, sometimes thousands of times. This enables the fraudsters to take higher fees on a CPM basis as advertisers pay for ads to be served, not for them to be seen. You can see this explained in more depth on this IAB guide, which also features a useful infographic.
Often this bot traffic is driven by computers that have been infected by malware – so unsuspecting consumers could well be participating unwittingly. As an additional concern, this malware can then also, once placed, drive direct consumer fraud such as blackmail or stealing personal data.
Clearly, when you start talking about criminal gangs and fraud, this has to create a cause for concern for marketers, especially when industry estimates suggest that online ad fraud is costing advertisers as much as $10 billion a year. However, even though marketers are investing in solutions that stop this activity, many of these solutions are simply not working (as Mercedes knows, to their detriment).
So what’s the answer?
It’s combining cutting-edge technology and finely-tuned logic to ensure that only authentic ‘human’ connections are made across all digital touch points including display, video and mobile. This way it is possible to block impressions that don’t reveal their URL, and stops advertisers even having the option of bidding on suspicious inventory. Advertisers are able to do this across every single impression and click relating to an ad campaign – in real time.
With digital advertising predicted to reach $137.53 billion this year, according to eMarketer’s latest estimates of worldwide paid media spending, you can see why criminal elements are jumping on this opportunity. With so much fraud remaining undetected, and the ability to hide behind fake online IDs, the rewards appear to far outweigh the risk.
That’s why advertisers need to act fast and ensure that their ads are being served using anti-fraud systems that are up to the task. Otherwise, they are simply throwing money down the drain and, ultimately, supporting organised crime.
By Mark Connolly, Chief Revenue Officer and VP International at AudienceScience.
PrivSec Conferences will bring together leading speakers and experts from privacy and security to deliver compelling content via solo presentations, panel discussions, debates, roundtables and workshops.
For more information on upcoming events, visit the website.
comments powered by Disqus