Commentary
How The Middle Layers Of Ad Tech Keep Fraud Alive
- by Mike Peralta , Op-Ed Contributor, February 2, 2015
For years, the advertising buying model worked in a similar fashion. Brands sat down with their agencies and cared only about reaching their target and growing sales. They saw the ads on TV and in print, and that was satisfactory.
Today, brands are forced to acknowledge that fraud has become a daily concern -- especially in online media. Reports in December indicated that bots create as much as 11% of display ads purchased, and 23% of video ads. Advertisers could lose $6 billion globally in 2015, a tough to pill to swallow amid otherwise cheery forecasts for digital’s growth.
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Brands must make sense of a byzantine web of technology layers, data partners and additional middlemen if they want to curtail the problem. It’s apparent that brands now need to understand how their ads get to consumers and which ads are legitimately viewed by consumers, and try to recoup the wasted budget that comes as a result of non-human traffic. The only way to combat fraud is for brands to demand more transparency and take back ownership of their data and technology.
The current ecosystem, marketed as cutting-edge and efficient, has allowed fraud to persist, largely because some middlemen rely on obfuscation to earn a profit. So far ad networks and publishers have not shown a concerted effort to tackle the issue. When companies rely on opacity for revenue, they also create an environment where fraud can thrive.
Programmatic buying and selling has emerged as one scapegoat in the battle against fraud, but that is too easy a target, a case of applying the blame to the new technology on the scene. But programmatic is not the problem. The issue remains the complex and difficult-to-navigate layers that come between buyer and publisher, and the incentives for obfuscation, coupled with few rewards for detection. Trading desks, ad networks, and, yes, even publishers themselves are responsible, with one quarter of bot traffic coming from the top 1,000 sites, according to White Ops.
Brands looking to eradicate fraud need to learn about ascendant online buying strategies like RTB and programmatic while looking closely at their direct buys as well. By embracing programmatic technology solutions, brands can control where their money goes, avoiding the fraud they detect not only after their ads run, but before they even bid on suspect inventory.
The only source of energy that can drive change in this ecosystem is brand budget. That’s the money that keeps the lights on at the agency, the tech vendor and the data brokerage. The CMOs and CFOs at major brands -- the ones losing billions to non-human traffic -- need to ask questions about where their dollars go. If the money is disappearing into opaque “planning” line items or inventory mark-up, then those items need to be defined.
Advancements in ad tech should take the advertiser down this path, rather than obscure it. If brands put poor-performing partners under review to eliminate fraud and gain transparency and still don’t see a favorable result, then it’s time to change the approach. Just like a car, too many attempts at repairs should make it obvious that you’re dealing with a lemon. It’s time for brands to move on and take ownership.
Mike, I greatly appreciate your blog on online fraud ads. I agree with many of your points. However I do disagree with two. There are quality publishers like Sweepstakestoday.com that will not knowingly publish a fraud ad for a buck. In our 11 years I would rather go hungry that to cheat my members, legit advertisers and agencies by showing or publishing known fraud ads. There is a major problem with Google AdSense when the bad guys will switch URL addresses faster than I can block their ads. Worse Google puts a cap on the total number of block ads at 500. Hey Google, you might have 1,500 fraud ads running! Second, the online industry is missing the biggest market of all. This is the text links. I work with many ad agencies and marketing companies for the Fortune 1,000 companies that come to me to publish there sweepstakes and contest in text link form. By doing so, they can track the clicks and entries and we also have a quality control program by tracking the entries and members who enter the sweeps. This is a win-win al the way around. However on the online ad industry thinks with one mindset, that is either the ad has to have a banner or video with the ad. Well, many times we get up to 50 times more entries with text link verses banner on a quality sweepstakes promotion. I am hoping that the RTB's and ad networks listen to what I am saying because many times you will get a great sweepstakes entry for the faction of the price.
The only thing that will solve the problem is for big 4 accounting firms to audit, retrospectively campaigns as they routinely do in traditional. KPMG is doing this now. All of this task force nonsense will be replaced by one major advertiser telling their agency and network that they want their money back. Done. Ad Fraud will disappear in a in a week.
Nielsen says 100m+ viewers tuned in watching Superbowl but no way for sure 100M+ viewers watching the screen......having convos, tweeting on mobile screens, getting snacks from fridge, walking the dog, having a smoke outside, making a phone call etc. ,so is this fraud too?
Leonard,
No. But that (Above) is not the analog. The analog would be if the cable company claimed to have 100mm channels that a 100mm people were watching and sold local spots in that fake programming and invoiced customers based on that fabricated viewership. And then claim they were victimized by these deceptive channels whilst keeping their cut and writing checks to all of them. That is fraud.
Leonard, as I'm sure you are aware, Nielsen conducts a survey, using a "peoplemeter" panel. Without going into all of the details, all Nielsen really knows for sure is whether one or more of a panel member's household sets was tuned in to a particular channel at a given point in time.The fact that Nielsen's system assumes that self proclaimed program "viewers" were 'watching" the commercials----unless they indicated otherwise-----while obviously overstating the true commercial audience-----is about all that this methodology can manage. It's not fraud. It's up to the user of such data to bear the limitations of the measurement in mind. Various schemes have been tried to get at commercial viewing, using heat sensors, cameras, etc. but so far none have proved practical. We cant expect to get precise numbers for everything, however the various commercial recall studies, at least give an indication of the audience attained by nationally aired commercials.