Commentary

Three Truths About Fraud

by Cory Treffiletti , Featured Contributor, April 7, 2015

There are some dirty truths about fraud. I’m really starting to agree that it’s beyond time that our industry addresses the topic. I latched onto viewability almost immediately when the topic was brought up, but I’ll admit I didn’t attach my passion to the fraud topic quite as readily, because I found it hard to believe. I now know the error of my ways.

I’ve seen different reports and read many different numbers, but if the stats are to be believed, then somewhere around 30%-60% of all ad impressions served are either fraudulent or never seen. This sounds ridiculously high, but within that range is a lot of ad spend.

Truth #1 on this topic is, most agencies don’t care too much because they buy the inventory so cheap and try to cover the fraud through optimization, squeaking by and achieving the client’s metrics. The cost of implementing fraud monitoring and viewability standards has to be calculated to outweigh the premium agencies would be forced to pay for the media. That’s a tough pill to swallow for most agencies: a fear of the unknown. They don’t know if they can make the numbers work.

Truth #2 - Fraud is about more than just wasted money -- it can be damaging for a brand. Fraud comes in many shapes and sizes. It can apply to paying for unviewable impressions and ads that never show up, but it can also apply to impressions that are displayed in a non-transparent environment through an exchange when you have no idea where the ads are actually shown. If you’re not using third-party data from a reputable source, and if you’re not looking at tools and services to verify delivery, you risk your brand’s being shown on a site where you don’t want it to be displayed. What if your brand is shown alongside inappropriate content, or simply news content that’s not favorable? Without transparency on the locations being bought, you have no recourse -- and no ability to protect your brand.

Truth #3 – This one may surprise you: While fraud is clearly a large issue, it’s not something that would be hard to fix. The industry wants to fix it. The agencies can be pressured to focus and fix it. The brands speak to how they would like to fix it. The challenge is aligning everyone to agree to terms and stop bickering about it.

One of the main industry organizations could take the lead on uniting the other industry orgs, and with executive sponsorship from the top-five publishers and the top-five holding companies, this could get resolved quickly. The majority of the ad spend is pushed through those companies. Since they control the lion’s share of the dollars, they could impose self-regulatory policies that everyone else would likely have to adopt.

The top 100 publishers and top 100 advertisers, as a whole, could literally eradicate the fraud issue in a matter of months if they would get on the same page. The result would be higher premiums to be paid for verified inventory, and agencies would likely have to focus on the creative product a little more. But as a whole, I would expect the quality of online advertising to increase dramatically.

The undercurrent of fraud is damaging to the entire industry. As the larger media industry continues its shift towards digital -- and with TV looking to adopt more and more of our policies and process -- this feels like the right time to get this problem solved.

Am I missing anything? Is there another challenge to the fraud issue?

ad fraud, online fraud

26 comments about "Three Truths About Fraud".

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Paul Benjou from The Center for Media Management Strategies, April 7, 2015 at 9:07 p.m.
Thanks, Cory. For gently pulling back the covers so that the industry can begin a serious dialog to address the problem. Doing nothing, or not enough, will simply allow the problem to fester, causing long lived damage to both vendors and marketers. Let's begin the process.
Reply

Paula Lynn from Who Else Unlimited, April 8, 2015 at 9:51 a.m.

Follow the money as usual. There is always a financial reason why this has not been fixed for so long if it could have been. That said, with proof of negligence, get your legal engines running. Big boom.

Michael Zaneis from TAG, April 8, 2015 at 9:55 a.m.

Cory, thank you for highlighting the problem of fraud in the digital advertising supply chain. You are correct that this is a problem with massive scope and impact on everyone. Regarding your third point, I'm happy to report that the industry has done exactly what you suggest and joined together to create comprehensive solutions to tackle this problem - https://tagtoday.net/.

We would welcome you and others to join this effort. You can see the senior industry leaders that have already joined the TAG Board - https://tagtoday.net/trustworthy-accountability-group-announces-board-of-directors/.

Sincerely,

Mike Zaneis

Interim CEO, Trustworthy Accountability Group (TAG)

Chris Williams from Arima, April 8, 2015 at 10:10 a.m.

Cory,

the issue was pushed very publicly by IAB US at the beginning of 2014 at the Leadership Summit. The amunt of time elapsed since gives you an idea of the complexity of defining and implementing a solution. Fraud is a separate problem from viewability and transparency however they are inter-related. Here are my suggestions as to how to address several of the supply chain issues:

https://www.linkedin.com/pulse/article/how-advertisers-can-push-more-effective-digital-media-chris-williams/edit

Esther Dyson from EDventure, April 8, 2015 at 10:52 a.m.

Thanks, Cory! When I visit the rented-space booth pushing cosmetics or branded jeans inside the Macy*s department store, I expect Macy*s to have done some vetting of that purveyor. But when I (passively) visit rented space on a website, the website owner shrugs and says, "Oh, that's the third party's repsonsibility" and so it goes down a long chain. Absolutely fixable if the industry wants to fix it and establish accountability.

Rich Kahn from eZanga.com, Inc., April 8, 2015 at 1:52 p.m.

Cory,

I am with you in that the issues need to be resolved and agree with some of your points. However, I disagree with your "Truth # 3" that "it's not something that would be hard to fix". Google is one of the largest online marketing firms on the internet, and they have not been able to solve it. Last year alone they bought 2 companies that help block reduce internet fraud and they still have not been able to accomplish that task.

You also mentioned viewablility. I recently read an article showing that viewability on the internet is currently just above 50% and a goal should be to get to 70% and yet the largest place companies spend money is TV and yet they only have a 14% viewability.

I agree with the fact that we as an industry need to solve or at minimum significantly reduce the fraud that is there, but it's nice to see that we are much further along than TV, which is one reason why we expect digital marketing to surpass TV marketing in 2016.

I am looking forward in seeing how things shape up over the next year or two on both fronts :)

Rich

Ed Papazian from Media Dynamics Inc, April 8, 2015 at 4:02 p.m.

Rich, regarding your point about TV ad "viewability", would you be so kind as to explain your figure of 14%. Where did that come from? Thanks.

Rich Kahn from eZanga.com, Inc., April 8, 2015 at 4:23 p.m.

Ed, it was just a quick stat that I pulled from an article: http://www.theguardian.com/media/2010/aug/24/tv-advertising

Ed Papazian from Media Dynamics Inc, April 8, 2015 at 4:47 p.m.

Thanks, Rich. The article you referred to was based on a poll of Brits who claimed that they avoided---or fast forwarded by---86% of all commercials when watching TV shows on a delayed basis. Needless to say, such high claims are to be expected in this sort of research, however, mechanical measurements indicate that the actual figure is closer to 50-60%. Since time shifting accounts for only 10-12% of TV viewing and Nielsen deletes commercial "zappers" from its ratings in the U.S.there is no question that the "commercial minute" ratings used to buy national TV time, aside from minor methological issues in the way they are tabulated, are giving advertisers a fair indication of audience potential. This is not to say that every "viewer" actually watches every commercial or is even in the room, but that is also true for digital "audiences".More to the point, is the question of "viewability", itself. When a national TV advertiser buys a commercial placement in a particular telecast, he can be 100% sure that it appears in one of the show's breaks and runs without interruption in its entirety. Some sort of electronic chitch may occur, like the ad being truncated for a few seconds or its sound may be a bit garbled----but this happens so rarely as to be immaterial and compensation" is always offered. This is a far cry from the current digital situation, as you can see. In terms of "viewability" TV's norm is virtually 100%, digital's is less than 50% and, in the case of video ads shown in their entirety, its probably closer to 30%.

Rich Kahn from eZanga.com, Inc., April 8, 2015 at 5:37 p.m.

Ed, I understand your point. However, when I record my shows and use my DVR to zip through commercials, just like the majority of the population, I am not getting the marketing message that the advertiser is paing for. Like you said, if we used commerical means to monitor what commercials are watched, it would be around 50% - 60%, which still means that viewablility, meaning someone physically seeing the commercial's message, is seen by 40% - 50% and that is still lower than the internet right now, which is a good thing for the internet.

This is also dependant on the show being aired as some have high skip rates and some have low skip rates.

If we look at Youtube that has video ads, 94% are skipped...so is the marketing message really being viewed by the intended user? (http://www.adweek.com/adfreak/agency-tries-make-ad-thats-all-unskippable-youtube-preroll-159183).

All I was bringing up for discussion is that all marketing has their own viewability numbers, and where we are today, I believe the internet is the highest...but there is room for improvement!

Matthew Ford from SwipeAds, April 8, 2015 at 7:25 p.m.

I respectfully disagree with point 3 and second what Rich Kahn said. There are a lot of solutions out there that say they will weed out view fraud but one must examine the general history of this approach in this and other industries (stopping illegal DVD ripping and music piracy come to mind). Fraudsters are clever and learn quickly to imitate the signals that make their abuse evade the detection.

We need to focus on tasks that computers actually find hard to do, which is why we build ads into FunCaptcha, to be shown only after the human test is done. It's a specialised ad unit but it actually stops the fraud in a way that is highly credible and transparent.

Craig Mcdaniel from Sweepstakes Today LLC, April 8, 2015 at 9:35 p.m.

While my company is not a "top 100" publisher in the big picture, I still have much at stake in getting rid of fraud as anyone. The public is really smart about clicking questionable banners and then the public starts to question if the known and honest brand's banners.

However one solution to the problem that is a giant taboo to even talk about is text links. I work with many Fortune brands who trust my work and judgement in taking their advertisement and turning it into entertainment using text links. This would not work with the majority of publishers. However consider this... the biggest publishers like eBay, Amazon and now Walmart depend on text links to sell the consumers products online. Sweepstakes Today does the same but our product is advertisement.

Think outside the box and you will more ways to defeat the bad guys.

Ed Papazian from Media Dynamics Inc, April 9, 2015 at 6:36 a.m.

Rich, I guess that we will have to agree to disagree regarding comparisons of ad viewability on TV versus digital media. I doubt that many people will agree with you that digital's visibility rate is higher-----but let's see.

Neal Lulofs from AAM, April 9, 2015 at 9:16 a.m.

As a digital auditor, we see fraud from a somewhat unique perspective. There are steps that all parts of the ecosystem -- advertisers, agencies, publishers, ad tech -- can and should take to address the need for trust and transparency and to hold each other accountable to best practices. Detailed further in this white paper.

http://auditedmedia.com/news/interviews-and-case-studies/white-papers/publishers-can-make-a-real-difference-in-the-fight-against-ad-fraud-and-nonhuman-traffic/

Chris Williams from Arima, April 9, 2015 at 9:27 a.m.

Viewability and viewed are two different things and it gets confusing when you talk about tv in that context. The ratings deliver the media currency upon which money is exchanged. Part of the currency is the definition of viewbility - was the ad rendered on a screen? whether it was viewed or not is a completely different question. PVRs are brought up, so the question is, in the country you are talking about, do they include non-live viewing as part of the currency and if they do - what is the definition of it and how is it measured? Lots of nitty-gritty but this is media.
Neal hits on one of the most important things - the audit. Without a neutral third pary empowered by the advertiser to investigate - expect problems of all kinds.

Ed Gaffney from GroupM, April 9, 2015 at 5:06 p.m.

Rich,

In reponse to your statement "However, when I record my shows and use my DVR to zip through commercials, just like the majority of the population, I am not getting the marketing message that the advertiser is paing for.":
1) As Ed P. pointed out, the majority of the population does not avoid ads. In fact, ad avoidance rates are dropping (51% in 4Q09 vs 41% in 4Q14, 5Net Total Day, L+3, A18-49) as viewers increasingly turn to VOD for their delayed viewing fix. When last we looked (Sept 2013-Feb 2014, A18-49, Total Day), 81% of viewing in DVR homes was live, and only 19% delayed.
2) In National TV, viewing is based on the minutes with commercial time. For all deals based on commercial ratings, advertisers don't pay for skipped ad minutes as they are not counted in the ratings. (Nielsen National Reference Supplement 2014-15, Chapters 12 & 15 and AppxA-68)

Your estimate of "around 50% - 60%" regarding commercials watched is based on what research? There have been numerous ethnographic studies of TV viewing and I can't recall one showing anything near that range.

Ed Papazian from Media Dynamics Inc, April 9, 2015 at 5:29 p.m.

Ed, as you know, we are on the same page on this. I should point out that my company has long published estimates of commercial exposure ratios---meaning, in effect, noting, not just opportunity to see----based on lots of camera, other observationa studies, viewer recall research etc.---all of which are cited in our annual, "TV Domensions 2015". Our belief is that even for commercial minute ratings, as are now in vogue---and we endorsed their adoption along with the agencies----that approximately 55-60% of the reported "audience" is in the room and paying at least some attention per message. Without getting overly complicated, this is an average of "live" and "delayed" viewing and, obviously, there are variations by daypart, network type, show type, commercial length and commercial clutter factors. While some may think that this is a negative for TV it isn't. As I noted, earlier, if comparable data were available for digital, taking into account invisible ads and those that get chopped or truncated, I would expect to see a figure that is far below TV's average noting score.

Rich Kahn from eZanga.com, Inc., April 9, 2015 at 5:31 p.m.

Ed G, the quote of "around 50% - 60%" was quoted from Ed P's comment. I am not sure where that came from either. I have been doing TV advertising for my client on a cost per call basis because I know that as VOD increases, you won't be able to avoid the commercials. so that's a good thing for TV advertisers, but most consumers don't like it especially when we pay so much for TV services these days.

Brian Singleton from Local Corporation, April 9, 2015 at 11:20 p.m.

The solution to this problem is simple, there are several companies who have tools who can almost completely remove advertising fraud and veiwability issues. We have been using ours for months now.

Here is the problem, no one is willing to pay for it. Yes, I mean all of those advertisers, agencies, and media buyers out there screaming about ad fraud; those people aren't willing to pay for it.

They just want it "fixed", well news flash advertiser, if I have to cut out 30% of the impressions I deliver to you, that is more expensive. You ultimately get a higher yield, but that's not what drives your personal bonus is it?

Viewers of the thread, don't believe this? Think its a silly rant? Well here goes the ultimate trial: Advertisers, agencies, and media buyers. I will offer you a trivial cost flat CPM, not even a percentage of your ad spend, for our tool which will reduce your non-human traffic to 0% of your spend, this reduction will also increase your viewability to well above 90%. We will further back this with a media spend gaurantee (get served fraud traffic, we will pay for it)

All you have to do is post your linked-in profile URL (public information) and I will reach out to you privately there.

So let's see how many advertisers actually take this issue seriously enough to remove it from thier media buys.

John Grono from GAP Research, April 12, 2015 at 8:02 a.m.

Ed, can you please clarify whether 'zipped' playback off a DVR is included or excluded from the programme average minute audience data in the US ratings.

Here in Australia, we use audio matching. As there is no sound (or maybe garbled sound) when fast-forwarding recorded content those minutes don't count to the final audience figure. So if a person 'watches' (allowing for not being in-the-room and attention discrepancies) all 60 minutes of a one-hour programme they would count 100% of their projection factor (aka 'weight') when viewing live. If they 'zipped' 12 minutes they would only count at 80% of their projection factor - i.e. it is built into the system already.

Cheers.

P.S. Joe - thanks for the paragrpahs back!

Ed Papazian from Media Dynamics Inc, April 12, 2015 at 9:22 a.m.

John, not being a Nielsen client I have not had a discussion with them on this technical point. Perhaps, Nick or some one else who has can provide an answer. I would assume that all forms of electronic avoidance, including sound muting, would be discounted in some manner. I also suspect that what you have in Australia is modelled on the normal practice in other countries and Nielsen in the U.S. would normally be aware of this. Would anyone else care to comment?

Brian Singleton from Local Corporation, April 14, 2015 at 1:01 p.m.

5 Days since OP. Have not heard on this thread or privately from a single advertiser even inquiring about a solution that will end their ad fraud even with a revenue garauntee backing it up, I would have literally given it away for free to anyone who had posted here.

So there is your "4th Truth" about ad fraud, is at the end of the day advertisers do not genuinely care about this issue, it's just a good, broad, and indirect finger to point at no one in particular...

Tom Hespos from Underscore Marketing LLC, April 17, 2015 at 9:35 a.m.

Coming to this thread a bit late. Sorry.

Brian Singleton - I'd be interested in evaluating your solution. What can you share concerning the tech?

Here's my LinkedIn Profile if you want to reach out: https://www.linkedin.com/profile/view?id=90812

Brian Singleton from Local Corporation, April 20, 2015 at 2:07 p.m.

Thanks Tom, appreciate the willing spirit.

We have a technology as described above that will almost completely remove all fraudulent traffic from your media buys. I will reach out via linked in to discuss with you in detail.

-Brian

Rich Kahn from eZanga.com, Inc., April 20, 2015 at 2:28 p.m.

Brian, is it something you built internally? I have been building our system, Traffic Advisors, for more than a decade.
 
We feel that our system, eliminates almost all of the fraudulent traffic too, and we based that on conversion data from our clients. We don't charge for our technology since the traffic is purchased from us.
 
My question is who makes the determination that your system is accurate since I have yet to see any 3rd party traffic quality scoring system agree with each other.
 
I am curious as I keep my eyes out for any technology that can prove itself :)

Brian Singleton from Local Corporation, April 20, 2015 at 2:56 p.m.

Rich - Yes, it's something we built internally and also leverage several 3rd party verification systems. It works great, and yes an industry benchmarking for "determination of accuracy" would ultimately be great.

As for your system, I am sure it works great, as I mentioned in my originating post, several companies have solutions for this kind of thing. Advertisers really just need to reach out and use them for thier media buys. This problem is not new, nor is it outside the realm of known solutions. Advertisers should be shopping and testing for thier favorite solution, not complaining that they don't exist.

Thank you for helping to reinforce the advancement of this cause with another available solution to advertisers.