Fraud Control: It's Time For Advertisers To Demand Performance

Fraud is a big part of today’s digital advertising ecosystem – and yes, it’s awful how rampant it is. But there is a solution, and it lies with advertisers.

Don’t get me wrong; I’m not out to blame the victim.  Those who perpetrate the fraud are undoubtedly the villains, faking impressions or manufacturing automated clicks. 

Yet advertisers end up bleeding massive amounts of their search marketing budget paying for ad campaigns where a material percentage of these viewers will never be customers. Several studies have examined the amount spent on “bot traffic” and other fraudulent traffic, and estimates on wasted budget top out at nearly $1 billion a year. Earlier this month, even premium publishers such as ESPN and the New York Times were called out as examples

But fraud follows opportunity. And change will come only when advertisers start paying for real, verifiable customer outcomes.



Before we address what advertisers can do, let’s first take a look at two main actors in the digital advertising industry and their roles.  First, you have the perpetrators of fraud who take advantage of the complexities in measuring traffic across the digital spectrum. To use a baseball analogy, think of this group as the players who take performance-enhancing drugs (PED). They know they are breaking the rules, but do so for a paycheck.

Next, you have publishers, who supplement organic traffic with search engine marketing and other vendors to generate traffic to their site.  In defense of publishers, it’s not feasible (or maybe not even possible) to monitor every technique that’s used to drive traffic.  To continue with the baseball analogy, publishers pay for what they believe to be “organic” traffic, but that traffic turns out to be juiced.  That’s why it’s important to incentivize those publishers who can – and do – produce measurable results by rewarding them with higher payouts.

Advertising technology is supposed to be our enforcement mechanism, like PED testing in baseball, to ensure successful performance.  However, this technology is far from universally adopted by publishers, especially in emerging markets like mobile and video.  So how can advertisers be part of the solution? By demanding their ad dollars “pay for performance.”  This is when advertisers make a decision to spend their budget on measurable outcomes – not impressions or clicks.

For starters:

  • Don’t pay by impression or click; pay by the outcome itself. E-commerce purchases, in-store visits, app downloads and phone conversations are difficult to fake. 
  • Use innovative payment models – e.g., CAPTCHAS – or other human engagements that would be a natural result of a favorable impression or click.  These are becoming more widely available. 
  • Don’t take no for an answer.  Insist on paying by performance. This will force publishers to adopt advertising technology that solves these problems. The cream will rise to the top.

When demand for performance happens at scale, fraud will be squeezed out of the advertising ecosystem because fraudulent traffic – no surprise! – does not produce real customer outcomes.

3 comments about "Fraud Control: It's Time For Advertisers To Demand Performance".
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  1. Jim Eaton from Jim Eaton Productions, October 28, 2013 at 4:01 p.m.

    Great Concepts! Let's move in that direction.

  2. Steve Plunkett from Cool Websites Organization, October 29, 2013 at 9:29 a.m.

    Or.. do organic? =)

  3. Mike Einstein from the Brothers Einstein, October 29, 2013 at 11:46 p.m.

    I thought the point of all this data was to ensure accountability. Seems like it's not working so well.

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