Commentary

Why Ad Fraud May Be A More Pressing Issue Than Ad Blocking

Is ad fraud a more pressing issue than ad blocking? Both are discussed within the same conversations, but at least one media executive believes ad fraud is taking a bigger bite out of advertisers’ wallets than ad blocking—for now, at least.

Jordan Bitterman, the former chief strategy officer, Mindshare, North America, takes this view. “Most sites aren’t in sell-through situations,” he said. For example, if most Web sites aren’t selling 100% of their inventory, perhaps they’re selling only 80% of their inventory. That means that if 20% or 30% of impressions are ad-blocked, publishers are still doing OK: “They’re not losing that inventory just yet,” Bitterman said.

On the media buyer side of the equation, you only pay for the ads that get served. If publishers are in a 90% sell-through scenario and have only a 10% vacancy rate, and say 50% of all ads are being blocked, then there’s a serious “pocketbook problem,” Bitterman explained. “[Ad blocking] hasn’t become a pocketbook problem just yet. It’s on all of us to get this solved.”

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He’s not saying blocking won’t become a bigger problem, but smart brands and agencies are creating experiences for audiences that will help inoculate them from the problem. They’re doing that by attempting to create compelling content, promotions, or some sort of “value exchange” for audiences.

Ad fraud, Bitterman maintained, is a much bigger issue than ad blocking: “Ad fraud is already hurting people in their pocketbooks. If a bot is being served an ad, then the brand is paying for that impression, and that’s a problem for the advertiser and the publisher.”

The problem will catch up to any publisher that allows this to happen, according to Bitterman: “Ad fraud is already affecting the industry financially. Ad fraud is already  affecting the financial mechanisms of ad buying and ad selling, whereas ad blocking is a serious issue that all parts of the industry has to solve individually and collectively.”

Ad blocking, Bitterman said, hasn’t changed the cost of media from a supply and demand standpoint. “Prices haven’t changed because of ad blocking, but they have with ad fraud. The economics have have already come home to ad fraud.”

“One of the knocks on programmatic—any kind of automated buying—is that it’s just rife with these types of challenges, because there’s an arbitrage going on with the media. …Media agencies and brands really have to do their homework on who the most technologically sound partners are,” Bitterman explained.

So what’s Bitterman looking to do next? “I think what’s missing is the ability to easily translate issues for all the different constituencies. Media companies and brands often don’t know how to distill things down to two or three sentences.  … Companies need to try to make sense of how the world is changing [the ad and marketing world], what it means for them and where they need to go next.  The idea of helping making sense of the transformation that’s going on right now, the growing importance of data, video, native, algorithmic buying, are what’s interesting to me.”

5 comments about "Why Ad Fraud May Be A More Pressing Issue Than Ad Blocking".
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  1. Augustine Fou from Marketing Science Consulting Group, Inc., May 17, 2016 at 5:15 p.m.

    It absolutely is a more pressing issue. It is the central issue. Ad blocking is a distraction where the good guys fight amongst themselves while the bad guys continue to make money.

  2. Chris Carter from AAM, May 18, 2016 at 11:53 a.m.

    Media companies make money whether the ad is viewed by a person or a bot.  Marketers must insist their media partners have been certified to the MRC and IAB guidelines to help reduce fraud.

  3. Shailin Dhar from Method Media Intellgience, May 31, 2016 at 8:59 p.m.

    It's great to see an article taking this perspective, rather than the opposite which seems to be more common.


    Ad-block's effects on both big and small publishers is still being mis-reported because most publishers are buying sourced traffic to compensate for any potential losses in revenue. 


    And this is traffic that never gets detected as fraudulent because it's designed to pass the major filters. 

  4. Shailin Dhar from Method Media Intellgience replied, May 31, 2016 at 9:02 p.m.

    Chris, I agree that ad-tech as a body makes money on both fraudulent and human impressions, thats something most of the industry does not admit.
    But I'm sorry to say that there are companies complicit in scaled fraud that are certified by the IAB and MRC. Those certifications have become meaningless.

  5. Mikko Kotila from botlab.io, June 1, 2016 at 5:59 a.m.

    One very important point to always remember when comparing ad blocking and ad fraud as indusry issues, is that the other is criminal activity and by far the largest form of cybercrime. It's very nice to see the conversation start to turn to something that makes more sense. Also in the non-sense articles about ad fraud the trade press is filled with, there are barely any comments. Here we already have a vibrant conversation. 


    In terms of ad blocking, publishers have the opportunity of innovating themselves out of it, just like big music publishers did about 15 years ago in a similar situation where the industry had lost its touch with modern times.

    When it comes to ad fraud, it's exactly like Chris points it out, media companies are making money it's bot or not. Actually many major media companies are buying source traffic at prices that scream "AD FRAUD", and have in that way now become intended accomplishes in what is the largest form of cybercrime. It is very important to not allow publishers and their conduits to divert the attention of the industry away from sourced traffic buying, and other forms of ad fraud taking place on their "real-estate".


     

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