3 Reasons Ad Fraud Will Be Beaten By 2020

• by Dennis Pekel , Op-Ed Contributor, December 13, 2017

Whenever an industry grows and begins making money, you can be sure fraudsters won’t be far behind. Our industry -- online advertising -- is no different. In fact, it is particularly rich pickings for scammers given that digital advertising spend is about to overtake TV for the first time ever.

How big is the problem? In the US alone, it was estimated last year that advertisers lost $7.2 billion to “bot fraud.”

When figures like that are thrown around, the problem can seem huge and almost unsolvable. Except it’s not. Behind the statistics, a different picture is emerging. Things are improving and the industry is beginning to get a grip on things.

I’ll stick my neck out now and make a prediction. By the end of 2020, ad fraud as we know it will be a thing of the past. Why am I so confident in my prediction? My reasons are threefold.  

First of all, money talks, and there is pressure from major brands for the industry to find solutions. Secondly, education and awareness of the problem is much improved. And finally, there are some interesting industry players emerging that are attempting to put an end to ad fraud once and for all.

Let’s go through each of these in turn:

1. Brands are making themselves heard  

One very prominent example is P&G.  

In January, chief brand officer Marc Pritchard made a speech in which he claimed: “We serve ads to consumers through a non-transparent media supply chain with spotty compliance to common standards, unreliable measurement, hidden rebates and new inventions like bot and methbot fraud.”

This was followed up in August with the announcement that P&G would cut its online advertising budget.  

However, crucially P&G said the move was temporary. And so while it represents a reduction in budget for one of the world’s largest advertisers, in a way it’s actually good news. It’s a wake-up call that pushes the industry toward dealing with this issue once and for all instead of making do and sweeping it under the carpet.

2. Education and awareness are increasing

The industry is taking notice, with an emphasis on education. Every week I see articles and guides telling readers how to spot fraud and how to combat it. This is important, as if you are going to deal with a problem, you first of all have to be informed about it.

One example of a recent education piece is this article in Marketing Land by Soo Jin Oh, which has some good insights and tips. For example, the need to rely on meaningful metrics is highlighted.

This is something my colleague, Paul Dolan, addressed in an article where he urged the industry to use Viewability as the starting point when looking at whether an ad is successful or not. CTR data can quite easily be faked, but viewability much less so.

3. Technology is catching up

Finally, there are some really interesting tech players out there that are making tackling fraud part of their business DNA.  

One company that is worth keeping an eye on is Amino Payments, which believes it can become a “fraud killer” by using the blockchain to clean up digital advertising.  

Amino Payments believes that practices such as "spoofing" will be a thing of the past if advertisers use its technology. There are now start-ups backed up by investors who are putting both serious dollars and brainpower into the issue.

Another example is the IAB Tech Lab’s ads.txt project, which encourages publishers to place an ads.txt file on their site listing all the companies authorized to sell the publisher’s inventory. This way, DSPs will allow buyers to directly confirm the credibility of the inventory they’re paying for and avoid nefarious tactics from fraudsters like spoofing, pop-unders, or the diversion of traffic to low quality sites.

Sorted by 2020

These three developments together will help eradicate ad fraud, as we know it, as a significant problem.  And behind all the bad news headlines there are already signs of optimism, for example the White Ops study earlier this year predicted that ad fraud will actually go down in 2017.

Alas, we must not be hasty and let down our guard if we see current methods of ad fraud diminishing. We work in an industry with such a rapidly evolving digital landscape so must be aware that fraudsters will find new methods of ad fraud for us to combat.

This is an incredibly exciting industry to work in, with huge possibilities and potential. As these types of fraud become less of an issue, we’ll be able to really seize these opportunities and concentrate on what’s important:  How can we deliver great, effective advertising for brands?