Fraud, Bots, and Programmatic

Programmatic

Programmatic Media Buying is here to stay. It is impossible to estimate what percentage of current ad buying is being done programmatically, but there is no doubt it is on the rise. Both agencies and brands are planning on spending more, and allocating more resources, to software that can purchase digital media space for them. Circumventing the more traditional, human-based, media buying industry.

Programmatic doesn’t mean perfect however. So when we discuss the topic of programmatic media buying we should also talk about fraud. Ad fraud remains one of the top concerns when talking about digital media planning by media agencies, and brand marketers. 78% of brand marketers are concerned with ad fraud and bot traffic according to a survey by MyersBizNet. This topic should make marketers more eager than ever to discuss the quality of the publisher traffic when planning their campaigns.

A recent study conducted by two WPP media buying agencies, estimated that fraudulent traffic could cost digital advertisers upwards of $16.4 billion in 2017 alone. According to Business Insider, this figure is more than double the $7.2 billion the Association of National Advertisers estimated would be lost due to ad fraud in 2016. A study from the World Federation of Advertisers (WFA) found that nearly 90% of the advertisers it polled are reviewing their programmatic advertising contracts and demanding more control and transparency.

Advertisers create campaigns with the goal of having views and interactions with their content from actual human beings. But humans aren’t always the ones creating the activity, bots can as well. The internet is surrounded by fraudulent activity, and when it happens there is no potential to drive real conversions due to ad fraud and traffic fraud abusing the advertising system.

Let’s put aside for a moment that this is a huge waste of marketing effort, it is also costing advertisers and media buying agencies a hefty percentage of their budget. According to ad verification company Adloox and cited by the Drum, Digital advertisers spend as much as 20% of their ad budget selling to penniless robots.

Luckily, the effects of fraud can be mitigated significantly. It all comes down to the execution of the campaign. A large percent of fraudulent behavior is created due to poor execution strategies.

What is Ad Fraud?

So what is Ad fraud anyway? There are many different types, but generally speaking ad fraud occurs when purchased ads are shown on sites that contain artificial traffic through bots, or when programs frequently click on advertisements to receive higher engagement numbers.

Obtaining sourced traffic – traffic acquired by a third party and therefore unverified – is also causing problems for marketers. A recent study by ANA found that 3.6 times as much ad fraud comes from sourced than non-sourced traffic.

Recognizing Ad Fraud

Click Fraud is the most common type. This happens when bots click on ads to increase click rates and impressions to drive more revenue to publishers. When this occurs, marketers end up wasting money on useless impressions. Buyers can get burned when their ads appear on an ad server where their target audience never actually sees them. Ads can also be rendered ineffective by being displayed next to insignificant content.

Fraud has been apart of the industry for many years now. And it doesn’t look to be going away anytime soon. There has been a growing push within the industry for more effective fraud controls. According to the World Federation of Advertisers and cited by Business Insider, “Over the next 10 years, the global cost of ad fraud is projected to rise to $50 billion”. There is no question that something must be done to mitigate the impact of fraudulent activity.

Moving forward and leaving fraud behind

What can be done to mitigate the effects of fraud and increase the effectiveness of programmatic media buying? As always the answer lies in an evolving set of Best Practices that are changing to meet the demands of changing technology, threats, and available solutions. The recent emergence of Blockchain – a database that is shared among parties in an ad campaign, storing data such as impressions and audience segments – might hold some promise. According to Forbes, “a brand or retailer buys ad impressions through a real-time buying platform that finds target audiences in ad exchanges that provide access to online publishers’ inventory. The impressions are encrypted and broadcast to each participant in the blockchain, who approve the impression. The block becomes part of the permanent ledger and the impressions are verified.”

There are also several movements underway within the industry to identify quality ad sellers and resellers so that buyers can shift media to authorized supply paths. The goal is to significantly reduce spending on fraudulent inventory. One such effort is from the IAB Tech Lab and is called ADS.TXT.

Be sure to ask your suppliers what steps they are taking to combat ad fraud. Use 3rd party technologies to identify bots and ensure that you do not (re) target them. Bots won’t make purchases or fill out online forms, so if ads are leading to sales – or other forms of human interaction – keep advertising on those sites.

Problems can arise whenever technology changes or races ahead of us, and Best Practices can lag behind. As always, it is important to exercise caution and learn as much as you can about the issues you might be facing. Programmatic Ad Buying is going to be with us all for the foreseeable future. And so will those annoying bots.

 

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