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  • Pritham Reddy

How agencies to handle ad fraud?



Digital advertising revenues hit $19.6 billion in Q1 2017, climbing 23% ($3.7 billion) year-over-year, according to the Internet Advertising Bureau (IAB)


Programmatic buying is still on the rise – it is one of the fastest growing segments of digital marketing due to its inherent abundance, efficiency, and the control it provides to advertisers.


$10.1 billion was spent on programmatic display ads in 2014. By 2016, this had risen to over $25 billion, and eMarketer estimates that in 2017, programmatic display spending will reach nearly $33 billion.


Bot fraud will cost the industry $6.5B in 2017


According to an Association of National Advertisers and White Ops study, The Bot Baseline Report, $7.2 billion of digital advertising revenue in 2016 (up from $6.3 billion in 2015) was predicted to be based on fraudulent activity. In 2017, that number is set to decrease approximately 10% to $6.5 billion, which, despite the decline, is still a huge percentage of total digital advertising revenues. The ANA credits media agencies for improving controls in programmatic buying, making the automated ad buying processes “no riskier than general market buys.” The World Federation of Advertisers predicts that globally ad fraud will cost advertisers $50B by 2025.


The Bot Baseline Report also found that:


  • Display ads sold by publishers with higher CPM rates (greater than $10) were 39% more susceptible to bots.

  • Bots account for 9% of display ad views and 21% of video ads.

  • Between 3% and 37% of programmatically bought ad impressions were found to be from bots.

  • 3.6 times as much ad fraud came from sourced than non-sourced traffic. Legitimate traffic sources such as search engine advertising, social media advertising, content marketing etc. are not cheap. Be wary of anyone stating they can get you a high volume of visitors at a low cost.

  • Less than 2% of fraudulent activity is from mobile app environments and mobile web display buys.


Do ads purchased programmatically even have the potential to be viewed by a human?


When ads are served that do not even have the potential to be viewed by a human user, it’s the advertiser who loses out. And this is a huge concern for the industry.


Advertisers want to buy viewable impressions – they want their ads to be seen!


The problem is that, according to the Bot Baseline Report, more and more, bots are exhibiting behaviors that cause them to look more human, which have made them better at evading detection. Over 75% of the fraud observed in this year’s study came from computers containing both a human and a bot on the same machine.


So what can be done to increase the view-ability of ads for advertisers? How can advertisers know they are purchasing impressions that have the potential to be seen by a human?


The industry standard for view-ability is as follows:


  • Desktop display – at least 50% of pixels in view for at least one second

  • Desktop video – at least 50% of pixels in view for at least two seconds

  • For Rising Star ads or ads larger than 242,500 pixels/970 X 250, the standard calls for 30% of pixels in view rather than 50% for at least one second.

Advertisers are willing to pay big for vCPM (Cost-per-thousand viewable) impressions. But if advertisers have to pay more for a “viewable” impression, doesn’t it imply that the regular priced impressions are not viewable? A better solution for advertisers would be to take steps to increase viewability and eliminate fraud so that the concerns for all advertisers decrease, rather than simply charging more for “fraud-free” or “viewable” impressions.


Increasing Ad Viewability


With its Active View, Google has created a framework for publishers to get viewability measurement data and use it to understand and improve the value of their ad inventory.


In Active View terms, “An impression is considered a viewable impression when it has appeared within a user’s browser and had the opportunity to be seen.”


According to Google, publisher viewability averages at 50.2%. The IAB has produced a primer to aid publishers in their endeavours to increase the viewability of display and video ads on their site, directly addressing:


  • Site redesign to ensure that ads are positioned optimally

  • Latency improvements to cut down on long rendering times; and

  • Ad tech strategy and policy changes to bring tactics in line with best practices.

Reducing Advertising Fraud


Advertisers can reduce the extent to which they are the subject of advertising fraud by demanding more transparency from all the vendors they are involved with. According to eMarketer, more than 60% of US ad agency professionals are concerned with the quality and transparency of their inventory sources. Buyers need to explicitly be in the know about where their ad is being served, who sees the ad, to what extent the ad was seen, how long the ad was viewed etc., and they and should be demanding this information. 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.


Forbes published an article earlier this year about Los Angeles startup, MetaX, which aim to solve the ad fraud problem using blockchain – a database that is shared among parties in an ad campaign, storing data such as impressions and audience segments. 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.”


Ads.txt, released in May 2017, is a new tool that is impactful in fighting ad fraud. Ads.txt (Authorized Digital Sellers) is a simple, flexible and secure method that publishers and distributors can use to publicly declare the companies they authorize to sell their digital inventory, with the goal of increasing transparency in the programmatic advertising ecosystem. Publishers can post a list of Authorized Digital Sellers to declare allowed sellers and resellers of the publisher’s inventory. Buyers can use ads.txt files to shift media spend to authorized supply paths. The goal is that publishers will receive revenue for ads purchased from their inventory, and buyers will not waste spend on fraudulent inventory. (Source: Iab Tech Lab)


Tips


The Wall Street Journal provides these tips to reduce the likelihood of getting your ads “seen” or clicked on by bots rather than humans.


  • Bots are nocturnal: Most human Web users tend to sleep during the night, but White Ops found that bot percentages spiked between 11 p.m. and 5 a.m, so advertisers might consider not running any ads during the night.

  • Bots like some types of content more than others: Sites related to finance, family and food had among the highest percentages of bot traffic, the study found, ranging from 16% to 22%. Tech, sports and science-related sites had among the lowest bot percentages, ranging from 3% to 4%.


Buzzcity recommends advertisers do the following:


  • Ask your suppliers what they are doing about ad fraud.

  • Use 3rd party technologies – like comScore, DoubleVerify, Moat, etc. – to identify bots and ensure that you do not (re-) target them.

  • Go with your gut – if something looks too good to be true, then it probably is.

  • Bots won’t make purchases or fill out online forms. So if ads are leading to sales – or other sorts of human interactions – keep advertising on these sites, and drop non-performers.

Pritham Yaramaka

LinkedIn

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