Ad Fraud: Long Term Industry Killer

There’s always something happening in the advertising business, and this week it’s fraud. Now that the dirty little secret that a high percentage of ad traffic comes from non-humans or bots, everyone is wringing their hands.

 

online fraud

online fraud (Photo credit: ivers)

Actually, the problem of fraud is not new. It originated almost as soon as publishers moved online. And the fact that there’s more data than ever before doesn’t solve anything. Each one of the accredited fraud detectors or viewability detectors has a different method of detection, and no only doesn’t anyone know what they’re detecting, they may actually all be detecting slightly different kinds of fraud.

 

There really ought to be a common data standard for what constitutes fraud, and that standard should be applied by both buyers and sellers. However, the industry is now so fragmented that it will be difficult to force the adoption of a standard unless—unless the people with the money, the people in brand marketing, demand it.

 

Right now, although it’s sad. almost everyone involved in the ecosystem is benefitting from fraud in the short term while they are also suffering from it in the long term.

 

Publishers are suffering because in buying cheap traffic, they’re jeopardizing their brands and their ability to command the eCPMS for premium content. By opening up too much inventory to RTB, they drive their own prices down in an effort to fill every ad unit.  They may be filling all their availability, but not with the income they want. Perhaps they’d be better off running some house ads than selling themselves to the second lowest bid.

 

Advertising agencies are suffering because they are not getting the return on their clients’ investment that the clients want. On the other hand, the harried media planner is buying audience, and desperate to use all the spend to get the commissions and fees the agency needs for survival. Long term, not being able to produce real conversions on the client marketing dollar will come back to haunt them.

 

Brands are suffering because they are spending large amounts of money to reach customers and increase conversions. Sure there’s “brand lift,” but at the end of the day brand lift doesn’t pay the bills. Customers pay the bills.

 

At ZEDO, we’ve got elaborate systems to block ad fraud and bot traffic before we serve the ad. This is something our team has to stay in front of on a daily basis. We also serve on all the industry working committees involved in trying to develop standards and processes. Because online advertising is still a relatively new business, we’re all on the same journey. Long term, it is not in anyone’s best interest to tolerate ad fraud.