Ad Fraud Ruins Analytics

Ad fraud. The gift that keeps on giving.

Marketers are beginning to understand that ad fraud affects their actual spend (they get less for their ad dollar), but they haven’t yet caught on to the fact that it affects their metrics as well.  Fake traffic and clicks generated by bots throw off analytics and can cause a marketer to optimize a campaign for the wrong things and waste even bigger dollars.

One way to make ad fraud less lucrative for the fraudsters is for marketers to stop paying for “each,” or volume, and start paying only for quality. That would mean coming to terms with the fact that low quality traffic is even worse than no traffic at all. At the recent IAB Annual Leadership Summit, P&G Chief Brand Officer Mark Pritchard announced that his company, one of the largest advertisers in the world, will only pay for traffic if they can see where it is coming from and whether humans actually viewed ads. Since P&G spent $7.2 billion last year, his announcement caused more than just a slight ripple in the industry.

A casualty of the big wave that rolled over the media supply chain happened to be Facebook, which has always provided its own metrics, and has announced this week that it will allow its ad platform to be verified by the Media Rating Council’s standards.

This will be fun.

And you can’t blame this all on the rise of programmatic. It’s not how the ads are sold or bought, but the kinds of sites selling inventory on the exchanges. Most of the bots happen to be in programmatic ad exchanges, because, as fraud researcher Augustine Fou says, “when those bots cause an ad impression to load on a “long tail” website, they earn ad revenue for that site. Bots don’t make money by causing ad impressions on mainstream publisher sites.”

This is the drum we have been  banging for what seems like forever: buy smaller, higher quality audiences. Again, from Dr. Fou,

one key thing for [marketers] to realize is that there are only a finite number of real human beings. So when they target real human identities, the volumes of ad impressions will probably be far less than they are buying now—but that is a good thing, because they want their ads to be shown to real humans, not bots.

Marketers know who has purchased from them before, who has signed up for email newsletters, or who has visited their website.

By onboarding their own data, they can more easily achieve the identity targeting we just talked about—and thus make their media much more effective because they are actually getting their ads in front of real humans.

We are not sure why this is such a difficult lesson for marketers to learn.

 

 

 

 

 

 

 

 

 

Mobile Video Monetization Strategies

Everyone in the industry is wondering  when mobile video will begin to be monetized properly (by which we mean in proportion to the time consumers spend watching it).As part of our work on the IAB Digital Video Committee, we attended a meeting  to learn what may be holding the industry back from getting the kind of ad rates for mobile video that it deserves. Three different issues emerged from the meeting: how publishers feel about available video formats (often unsuitable for mobile), the state of cross-device measurement (just getting started),  and the unfamiliarity of TV media buyers with the digital video environment.

You may already know that ZEDO pioneered a format called InArticle, which later was reinvented by Teads as “outstream video.” While this format has been highly successful for us, we know it is not for everyone, and we  heard two publisher panelists (Meredith and Weather Channel ) say that they will never run out stream because they don’t like the user experience on their sites. They talked about 15-second preroll as preferable, although they admit that most advertisers send them 30-second spots. These publishers are pushing back at agencies and brands who try to use existing TV creative, esp. 30-sec spots, on mobile  have pretty good statistics on completion rates, and they feel shorter is better. In fact, one attendee suggested five-second video, just to get the brand’s name in front of the audience without offending it.

Because there is a relative scarcity of pre-roll another format publishers are testing for video is mid-roll, Facebook is rolling these ads out right now to see how well they are accepted.

At ZEDO and ZINC, we are testing our own version of pre-roll, as well as a new format we call “polite Swipe Up.” Our objective with our formats, which achieve high visibility and engagement, is not to antagonize site visitors. In the Digital Video Committee, several publishers complained that group M’s demand that all Ads be 100% viewable means that they waste inventory and annoy viewers by upping the frequency of ads while trying to  achieve those viewability numbers.

The issue of cross-channel metrics also came up in the meeting, because marketers are only beginning to be able to follow consumers from device to device and from home to work. Before investing in digital video, they need more assurance that they are following the same customer from display to video to TV.

And then there is the “people problem.” TV media buyers often don’t buy digital video, or want to pay less for it, because they don’t know how to buy it. This is such an industry-wide problem that IAB is preparing a Digital Video Guide and a curriculum, and will hold workshops and classes to educate media buyers. The guide will be introduced during the Digital New Fronts, and the education programs will begin shortly thereafter.

 

 

 

 

Legacy Media Adopting New Models

Time Magazine is one of the legacy names in the media business. But like all  media, it is struggling to adapt to new business models. In a Wall Street Journal podcast interview, Jen Wong, COO of Time, discussed her opportunity to grow the Time subscription business as well as some of its forays into new business models. The most interesting area of the podcast for our offerings is Wong’s assertion that her offerings can now compete against Facebook and Google in the ability to provide brands and agencies cross-device attribution.

Even in an age of difficulty for traditional publications, Time still has 30,000,000 subscribers — about the same number as Netflix. It has also built up the infrastructure to sell magazines from its own database of current and former subscribers. The company expects to grow its business using that consumer marketing infrastructure. And Time also owns The Foundry, its content marketing arm. Content marketing, one of the hottest topics in media, is an area many newer publications, like Buzzfeed, are also getting into, because there is an almost insatiable demand on the part of brands for appropriate content.Wong predicted that the branded content market would double to $9 billion by 2018, and that her company would have a substantial segment of it. Foundry both creates  content and operates websites on behalf of brands, and even now it’s the fastest growing segment of Time’s business, growing about 2x year over year.

However, Time is in the same position as most legacy media: while it is branching out in new directions, three quarters of its revenue still comes from print advertising, which is an endangered source. That’s the conundrum for the established media companies: how much to invest in new platforms that have not demonstrated the capacity to monetize as well as their former businesses.

Still, Time considers native, which is now 20% of revenue, a needle-moving bet for digital, along with people-based targeting and video.

People-based targeting is a euphemism for the ability to target a user with device attribution — finding the same user on mobile and desktop. This is Facebook’s strong suit because of the size of its dataset, but Time has now acquired Viant and Adelphic to compete in this arena. With these acquisitions, specific targets can be found on the web, and then can be attributed across channels in a manner similar to what Facebook offers. In Wong’s view, agencies are looking for alternatives to Facebook and Google, and unlike most publishers, Time does have people-based data which would seem to be a major advantage, especially if the metrics Time provides to agencies prove more accurate than Facebook’s.

In video, Time has a pre-roll business that is growing, and has launched an OTT services as well. In addition to the Time subscriber base,  Viant brought 1.2 billion profiles, and 700,000,000 device IDs in the US, and into that database Time contributed its own 100 million expired and 30 million active subscribers. To make it simpler for agencies to transact against that data in an era of programmatic advertising,  the company even developed its own DSP — although Wong said she would not advise other publishers to try to do this if they didn’t have as much data.

Data is the area in which publishers now must compete against Facebook and Google.

 

 

 

 

 

 

 

 

 

 

 

 

Facebook Faces Competition from Snapchat

On the day Snap, Inc.(SNAP), the parent company of Snapchat, became a public company, its stock soared 44 per cent.  That’s because Snapchat reaches a demographic everyone wants to reach: young people who are just forming allegiances to brands. But it’s also because there’s a dirty little secret out there: Facebook advertising doesn’t work.

The Copyranter blog from Digiday says it best:

 You know who knows better than anybody that Facebook advertising doesn’t work? Facebook! Of course they do! All that proprietary data they’ve got on 1.8 billion people, they know pretty much everything about brands, consumers, and interactions between the two. That’s an unprecedented level of lying, even in the skeevy ad industry. Or maybe you think this is all just conspiratory “truther” talk?

We’ve always loved Copyranter because he calls it like he sees it. Last fall Facebook ran into trouble three different times over incorrect or incomplete numbers:

Facebook has always been very purposely opaque and doesn’t share its methodology and algorithms with anyone, which makes it impossible for anyone to do any objective reporting — or regulating — of those numbers.

Then last September, right about the time it was announcing that its first three quarters profit was near $6 billion, up from $3.69 billion in 2015, it also reported a big whoopsie: It had been inflating video view numbers by 60-80 percent (94 percent in Australia).

Facebook has now been forced by P&G at least to allow third parties in to verify its numbers, and perhaps that will help. But Facebook has done its job: it has soaked up advertising dollars not only without producing accurate and verifiable returns, but with at the same time destroying the creativity that made brand ads bearable for viewers. Facebook does not have engaging formats; its entire value proposition is targeting. Well, guess what? It’s difficult to engage attention without creative, especially on a site where people do not come to buy.

The shift from brand advertising to direct advertising that accompanied the dream of “metrics” has forced advertising agencies and brands to change their models and their goals. No longer do we expect advertising to create either brand lift or sales — instead we show the boss meaningless metrics, such as Facebook “likes.” At the end of the day, those do not move the sales needle.

On the other hand, Snapchat filters are really countable; when a person sends a snap with a sponsored filter, that person has actually made a choice to engage with a brand. It’s a very different energy from the energy used to click on “like” on Facebook.

We’re watching publishers drift away from Facebook live, and we predict they will continue to drift away from Facebook as it continues to fail both the sell side and the buy side.

2016: a Banner Year for ZEDO

For ZEDO, 2016 was the year  the ZINCbyZEDO Innovations Suite of video formats pulled out to lead the market in both completion rates and viewability. It was also the year we became known for our ability to outperform much bigger competitors, even those who offered customer incentives we didn’t match. At the end of the day, results count, and in head-to-head trials, we almost always emerged the winner. You can imagine how excited we are about 2017.

While ZEDO has long been known as one of the largest independent ad servers, ZINC is a relative newcomer to the scene. ZINC is a division of ZEDO that we launched three years ago for the express purpose of providing a secure, end-to-end platform for both advertisers and publishers to combat the obvious problems associated with programmatic buying: lack of viewability, downright fraud, and malware.

ZINC’s first attempt to penetrate the market came with the Inview Slider, a tasteful display ad that only appeared when a viewed scrolled down the page. It was very well received, but we knew we had to keep innovating, and last year, we were first to market with the inArticle video format, which we developed before out-stream was a “thing.” In fact, we called it “InArticle” because we felt that best described where it appeared and there was no other category. We think we actually invented this category.

And then a Nielsen Study found that when ads are viewed in an outstream format rather than as pre-roll, even skippable pre-roll, purchase intent is increased by 50% for the advertised product. Most important, outstream increases purchase intent by 74% among those critical millennials. Outstream also produces 60% brand recommendation on the part of millennials. This format overtook most other attempts to provide video advertising, because 44% of millennials felt it fit naturally with other content and made ads more likable.

Our own experience proved that outstream could be good for both brands and publishers, and it quickly caught on. Soon we were in a very competitive landscape, in which other companies also sold outstream. But ZINC’s outstream ads showed their advantage over competitors.  We saw 70% completion rates, very high for the industry, and certainly higher than the 8-12% for skippable pre-roll.

We also delivered scale, because we have 18,000 publishers in our network. We delivered 109 million monthly uniques and 80 billion monthly impressions, even after we spent most of the year purging our network of publishers we felt were not brand safe or appropriately premium.  Our CTRS were among the highest in the industry, between 1.25 and 1.3%.

Half way through the year, we launched a mobile FLIP ad unit, and three variations of a SWIPE up format. And we introduced a self-service platform.

However, one of the things we are most proud of is that we made the Online Trust Alliance’s Honor Roll for the fifth year in a row, having demonstrated that our policies with respect to privacy, data security, and native ad serving were aligned with the highest standards in our industry.

Bring on 2017!

 

 

 

 

 

 

Will Numbers and Scale Give Way to Value?

We’ve noticed a movement lately away from scale,  the high volume content strategy of major publishers. While they thought they needed to publish more stories to gain more readers, they’ve now overwhelmed those readers in a deluge of content, some of it not worth viewing. They then run ads against all that content, further inconveniencing visitors. This is the model of The Huffington Post, which recently modernized its platform to let anyone contribute without moderation. We predict this will be a strategic mistake for Huffpo. This is the old way: publish as many stories as you can, reblog as much as you can, aggregate the rest, and use Outbrain and Taboola.

Quite frankly, this “more is better” strategy has buried the good stories in the crap.

A few new publications have decided to do it differently. We’re written about Josh Topolsky’s new publication, The Outline, on the ZINC blog.  The Outline strives to run fewer, better ads against longer form content that is edgy, but not trivial. The new Bill Simmons site, The Ringer, publishers around two dozen stories a day, and The Information, Jessica Lessin’s subscription site, publishers just two.   The hope is that by publishing fewer, better stories, these publishers will draw more actual engagement. That certainly seems to be true in the case of The Information, which doesn’t accept ads and has about 10,000 subscribers paying $399 a year. It also has active commenters from among its subscribers, and a Slack backchannel on which readers can talk to reporters.

Of the ad-supported sites, fewer ads and deeper niches will win over time. This will be good for all ends of the ecosystem, because publishers who have scarce inventory that is actually desirable can charge more for it. And advertisers, even if they buy programmatically, will have a better understanding of the audience they’re buying.

Which brings us to a point we’ve made repeatedly. Scale was a bad strategy for digital advertising. From the first, the infinite supply of content drove ad prices down and made it impossible to price the premium sites, or the desirable content, higher than everything else. That in turn led to the emphasis on click bait and viral content. And to ads that generated poor ROI.

An exception to this has been video advertising, which provides a better return because it is more expensive to produce and therefore there’s less of it. It’s the good old law of supply and demand: when there is less of something, its price always goes up.

Now that publishers realize that more is not necessarily better, it is time to educate advertisers. What will help? The growing perception that fake news and non-brand safe sites should not be part of anyone’s marketing program.

 

Google Blocks Twice the Number of Bad Ads as A Year Ago

Despite the “moon shots” under development by its Alphabet decision, the Google organization still makes its living through advertising. According to its most recent earnings report, Google grew 8.3% this quarter, largely driven by search ads. However, the company is looking to mobile for new sources of ad revenue, and that’s not working quite as well (yet).  According to the Wall Street Journal, 

The search for new ad revenue comes with a downside: Users are seeing more ads, but advertisers are paying less for them. While ad clicks increased 36% in the quarter over a year ago, advertisers’ prices for those ads fell 15%. Both figures were the highest in at least three years.

The gap between the prevalence of ads and their prices was previously driven by the increasing share of mobile searches, because advertisers pay less for mobile-search ads than desktop ones. In the fourth quarter, the company attributed the gap to the growing share of YouTube ads, which generally earn less than ads shown above Google search results.

Google has also tried to preserve its reputation by culling out bad ads. Google said it blocked 1.7 billion bad ads in 2016, twice as many as in the previous year. That’s a pretty shocking comment on the state of ad fraud in our industry.

Ads that are misleading, inappropriate, promote misleading products or trick users into installing harmful software are generally deemed “bad,” Google said. The company also blacklisted ads that were once considered acceptable in 2015.

Payday loans that carry an annual interest rate higher than 36%, for example, were banned from appearing as Google search ads last year. The company was applauded for its move, as the measure was expected to cost Google millions in revenue. Yet digital loan sharks quickly adapted to Google’s newfound rule, as many loan companies now offer payday loans with an APR as high as 35.99%.

And there’s a new genre of “bad” ad called “tabloid cloakers.” Tabloid cloakers are misleading ads that feature “news” on their surface, but when clicked lead the reader to an unrelated selling message:

One example the company shared was about an ad showing Ellen DeGeneres and aliens. However, consumers who click on ads like this are taken to a site selling weight loss products, for example.

Google said it suspended 1,300 accounts for tabloid cloaking last year. In one sweep, the company took down 22 accounts that were responsible for displaying 20 million cloaker ads over a one-week period.

Can you imagine being Google and having to keep up with all these insidious trends?  And that’s before the company gets to dealing with fake news sites. We’re still a long way from a clean supply chain.

Brand Ads Work

It is not necessary to stalk a tiny audience to get results. Brand advertising, with good creative and a high degree of creative works even better, without offending viewers. We believe publishers should encourage their advertisers to offer better creative, which will then pull people to their sites as less comfortable techniques never will. Publishers need to get in a partnership with their ad partners, agencies need to stress creative, and the ad industry as an entirety ought to move back to brand advertising.

Although this year’s SuperBowl game was indeed worth watching in its own right, several people have commented in our social media feeds that they “teared up” during SuperBowl ads, specifically the Coca Cola ad. When was the last time you heard somebody mention an emotional reaction to an ad?

The NYT summary of the ads revealed how powerful they can be:

• Coca-Cola and Airbnb were seen as making political statements on Sunday with ads that touched on immigration and diversity.

• People were searching Google for ads from Budweiser and 84 Lumber and those starring Justin Timberlake and Justin Bieber.

• Fox and the N.F.L. have been trying to avoid overtly political ads, with Fox deeming one commercial “too controversial” last month for featuring a border wall — but that’s tough to do in today’s environment.

We cannot repeat this often enough. It isn’t advertising per se that people try to block. It’s ads that have no relevance to their lives.

SuperBowl ads are not finely targeted. They are simply targeted to the audience watching the SuperBowl, or even to an audience that doesn’t care much about the game, but cares about the sheer creativity invested in the ads, and will go find them online. The best example of that was the 84 Lumber ad. Who had heard of 84 Lumber before yesterday? And who would run a performance ad for a construction company?

But that’s not what 84 Lumber did. The company had three goals for the ad: One was to generate awareness, the second was to position 84 Lumber as an employer of choice, and the third  was to attract talent  to fill the number of positions 84 Lumber has open over the course of the year, its chairman and CEO said. The ad turned out to be more political after President Trump passed the immigration ban, and its ending had to be altered because Fox wouldn’t run the original, but the altered ad functioned as intended.

Let’s call this a cross-channel promotion, since SuperBowl ads can now be viewed outside the game itself. The ad was viewed 4,000,000 times on YouTube before the game, and the company’s site received 6,000,000 requests in the hour after the ad ran. The site was swamped. The ad accomplished its objectives, because now everybody knows who 84 Lumber is and what it stands for.

Trustworthy Accountability Group

The Trustworthy Accountability Group (TAG) has accomplished an incredible amount during its first year, including rolling out a TAG Registry, an Anti-Piracy Initiative, Certified Against Fraud, Certified Against Malware,  and updated Inventory Quality Guidelines. Now the work begins: to round up more participants. The early adopters are already on board: 127 companies are already TAG-Registered. To be registered, companies must complete a self-assessment and attest to having certain processes and procedures in place and a plan to keep them in place for the coming year. TAG Registered companies have been verified as legitimate participants in the digital advertising industry through a proprietary background check and review process powered by Dun & Bradstreet and approved by TAG. Once registered, companies are awarded a TAG-ID, a unique global identifier that they can share with partners and add  to their ads or the ad inventory they sell.

130 people, myself included, have completed Compliance Officer Training, and have been designated Compliance Officers for their companies.

I first became involved with the Trustworthy Accountability Group last January, when it held a meeting at the IAB Annual Leadership Conference. Because I’ve represented ZEDO for five years on several industry initiatives that fit our “high-road” approach to partnership with both advertisers and sellers, I attended the meeting and listened to the plans. I had no idea how fast they would move.

By the end of the year, TAG had released a suite of anti-Malware tools, including “Best Practices for Scanning Creative for Malware,” a glossary of terms that establishes a reference of malvertising types, and a Malware Threat Sharing Hub, where certified companies can join a trustworthy collaborative network that qualifies and tracks malicious ads.

The Certified Against Fraud program, which was the last to roll out,  is open to participation by buyers, direct sellers and intermediaries across the digital advertising ecosystem.  Requirements to achieve the TAG “Certified Against Fraud” Seal differ according to a company’s role in the supply chain.  These requirements are outlined in details in the Certified Against Fraud Guidelines.

Companies that are shown to abide by the Certified Against Fraud Guidelines receive the “Certified Against Fraud” Seal and can use the seal to publicly communicate their commitment to combatting fraudulent non-human traffic in the digital advertising supply chain.

When the group sent out its press release earlier this year on the first hundred companies to get registered, it reiterated its pledge to create industry transformation at scale. It was formed in response to multiple accusations by news sources and participants of lack of transparency. With TAG, the industry hopes to prove that it can regulate itself.

Germany’s BVDW Advocates for Transparency

In Europe, Germany is known as the country with the strictest privacy concerns. So it is no surprise that a Dusseldorf-based industry association has come up with a code of conduct for marketers, publishers, DSPs, SSPs, and data providers  that will bring some transparency to the programmatic market..

The Bundesverband Digitale Wirtschaft (BVDW) eV is a leading German advocacy group for companies  with digital business models, or who are part of the digital value chain. Anchored by member companies from various segments of the Internet industry,  it can provide a holistic view of the German digital economy and act as a spokesperson for the market. It’s a source of important information, facts and data for both those in the industry and those wishing to learn about it.

BVDW is committed to making the efficiency and benefits of digital services – content, services and technologies – transparent and thus promoting their use in the overall economy, society and administration.  Using the pillars of market development, market intelligence and market regulation, BVDW bundles leading digital know-how  to help shape a positive development of  what is now considered a leading growth sector in the German economy. However, as a central body of the digital economy, the organization also provides standards and binding guidelines for industry players for market transparency.

Over forty companies, including Adform, Appnexus, DataXu, Mediamath and Teads have signed the new agreement. Companies that are not members of the organization  can also sign, and signing companies are required to adhere to the code of conduct.

Companies that call themselves full stack providers will also be required to adhere to the standards, which stress transparency, safety and quality.

The aim of BVDW’s standards effort is to make programmatic more efficient and useful to German marketers and publishers by creating a controlled system. Germany is probably hoping to avoid the problems that surfaced  in the US, which deployed programmatic advertising without sufficient transparency, and caused many marketers problems, such as discovering their brands displayed in non brand-safe environments. Other issues like scanty metrics for determining ROI caused online advertising prices for programmatic to remain low years after they should have risen consistent with the number of consumers moving online.

We suspect that the focus group that created the code of conduct will have to continue studying the more complicated issues involved in programmatic, such as header bidding and programmatic TV:

The code of conduct is a first step to provide new impetus for the development of programmatic in Germany, says Julian Simons, deputy chairman of the BVDW’s focus group on programmatic advertising: “In a highly dynamic area such as programmatic, we cannot just establish rules within the market and then sit back. This continues to be a process of development, which will take current developments into account.”

One large looming problem is the absence of both Facebook and Google, said to control 75% of global ad spend, as signatories to the compact.