What You Need To Know About Digital Ad Fraud and How To Stop It

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It ranks as one of the Interactive Advertising Bureau’s (IAB) top initiatives for the next five years according to Randall Rothenberg, the organization’s President and CEO. In fact, the IAB spotlighted the issue of online ad fraud at its Annual Conference in February and has put a major effort into strengthening its Traffic Of Good Intent Task Force, a group of IAB members working to help solve the problem.

Here’s why getting rid of ad fraud matters. Marketers invest in media based on trust. They secure a media schedule and believe that they are getting what they bought. Buy 10 Million impressions and assume that 10 Million impressions will be delivered. Yet, in the digital world it doesn’t work quite that way. That’s because ad fraud acts as an evil intermediary to rob marketers from what they deserve.

What often happens is a percentage of these impressions are fraudulent. Non- human bot traffic will never buy anything nor be influenced to buy something in the future. That means these impressions present completely waste spending.  Thus, this investment in digital media does not perform as well. And marketers find it much harder to correlate what they spend and what they get in terms or sales or brand lift.

Identifying and reducing ad fraud is an excellent way to increase ROI for any digital media investment.  If more of your working media dollars actually work to drive results that’s a good thing. Let’s assume that 20% of your media buy is fraudulent. That’s a potential 20% reduction in ROI. On the other hand if you get ad fraud out of the equation that’s a 20% increase in ROI helping to bolster your bottom line.

Today, with ad fraud detection services, it’s possible to make an impact in the fight against ad fraud right now. What’s more these services are incredibly effective, very easy to implement and quite inexpensive. Here’s the calculus. If you spend a few cents CPM to insure that your $5, $10 or $20 CPM media but runs fraud free, you’d make that investment every time. Many marketers think of ad fraud protection as insurance to make certain that they get what they pay for.

Eliminating ad fraud from the digital ecosystem is good for everyone (except for the fraudsters). Marketers will get better results from their digital investment and will spend more on what works. Publishers will get improved results from their fraud free inventory leading to greater demand and higher CPMs. Plus, programmatic sellers who deliver fraud free inventory will benefit from a more robust, better valued marketplace.

Restoring trust to the digital ad market is essential. In an industry that had grown to $50 Billion in US spending in 2014 it’s important to make sure that buyers and sellers know more precisely what they are buying and selling. An erosion of trust will lead to less investment, reduced growth or perhaps even market decline. It’s remarkable that the digital ad market is only 20 years old with the first banner ad appearing in 1994. Digital now commands a larger share of total marketing spend and is on track to overtake television as the media of choice for marketers. What a run.

An excellent way to view the question of ad fraud question is to borrow something from the study of economics. It’s the concept of the virtuous cycle. This is where a successful solution leads to a desired result that in turn generates more desired results. As it apply to ad fraud:

Invest in fraud free inventory – get a better ROI – keep investing.

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