Advertising fraud: there's still plenty more to do
Stephen Broderick shares six principal steps advertisers can take to ensure that their digital media budgets are less vulnerable to fraud
Three years ago, the issue of ad fraud was catapulted from the marketing trade press to make front-page news in The Times of London. Spurred into action by the U.S. Association of Advertisers (ANA) study highlighting the $7bn annual cost of ad fraud globally, a series of investigative articles in early 2017 took the story mainstream. As we approach the third anniversary of that media storm, it’s worth considering what – if anything – has changed.
First off, it’s fair to say that bot fraud – where computers not people rack up fraudulent impressions that never get anywhere near a human eyeball – is showing no signs of going away. It’s a well-established, multi-billion-dollar, criminal concern that feeds off the digital advertising business, and whatever the media and marketing community does, the fraudsters remain one step ahead.
That said, in the past three years ad fraud has become much better recognised. Advertisers and agencies have definitely become more aware of the issue and the steps they can take to mitigate risk.
The latest ad fraud study from the ANA and White Ops was published in May 2019, and they reported a projected 11% fall in marketing investment lost to ad fraud since 2017, down to $5.8bn annually. The report quite rightly claims this as a real win, given that digital ad spend increased by more than a quarter in the same period.
Nevertheless, nearly $6bn represents significant and unacceptable levels of wastage to fraud. It’s fair to say that the extent to which advertisers suffer ad fraud depend on a number of factors including:
- The environment in which they’re advertising (desktop vs mobile)
- How they’re buying their digital media inventory (programmatic vs non-programmatic, involving some vs complete human oversight in the buying process)
- Advertisement format (display or video)
As the ANA/White Ops report shows, those brands that buy desktop video ads programmatically are likely to be suffering the highest levels of ad fraud. Advertisers, media agencies, ad tech suppliers, and publishers can all do more to minimise the risks and cut fraud further.
Six steps to combatting ad fraud
Our experience of working with the world’s leading advertisers – over the past three years, but also over the past 20 years, when both good and less good practices have become endemic in the industry – suggests there are six principal steps advertisers can take to ensure that their digital media budgets are less vulnerable to fraud.
1. Consider what proportion of your budget should be spent on programmatic. Programmatic is the largest source of digital ad fraud activity as it is driven almost entirely by technology, with little one-to-one, human contact with the final source of media the inventory.
This is where fraudsters have developed all kinds of devious ways in which the ecosystem can be gamed, inventory manipulated, and virtual users and fraudulent browsers deployed to boost the number of ads available to be sold to brands.
2. Evaluate how much transparency and control you really get into the source and quality of ads bought on your behalf. Make sure you put the right framework in place with your agency to monitor and manage both source and quality.
Remember that direct (rather than programmatic) relationships with publishers are much less likely to result in ad fraud, although it is true that good practices can minimise the risk of ad fraud in programmatic.
3. Ensure you adopt best practice recommended by the advertiser industry trade bodies to limit your exposure to fraud. The World Federation of Advertisers (WFA) has published a Global Media Charter, an eight-point manifesto for online media and media data transparency to help reform the digital advertising ecosystem.
The CEO of our new sister company Digital Decisions, Ruben Schreurs, is involved in this initiative. The ANA has established a Trust Consortium in partnership with specialist media lawyers, Reed Smith, and I’m involved in that programme.
4. Ensure that your agency contract specifies requirements for managing the process of placing ads online. Clauses should cover the active monitoring of media quality and delivery, highlight risks, and prevent nefarious practices. This should ensure advertisers don’t end up paying for demonstrably fraudulent activity.
Both the ANA and UK advertiser body ISBA have included content within their best practice contracts to help minimise the risk of ad fraud.
These provide frameworks and guidelines within which agencies can work, and specify (a) what can and can’t be bought and (b) requirements to monitor quality of inventory, on-going.
Both model contracts include clauses that stipulate the implications of non-compliance to these frameworks, to ensure that advertisers don’t pay for ads placed and served fraudulently.
5. Review contracts regularly to ensure that terms and conditions are regularly updated. The digital advertising ecosystem changes so often and so fast that it’s vital to review contracted strategies designed to prevent ad fraud on a regular basis and test the strength of these terms.
6. Actively work with industry working groups that are trying to implement solutions to limit the risk. These include TAG, the Trustworthy Accountability Group. This is a cross-industry accountability programme, working with agencies, brands, and other industry organisations and aims to develop processes in partnership that can be adopted globally.
Stephen Broderick is Global CEO at FirmDecisions, a compliance specialist