Deconstructing digital ad fraud

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Noble People CEO gives the lowdown on what's happening and why

The dirty "F" word in advertising is hard to avoid these days. It’s a hotly debated issue at industry conferences and the subject of frequent press articles. Yet when an advertiser tries to wrap their arms around what digital ad fraud really is, it starts to seem overwhelming and complex.  

It’s actually not that complicated.

Here's a digestible breakdown of what’s happening, why it's happening, and what marketers should do about it.

The quick lowdown on ad fraud
Most digital ads are anything but engaging. Some estimates of unseen ads go as high as 70%. Meanwhile, the standard industry measure is half a banner ad viewed for 1 second. This is a pitiful standard. If you raised it to something as mightily powerful as a full banner ad for 5 seconds, my guess is fewer than 5% of Internet ads would qualify.

Sometimes they aren’t seen because they aren’t loading on a page because of fraud, or sometimes it's just a matter of bad placement. Bottom line: Who cares? The point is, they aren’t being seen, which means they aren't effective. And this is a waste of precious ad dollars.

How ad fraud was birthed
Digital media sellers are good at telling stories with inflated numbers to marketers who want to believe them. Digital media sellers were built selling to digital media agencies, and they were both on the same team with the same goal: port money from traditional media over to digital.  

Meanwhile, marketing teams were being challenged by CEOs to "become more digital and accountable." And thus was born the practice of inventing bogus numbers to sell to clients. Clients were being told that the last banner someone saw drove the sale even though that banner had never even been clicked.

This had just enough plausible logic for people who wanted to believe. And it worked. And the media dollars invested in digital got bigger and bigger. And the time that tech and agency staff needed to deliver on this increased. Problem was, the actual sales, market share, and profits did not.

When it all really starting going awry
Before long, word came down from the advertisers who had initially bought into the strategy to go and do it for less. But companies (even media agencies) don’t like doing things for less. So they invested in the ad-tech companies they were supposed to be auditing.  

They got creative about how they defined their fees and got rebates from the media sellers. And poof! Agency trading desks were born.

So the media agencies that were supposed to be auditing the media sellers now had skin the game. Why would they tell their clients the media they were profiting from, and betting their business on, was getting worse (or had always been bad)?  

And that brings us to today, with the media agencies doing the minimum they can just to save face. Like creating a standard of "in view" to be half a banner for 1 second and setting that as the benchmark.

So what should advertisers do now?

  1. Trust your own common sense. If something feels too complicated, don’t buy it until you truly understand it.
  2.  Don’t trust in numbers alone. Figures lie, and liars figure. If you are unable to put yourself in the shoes of the customer that is seeing the ad and truly believe that ad is having an effect on them, then don't buy in. Especially just because of some big data presentation.
  3.  Partner with a media agency that has zero skin in the game and doesn’t hide how they make their money.
  4. Never trust a vested auditor. Find independent auditors whenever you can. Get close to companies that make the content or own the platform: Facebook, Vice, Disney, Twitter. Work directly with them or an agency that can audit them independently.

The only way to combat ad fraud is to understand all the ways it can happen, and then raise your standards to ensure that you are getting ROI on your marketing investment. And while that’s the essential thing to do for your company, it’s also the way to do right by consumers so every encounter they have with your brand is a positive one.

Greg March is CEO of Noble People.


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