Ad Fraud — Robots Are Stealing Billions from Digital Marketing Procurement Budgets

Ah! -- the good old days of marketing services procurement! When we knew pretty much exactly how many people were reading that magazine with our ad nicely positioned inside the front cover, or watching our television advert in the middle of Coronation Street. But now ... how do we know what is really happening, or how many people are really getting exposed to our marketing material? Let alone whether they are the sort of people we want to address -- or if they are really people at all?

Inadvertently or not, when an agency places an advert online, on what it believes is a 'quality' website, a botnet can make millions of dollars a month by generating bogus clicks. Web advertisers paying for clicks on adverts that are not legitimate are losing not just revenue but potential customers. When the FT published “Mercedes online ads viewed more by fraudster robots than humans” the problem got mainstream attention. In the Mercedes-Benz case, of the 365,000 ad impressions, apparently 57 percent were “viewed” by automated computer programmes -- not people. Ad Fraud is undoubtedly a serious issue that is coming more and more to the fore. It is reportedly going to be responsible for costing marketers up to $11 billion globally in 2014 -- a 22 percent increase over 2013. 

So what's to be done about it? And what's it got to do with procurement departments? 'Everything' if you listen to VivaKi's president of audience on demand, EMEA, Marco Bertozzi. He puts the blame squarely at the door of procurement officers in search of cost savings, which are pushing agencies to chase increasingly lower CPM rates. He claims that 'value' doesn't really come into it anymore -- it's all about cheap inventory, the very place where ad fraud is more likely to operate. And he's partly right of course, but only partly. The Brands themselves know that this fraud exists, but they simply price it into their purchase -- so little incentive to do much about it exists. 

With the finger firmly pointed at the poor little marketing procurement person squirming in the corner -- the first thing to do is tell them it's not all their fault. There are lots of reasons why these nasty little robots are getting away with stealing bits of our big marketing budgets. Andrew Goode, COO of security firm Project Sunblock, says there is no visibility or transparency around where digital ads end up. The ad exchanges, which deal with the buying and selling of impressions,  have no ability to identify fraudulent publishers, those that make illegitimate websites look like real ones, and robots go undetected. Curt Hecht, global chief revenue officer at the Weather Company, says digital-ad buyers could make a difference by asking their suppliers the right questions. For example, about how the ads are procured, where they are placed, where they will run, who the partners are and what they do. 

There's lots of discussion on the wires about this and the way forward, but to stay with Bertozzi, and bring in Marco Ricci, CEO of Adloox, an ad-verification company, there needs to be a renewed emphasis on value and adequate measurement as well as higher pressure from advertisers to use premium quality inventory. "Don't accept a £4 CPM from a video ad network and then say it's quality - it's not."

Newsline reports that in the US, the Internet Advertising Bureau, 4A's and ANA have "announced plans to create a first-of-its-kind cross-industry accountability program designed to fight ad fraud, malware and the piracy of intellectual property, in an effort to increase marketplace transparency in the US." Paul Longhurst, founder of Longhurst Communications, an advertising consultancy, says the "industry has not helped itself by being so slow to tackle the problem." That the Internet Advertising Bureau has developed a code of practice with guidelines, principles and policies that are gradually coming into place is good, but, he says "It's just not fast enough."

So, in this spend category, procurement officers must always keep in mind that at the heart of open and honest procurement practice, and to get the right results from marketing spend, lies good old-fashioned supplier relationship management -- with humans. 


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