Hot topics @ ad:tech – (Un)truth in advertising

By Kathy Tong
Wednesday, May 27, 2015 / 2 min read

As ad:tech San Francisco drew to a close last week, one of the last keynote addresses actually attracted one of the largest crowds: The panel focusing on ad fraud. This topic was top-of-mind throughout the conference, and the speakers at the address provided compelling insights into mitigating the risk of non-human traffic, fraud, and viewability.

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Today, both advertisers and their partners are forced to acknowledge that fraud is a topic of continued concern. As mobile advertising traffic increases in volume – soon expected to exceed display – ad fraud has become a costly problem that advertisers have to tackle. Despite enormous growth potential in the mobile market, there are serious challenges of trust within the digital supply chain. To combat this mistrust, the Interactive Advertising Bureau (IAB) organized a task force comprised of 36 national industry players committed to identifying where the highest inventory of non-human traffic is coming from.

The scope of this problem is great; according to recent research, a concerning 50% of 3rd party ad views were attributed to non-human traffic, while 23% of video ads were associated with fraudulent bot traffic. Faced with this stark reality, marketers are poised to lose $6.3B to non-human traffic by the end of 2015.

That said, another key problem that plagues the mobile advertising industry is transparency. The movement of ad dollars from traditional formats towards mobile programmatic has invited fraud into the ecosystem. With fewer verifications and checkpoints in place, there is less insurance of where mobile traffic is coming from. The panelists agreed that advertisers are wary to scale their budgets in the digital space because of the pervasiveness of ad fraud, especially because the highest CPM inventory has the greatest propensity for fraudulent behavior.

According to panelist Suzanne Sypulski, Director of Ad Ops at The Wall St. Journal, clients need to be educated on the risks and cost of ad fraud and align themselves with partners who take have safeguards built into their ad tech. There was an overwhelming consensus that the best way to combat fraud was for brands to demand greater transparency and take ownership of their data and technology by establishing backend checks. Simultaneously, ad networks, publishers, supply side platforms, and agencies need to buy traffic from trusted monitored marketplaces (which have an average of only 4% fraud, as opposed to 16-20% fraud in open exchanges) and have technologists on staff to assess traffic quality.

Key themes of vigilance and education on best practices resonated throughout the panel’s discussion of prospective solutions for mobile and programmatic ad fraud. In addition, it was noted that using specific CPA or CPE metrics (or even the speculated concept of CPH, cost-per-human) which directly target business initiatives, increases operational efficiency by ensuring that partners are driving traffic based on quality, rather than solely seeking to maximize fill. Lastly, the panel agreed that bringing together key constituents in all parts of the advertising funnel opens the dialogue and facilitates the creation of industry benchmarks to help recognize signs of fraud (e.g. high volume click habits between midnight-7am are usually fraudulent). This system of checks and balances allows all parties to navigate the layers between the buyer and publisher and be proactive about detection.

Looking to the future, Michael Kelly, Sr. Media & Consumer Comm. Mgr at American Licorice Company, reminded everyone, “spoofing location data is the newest thing in mobile ad fraud. As mobile video takes hold, it will be where the black hats focus next.”  As a whole, the panel was able to offer high-level advice on how advertisers, vendors, and everyone in between should be cognizant to prevent the infiltration of fraudulent activity.