How the fragmented ad ecosystem is enabling fraud

The Wild West has a reputation for being vicious, cutthroat and every man for himself. But it wasn’t entirely lawless. In fact, some towns like Tombstone actually have less restrictive gun laws today than back in the 19th century. 

So in that sense, when we describe the digital ad ecosystem as being like the Wild West, we’re actually underselling how fragmented, chaotic and lawless digital ad selling is. A study by fraud detection firm Adloox on behalf of a WPP agency found that in 2017 fraudulent selling might cost advertisers $16.4 billion in 2017 – double what it cost them in 2016. 

The Drum’s Rebecca Stewart writes:

“The World Federation of Advertisers (WFA), meanwhile, said ad fraud is “second only to the drugs trade” as a source of income for organised crime predicting it would cost brands more than $50bn by 2025.”

At the Guardian’s Changing Media Summit in London yesterday, a panel of industry experts discussed the reasons why 50 percent of digital display campaigns are never seen by human eyes – and what can be done to ameliorate that issue.

Brand unsafety

Moderator Lara O’Reilly began by saying:

“It’s been within the news, the trade press for the last few years… Especially in the last couple of weeks or so we’ve seen it become a mainstream issue, not least because of the Times story.”

The panellists agreed that the Times story, which reported on the tendency for ads to appear on unsafe sites opposite porn or extremist content, is useful for bringing concerns about digital advertising to a much wider audience (although panelist Mark Finney, director of media at ISBA, described the story itself as ‘shoddy’). Christian Armond, general manager for digital marketing for TUI, said:

“These articles tend to come up every couple of years. Importantly for us as an advertiser, it will raise the awareness of it to the board. It’s one that does get raised up outside of the digital marketing team.”

The panel repeatedly mentioned that such stories tend to come around every few years – but it was clear that while that might be the case, very little is ultimately done about it and the problem continues to snowball.

As is typical for discussions around digital advertising, the panel quickly decided that Facebook and Google would be the antagonists for the issues surrounding brand safety. Johnny Hornby, founder and CEO of The & Partnership (responsible for the study reported by The Drum), argued that the scale of the issue isn’t being overstated:

“You can find big name brands on Jihadi sites, on porn sites, it isn’t anyone making stuff up.

“We need to turn our big guns on Google and Facebook. They’re letting it be there, then they’re enabling it for advertising. In terms of what’s the big things that needs to be done… I think we need to give Google and Facebook [an ultimatum]: ‘if you won’t do something about it, we’re going to do something about it’.”

He suggested that advertisers, media owners and agencies threaten to pull advertising from those services. O’Reilly questioned how realistic that strategy was, given how integral the duopoly is to the overall ad environment, and indeed at the start of the session Armond had noted that even the advertisers who’d pulled spend in the wake of the Times story had quietly begun again within the next few days. 

Realistically, publishers and advertisers don’t have the sway individually to influence Google or Facebook – and despite the panels calls for a universal approach to tackling the brand safety issue, I can’t see enough players taking the hit required to make anything happen to make a campaign anywhere near totally inclusive. Instead of that holistic approach, Finney suggested a smaller-scale but more practical solution:

“Going back to brand safety, weve been putting a lot of pressure on Google. We’re in the process of doing that. Google [should allow access to third-party verification tools], they are actually better than the Google content verification tools.”

But even then, as O’Reilly pointed out, the duopoly has been fiercely resistant to the idea on the grounds that third parties increase the risk of data leakage and ultimately harm to their users.

Criminal minds

But while Google and Facebook – and ultimately the entire ecosystem – might be complicit in the brand safety issue, it’s very easy to forget that ad fraud is a separate and ultimately more costly problem.

Finney explained that while the issues on the publisher and advertiser side are driven by commercial considerations, for the people who go and create the environment in which ad fraud can take place it’s a downright criminal enterprise:

“We talk about fraud as being an advertising problen… let’s not forget this is criminal activity. There are people involved in tracking down ad fraud… there was a chap in Nepal in hiding for fear of his life. It’s staggering, what they did, the scale of it.

“Hundreds of thousands of fake IP adresses, hacking ISPs. The authorities need to step up as well. We’ve got Dixon of Dock Green, we need Jack Bauer.”

But those criminals are enabled by the lax standards and lack of universal agreement on what, for instance, constitutes a ‘view’ for a digital ad. Armond said:

“As marketeers we need to take control of the measurement so we have independent control so we can see that. Agencies have got to take more repsonsibility. I sometimes worry we settle for mediocrity.

“We can only hit a terrible metric half the time.”

O’Reilly asked for some actionable advice that advertisers and publishers can put into practice to help limit the dangers of ad fraud and unsafe environments. While the panelists all gave good advice – not to give Facebook and Google too much power to police what is and isn’t unsafe, to create a unified whitelist for safe sites, to spend the little bit of money on pre-bid verification software – a lot of it still built upon the idea that the entire ecosystem can come together, in universal agreement on all the issues, in the near future.

It doesn’t seem likely, given the immediate financial disincentives for those who adopt those measures, that advertisers and agencies will be clamouring to sign up. And as the panelists pointed out repeatedly, publishers grappling with falling circulations and scrutiny of their digital revenue potential are similarly unlikely to reach a universal agreement on something that might cost them money. Finney said:

“Unless you’ve got an endless budget you’re gonna make choices. If you go with only whitelisted sites you’re going to limit the number of places you can be… which will limit your sales.”

So while the legitimate side of the digital ad economy is paralysed by inertia and penned in by Google and Facebook, the criminals have an incredible financial incentive to continue developing more and more sophisticated methods of defrauding advertisers. The Wild West might have a reputation for viciousness, blatant theft and lawlessness – it has nothing on the digital ad economy.

By |2017-03-16T00:01:00+00:00March 16th, 2017|Analysis|Comments Off on How the fragmented ad ecosystem is enabling fraud

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