All the industry trades are up in arms of late about the amount of fraud being exposed in online advertising, especially in RTB/auction style platforms; many act like they simply cannot believe what they are seeing (hearing, reading), as if the online world was not home to the largest, most advanced set of fraudulent manipulators ever to walk this earth.
AdWeek is running a second article, hot on the heels of last month’s ‘breaking news‘ regarding the situation. Other media outlets, such as Business Insider and Venture Beat have weighed in on the topic as well, estimating that as much as 400 million dollars each year is wasted in ad exchanges due to bots, overlap and other not so pretty tricks employed by the fraudsters.
As long as the internet has been turned on for public consumption, the web has been full of tricksters, cheats and fraudulent activity. Interestingly enough, the adult segment of the internet figured out very quickly that it wasn’t paranoid to believe that everyone was out to steal from everyone else; they also created systems that were designed to catch cheating on many levels and to flag suspect behaviour for review very quickly. On the flip side of that coin – publishers (formerly known as affiliates) also devised ways and means to keep track of advertisers (sponsors back then) and the way their clicks and conversions and ratios were presented; most disregarded the bulk of sponsor stats that weren’t written on their monthly affilate income checks.
Technology is great; we wouldn’t have many of the creature comforts and a lot of the necessities would be so much more costly in the absence of automation and efficiencies of scale. However, depending on technology for everything is also a great way to wind up in a hole without a ladder.
Of course there are fraudulent networks, bots, and the like. As long as advertisers are willing to bid on clicks and impressions and other non performance metrics, and willing to spend money to finance these types of exchanges, the fraud will continue to run rampant in the industry and publishers and advertisers alike will suffer, since the siphoning off of so much spending each month is an unsustainable situation. Not because it’s sucking so much money out of the system (the real math is well under 1% of spending) but because it sucks the belief in the systems out of the people charged with using the system.
No advertiser wants to be told their campaign didn’t convert well because it sucked; but they also don’t want to hear that it didn’t convert because they were a target of deliberate click fraud.
Calling for third party certification of both publishers and advertisers might work. But only if the marketplace believes in the integrity of those doing the certification. If you take the adult example again, it was nearly ten years before anyone could agree on a standard to self certify in order to keep minors from accessing mature content. No one trusted any third party to come in and scrutinize practices and platforms; most wouldn’t have passed muster from a real third party certification anyway.
But… in the adult world during the late 90’s and early 2000’s, so much money flowed like water through the system that leaky faucets and broken handles were simply accepted as a fact of life. Shrinkage was calculated into the revenue projections and everyone went about their business, counting their money and cashing their checks.
Right now, online advertising has that same air about it — go to a trade show and talk to exchange operators, traffic brokers and the like, and it’s another Wild West. Trends, methods, technology change so fast that it’s hard to tell what’s working today or what will work tomorrow. The only real hope for online advertising is that old line standards will somehow be brought to bear on the brave new world, and the metrics for measurement are standardized into something we can all understand.