Tapstone: Up To 50% Of Web Traffic is Fake – What Will Advertisers Do?

June 25, 2014

This week the nice folks at MediaPost’s Media Daily News published an article from Tapstone CEO, Jonathan David, sounding the alarm on fraud in the ad industry. Read it here:

It’s no secret that there is a growing issue with fraudulent traffic, bots and other sources of phony traffic online, and that the ad industry is well aware of it.

Although the viewability of digital ads is a growing sore point for the online ad industry, there have been minimal solutions or pressure to prevent this from continuing. With digital spending expecting to increase in the U.S. by 14.9% in 2014 for an estimated spend of $42.3 billion, according to eMarketer, many marketers are unsure how to remedy this problem, and as a result are turning a blind eye.

In 2011, the Interactive Advertising Bureau, the 4As (American Association of Advertising Agencies), and the Association of National Advertisers (ANA) began an effort to define an industry-wide standard for viewable impressions called the 3MS Initiative.

The initiative came from the recognition that brand marketers were suffering from a lack of measurement tools for cross-platform media-buying. While the 3MS initiative does help to move the industry toward viewability standards, hopefully reducing fraud and fake traffic, it hasn’t succeeded yet. Advertisers are still reporting millions of stolen impressions with fake traffic and fraudulent activity is on the rise.

ComScore research recently reported that 54% of display ads shown in thousands of campaigns between May 2012 and February 2013 never appeared in front of a human being.

Ad veteran Wenda Millard, president of Medialink, explained that a quarter of the online ad market is fraudulent.

Not only should we be concerned about the high level of fraud, but also the lack of transparency offered to the agencies or buyers on the receiving end of these fraudulent experiences. Agency trading desks deliver lots of inventory on networks into which buyers don’t have much insight. Buyers receive traffic reports listing buckets of inventory labeled “Microsoft advertising exchange” or something similar. Frankly, it’s surprising that the media agencies don’t require more detail into where the ads are running or who is viewing the ads.

When you combine the bots, the click fraud, viewability and the lack of transparency provided, it really undermines the value that digital media can offer. It becomes a real challenge for advertisers to differentiate between quality impressions vs. fake — and that’s a huge threat to the industry.

This issue, in varying degrees, touches everyone in the digital ad world.

if publishers and advertisers are aware of the issue, why isn’t more being done to change the industry standards and protect against that threat? Overall, in the current structure of how performance is measured for buyers, they need the fraudulent traffic.

Buyers are measured by optimization algorithms, which incentivizes them to keep buying traffic, although some of it is fake.

When publishers try to tighten up on quality traffic, they run the risk of losing potential advertisers, due to under-delivery and adversely affect their revenue. If advertisers are not critically reviewing their ad performance and the quality of Web traffic, the publishers that can keep making money will just choose to ignore any concern of fake traffic. Thus, the problem continues.

Until advertisers begin to take ownership and responsibility for this fraudulent traffic, the publishers and even buyers will not insist on the necessary changes.

The question is: how can advertisers address these issues now? Since the existing cogs of the current online ad-buying process don’t incentivize changing or even removing the fraudulent traffic, it’s up to the advertiser to protect themselves.

In my experience, conversion performance is a great measurement to vet the quality of the traffic. Sales can’t lie and can’t be generated by bots. Incentives for a call to action, such as sign up for mailing list, the filling out of a lead form or registering for notifications are all ways in which advertisers can create a layer of protection from seemingly invisible click fraud.