Everything in life has a yin and yang, and this includes programmatic. Yes, programmatic has made some revolutionary changes in the way media buying is done that benefits the entire online advertising ecosystem. But with it also comes a new type of black market where nefarious people take advantage of human error, the rise of automation, and the decline in human to human communication.
The most common type of fraud, and often synonymous with the term, is non-human traffic aka bots. We will definitely be focusing on that in this post, but I will also take note of some less popular fraud types which are also extremely detrimental to honest players and the integrity of the industry.
Non-Human Traffic & Bots (Click Fraud)
It’s easy to understand why non-human traffic (from this point on we’ll call bots) tops the list of concerns for advertisers and brands; they currently account for 90% of all fraud in the online advertising industry. Advertisers are paying and expecting that their ads will be viewed by actual people who might potentially buy their product. However, this isn’t always the case as bots account for about 11% of all display ad views.
Bots are computer software applications driven by code which impersonate human behavior. They are pretty advanced and can be very hard to detect, especially as they have become better at mimicking user behavior throughout the years.
The type of fraud that bots engage in is called click fraud, which occurs when the bot clicks on an advertisement to drive up costs for the advertiser without ever having the intention of conducting business with them. Keep in mind that bots aren’t humans- they can run forever and at an extremely high pace.
There are different types of bots such as PhantomBots, which travel around the web viewing and clicking ads, DeceptiBots, which can mimic a human’s behavior, and VaderBots.
VaderBots are the most intrusive to users because they corrupt PCs and infect them with a malware which conducts click fraud based on the user’s behavior. There is a really great infographic that the iab made which shows just how easy it is to become a victim of traffic fraud:
Ad Injections have a very interesting story.
You know when you download some file or app off the web and it makes you “run” and “install” about a million pop-ups and have you “read” their novel on terms and conditions (which we never do)?
Well, often times when you download apps off the internet, they will bundle themselves into an installer which will persuade you to install additional programs onto your computer. This is where not reading the terms and conditions or the pop-ups and just clicking “next” “next” “next” come in. So really, when you think you’re getting what you were looking for, you are… but you’re also getting much more than you expected.
I don’t know if you’ve hear of this little bastard, but I’m talking about ad injectors.
You see that ad on Dell’s site that’s outlined in red. Take a moment and think about it. Do you really think that Dell acts as a publisher? Would Nike host ads from retailers on its site? Or Apple? I think not.
This is what ad injectors do; they inject ads onto sites without permission and without the publisher ever knowing. And therefore, without ever paying the publisher.
So let’s say you’re searching for boots on Google.
Instantly, Google will come back with results. But in even less time, the ad injector will push forth its own ads and replace those that paid for Google.
Ok, so who gets paid here?
Normally, the money would go to Google, right? But Google isn’t making any money here. Why? Because the ads were never put up by Google in the first place. The ads belong to an entirely independent third party service who hijacked the Google search page and placed their own ads as a way of making money. So let’s reiterate this- the ads on Google have not actually been placed there by Google!
Why do advertisers do this?
Well, this is a very attractive scheme to advertisers because now they are being offered inventory in places they would have never been offered before! For example, not too long ago, a Target ad actually showed up on Walmart’s homepage. If that’s not a shocker, then I don’t know what is.
Why do Ad Injectors do this?
On one hand, ad injectors could sell inventory directly to the publishers. In fact. If the price is good enough, advertisers may even say yes. It would indeed be more appealing to advertisers as these ad injectors would be able to offer up space that would otherwise be impossible to attain i.e. Walmart or Wikipedia. Additionally, the spots on the page (above the fold, main banner) would definitely be an attractive aspect to advertisers.
But this isn’t what ad injectors do at all. Rather, they work through an intricate and complex web of ad networks, exchanges and other mediators. There are many benefits to these mediators, the strongest being the ability to increase efficiency. However, because these webs are so complex, the advertiser may be going through 3 or 4 mediators before getting to their publisher. The advertiser may never even suspect that they are going through an ad injector!
Impression Fraud (Ad stacking, Ad Stuffing)
Ad stacking is another very common form of fraud. It occurs when publishers stack ads on top of one another, and even though only the top ad is shown to the user, advertisers think that their ads are also getting shown. The image below shows an example of an ad blocker showing how many ads are being served on the page or being attempted to being served on the page.
They do this by placing ads in invisible iframes with zero to zero pixels and zero visibility. This way they can load lots and lots of ads on the page. Furthermore, publishers can use bots to load the pages so that the ads get “viewed”, costing advertisers for each impression “viewed.”
This enables publishers to sell a huge amount of inventory on ad exchanges, which are sold but never seen.
Fake Sites & Domains
This one is pretty basic and is exactly what it sounds like. These are fake websites built just for advertising which offer no content that anyone is interested in. They usually are integrated into a complex web of other sites and are part of a larger network so that they don’t rouse suspicion. And just like impression fraud, they can use bots to load and reload the page, making it look like they have traffic and costing the advertisers money for useless impressions.
This isn’t a type of fraud. Rather, I see it more as a challenge that is currently being acknowledged by key players in the industry.
In the past few years, statistics about display advertising have been a hot topic. Why? Because the figures are shocking. For example, did you know that you’re more likely to survive a plane crash than click on a banner ad? Or that you’re more likely to get into MIT or Harvard than click on a banner ad? Eeek! For someone who lives and breathes the digital advertising world, these are horrifying statistics. But what I think is even more daunting is that while global display ad spend is expected to reach over $70 billion in 2016, over 56% of all ads served are not actually viewable!
So what makes an ad viewable?
According to the IAB, at least 50% of an ad must appear in the user’s browser window for at least 1 second, and in the case for videos, at least 2 seconds. That means if your ad shows up on someone’s browser, but is placed below the fold, and the user hasn’t scrolled, there is no ad viewability. To put it simply, just because an ad is served doesn’t mean it’s viewed.
So what can you do?
In the following infographic, you’ll see exactly what factors affect the chance of your ad getting viewed.
Although all of these challenges did exist in the pre-programmatic era, they have been exacerbated by the current conditions of the industry, specifically the decline in human to human contact. Fraudsters can easily hide their identities and motives to remain undetected by brands and ad exchange. In order for programmatic to overcome fraud, an audit trail must be incorporated in the supply chain. There must be more transparency in the system and a way to recognize if players participating in the programmatic game should be there in the first place.
AdClarity is a Marketing Intelligence tool which provides online marketers with actionable insights about their competitors’ advertising activities. Driven by big data and proprietary behavioral content discovery technology, AdClarity unveils brands’ campaigns, ad creatives, impressions, and spend data across multiple channels, including Display, Mobile Web, Mobile Apps and Video. Data is collected across 20 geographies and covers over 50M URLs daily while discovering over 40K new campaigns every day. The AdClarity product suite is used by over 7,000 media and advertising professionals globally in Fortune 500 Brands, Agencies, Ad Networks, and Publishers.