The Evolution of Programmatic Buying: Top Obstacles in Programmatic Advertising

In today’s day and age, it seems that programmatic advertising is everything. Despite being a relatively new tool for digital advertisers, it has increased in popularity rapidly due to the improved results advertisers can get from hyper targeting and modifying bids in real time without the need for manual involvement.

Despite the dependency on programmatic advertising, there is still a great deal of challenges that digital advertisers find themselves dealing with.

The Danger of Bots

One of the most notable obstacles that programmatic advertisers have to deal with is the presence of bots on the internet. It is believed that almost 50% of the web is comprised of bots, and an overwhelming majority of them are considered ‘bad bots’ that skew advertising results, impersonate humans and increase the prevalence of spam.

Viewability Fraud

One of the most common obstacles bots cause is in the viewability results displayed to digital advertisers. Ad Fraud, especially due to viewability issues, is such a concern that companies such as Google and AppNexus have premium services guaranteeing “fraud free” ads for advertisers. Despite this solution, the problem is still a difficult one for digital advertisers, especially those seeking non-traditional advertising ad networks to use for their campaigns.

Time to create creatives

An interesting obstacle that digital advertisers have had to deal with is the inability to make enough creative to test as quickly as programmatic tools can accept them. To combat this, many programmatic creative tools have been created, yet their use is one advertisers are slow to integrate into their workflow.

Ultimately, the biggest concern digital advertisers have to deal with is the lack of understanding of programmatic and the newness of the technology.

 

 

The Evolution of Programmatic buying: Understanding the Difference Between 1st, 2nd and 3rd Party Data

As a digital advertiser looking to improve campaigns and maximize effectiveness of ad networks, you probably spend a great deal of time utilizing DSP solutions to help you simplify the ad buying process.

Your DSP interacts with a DMP, which is just another acronym for a technological platform that aggregates all the data and tells your DSP which media buy is the best option.  What you may not know is what the difference between the 1st, 2nd and 3rd party data that your DMP presents, and how that impacts the effectiveness of your campaign.

Luckily we’re here for you!

The best way to think about the different data the DMP aggregates is by thinking of the game telephone (where one person says something and it is whispered throughout the ‘phone lines’ to see what you get at the end). The more you go down the line, the less reliable the information is.

First Party Data: This is the first person hearing the sentence on broken telephone. First party data is based on information taken directly from your site visitors and customers, conveyed through pixels, cookies etc. It is the most accurate and most powerful way to understand your client’s behavior.

Second Party Data:  This is the second person in line on the game of broken telephone; the information might be relevant, but it might be wrong.. Why? Because second party data is derived from the first party data of a similar company and the belief that their data is relevant to yours.

Third Party Data: This is everyone else in the game of broken telephone; they may know what’s going on, but chances are they are so far out there it will be ineffective to rely on it. Third party data is everything that isn’t first or second party data and, as one may assume, it is an overwhelming amount of information that may or may not be relevant for your brand.

What is the best data? Of course first party data is most accurate, but there are ways to utilize programmatic tools in order to cross reference 1st and 3rd party data and target your campaigns more effectively.

Want to read more about programmatic buying and understand the best way to maximize your digital advertising campaigns? Click here to read our eBook!

The Evolution of Programmatic Buying: RTB vs Programmatic Direct

Technology and marketing terms can get a little confusing sometimes. With all of the programs and tools out there, it’s easy to lose track of what to use when! In order to have successful marketing and digital advertising, however, we need to understand the lingo. So let’s break it down…

What is Programmatic Buying?

Programmatic buying sounds way more complicated than it actually is, so to break it all the way down, lets define it in the simplest terms: programmatic buying is the buying and selling of display advertisements using automated technology. Simple! Think of it as one computer talking to another computer, without the mess of human error in the way (goodbye lost emails and long response times). By making the digital advertising process more automated, the entire process becomes more efficient and easier to use.

You Mean There’s More Than One Type of Programmatic Buying?

Yes! There’s RTB and Programmatic Direct. These terms are often used interchangeably because people don’t fully recognize the different between them, but this oversimplification can actually harm the marketing and advertising industry! Don’t worry, it’s not only novices that make this problem – it is actually a problem on a large scale! And it only takes a little bit of attention to the differences between the two to get it right!

What is RTB?

RTB means real-time bidding – but don’t worry, you’re not headed to an auction house here! In simple terms, RTB is a technology mechanism which aids in automatic buying and selling of online advertisement impressions. The buying and selling works kind of like an auction house, only the real-time auction all happens during the time it takes for your webpage to finish loading!

How does RTB work? Let’s say you are on Facebook and on the side of your page, there is an ad impression. In the time it takes to load the page, information about the site you are on and you as a user is passed to an ad exchange. In this ad exchange, the information is then auctioned off to whichever advertiser is willing to pay the most for it, and the winner’s ad gets the impression spot! This whole process, because it is automated, takes a millisecond!

There are a lot of positive benefits to using RTB, but the most obvious is the effectiveness of the process. Instead of using websites as proxy, advertisers are able to target their audiences with RTB based on their hit and click history. The process therefore cuts down the number of impressions they put out using exchanges and other advertising technologies.

The confusing part about RTB is that it is inherently programmatic. Yes, RTB is a type of programmatic advertising, but not all programmatic advertising uses RTB. Programmatic is more of a characteristic of RTB than the definition of it. When you use the term RTB, you are referring directly to the RTB technology which holds open auction markets and private marketplaces.

What is the Downside to RTB?

RTB was revolutionary for the world of ad buying, but it came with a small price. The downsides mostly relate to the vagueness of the buy – there is no guarantee that you will get the ad spot of your choice and there is no information about the specific sites your ad will be displayed on (only the category of sites). Also while RTB allowed a deeper transparent look into the media buying world, it doesn’t fill publishers in on the decision making process behind advertisers buying their inventory by removing the direct relationship between advertiser and publisher. To top it all off, RTB is a little harmful for premium publishers, giving the full advantage (arguably) to publishers. So what happens now?

Programmatic Direct to the Rescue

Programmatic Direct can be called numerous things (programmatic premium, programmatic guaranteed, programmatic reserved, premium direct, automated guaranteed), but don’t be fooled into thinking these are different things. All of those terms all mean the same thing!

In a nutshell, programmatic direct is the an automated process of direct media buyers which solves the problem RTB creates by removing the direct relationship between advertisers and publishers by allowing advertisers to buy directly from the publisher, but without filling out the tedious insertion orders. In this way, publishers and advertisers get the transparency they need to make the most out of their campaigns. For example, in this way, when advertisers buy inventory from a publisher, they are guaranteed the spot they purchase!

By offering a system that includes a guarantee instead of an auction, programmatic buying was able to surpass RTB by supporting more targeted marketing to audiences.

So Which One Should We Use?

When it comes down to it, both types of programmatic buying are still in use by advertisers and publishers all over the world. The choice comes down to preference! Consider the positives and the negatives and optimize your campaign with whichever fits your needs!

 

Want to know more about programmatic buying – check out  our Ultimate Guide to The Evolution of Programmatic Buying 

Understanding Programmatic Advertising

Technology is growing in a revolutionary rate. Advertising, in an effort to stay with the times, is similarly growing and transforming to fit the needs of our increasingly mobile and tech-based consumerist culture. In order to increase efficiency, one of the most revolutionary trends in advertising is automated, or programmatic, buying.

In a nutshell, programmatic advertising involves a software which optimizes ad bidding and hyper-targets consumer audiences so that your advertising reaches consumers most likely to respond to your brand. Programmatic advertising matters due to the efficiency of the approach; Advertisers no longer need human ad buyers and salespeople to contract an advertising deal. Instead, they can produce an advertising outreach in a fraction of the time with higher reliability due to algorithmic processing by programmatic buying software. This therefore allows for more sophisticated, customized campaigns marketed directly to a target audience, thus positively affecting ROI results as well.

The current conversations around programmatic advertising discuss the approach as the “future of ad buying.” Is it true? We believe so, yes. While it is impossible to tell the future, programmatic advertising has reaped such tangible results that more and more users look towards programmatic buying for their brand. Some brands have even built in-house teams to optimize their own use of programmatic advertising buys for their company as part of their marketing budgets. With social networks gaining presence in the lives of brand consumers, companies are turning to platforms such as Facebook, Twitter, Instagram and Twitter to sell ads across the web and beyond the limitations of their personal platforms, with programmatic decision-making software at the core of these advertising outreaches.

At the end of the day, programmatic advertising is good for viewability in that it effectively reaches target audiences through algorithmic means to bring in positive results for a brand.  While it is important to avoid fraud and URL masking, where a buyer has no idea where their ads will actually end up, done right programmatic advertising is one of the most revolutionary approaches for marketing and advertising in today’s world. Programmatic advertising is on the rise, and we certainly don’t expect it to slow down.

Programmatic Advertising and your Marketing Budget

Programmatic advertising is the fastest growing industry in marketing these days, with over two thirds of all display advertising spending being allocated to programmatic advertising technology.  This increased reliance on programmatic advertising is on an upwards climb (in fact, the 2016 spending estimate of $22.10 billion is a 39.7% increase from 2015!) and it doesn’t look like that is going to change anytime soon – so what does this mean for advertisers and marketers looking to plan ahead for 2017?

For starters, it means that companies that do not use programmatic advertising in order to optimize campaigns, improve ROI and hyper target potential customers will have to start using programmatic tools if they want to stay relevant in 2017.  With the world shifting towards programmatic advertising, companies that do not automate media buying will risk being left behind and having ineffective campaigns.

A rise in the use of programmatic advertising also means that even smaller companies without big advertising teams can now compete with the big brands thanks to automated tools – so the competition is going to get harder!

That means that in addition to spending more money on the programmatic ad buys, companies will have to ensure their campaigns are that much more appealing in order to stand out and gain traction. To do that, companies will have to invest even more in copy writing, graphic design and development of high quality converting campaigns.

The main advantage of programmatic advertising is the clear shift in the direction of ROI-focused advertising. If up until now advertising campaigns were focused on awareness, the ability to optimize campaigns and reach a more relevant audience thanks to programmatic tools means that companies will be shifting their focus back to what matters – results and ROI.  Since programmatic advertising includes the ability to monitor ROI accurately, it has altered the way budgets are managed in order to put the focus back on gaining a return on investments.

As programmatic advertising tools improve and technology advances, programmatic advertising will continue to rise in popularity and as a result, bite a bigger chunk of digital advertising budgets in years to come – the good news is that programmatic tools tend to deliver better ‘bang for their buck’ making it money well spent!

Top trends in Mobile Web Advertising

While most people think that the increased dependency on mobile phones (and the fact that more people stare at their phone when walking than at their surroundings) is a bad thing, marketers are looking towards 2016 as a breakthrough year in terms of marketing and targeting capabilities.

As more and more people rely on their smartphones, they release more information about themselves into the virtual world. From authorizing apps that enable access to social habits, enabling cookies to improve retargeting to targeting consumers based on search results, marketers can now pinpoint their exact target audience and build a comprehensive persona. Thanks to mobile phone popularity, marketers not only have this information, but can act on it wherever the consumer is.

Shifting from Big Data to Precise Data

 One of the most notable shifts marketers experienced since the rise of smartphones is the shift away from big data. Since consumers are constantly connected to their phone optimize inter-device connectivity, marketers no longer have to worry about big data and can focus on precise data instead.

What this means is that advertisements are increasingly specific in order to connect consumers to brands quicker and enhance their overall experience, thus speeding up the process to brand loyalty.

Video killed the display star

As video advertisements gain popularity, specifically on mobile devices, so does the video advertising genre. With the introduction of video ads, mobile marketers have a whole new channel to utilize in order to drive consumers to action.

Whether using video to create brand awareness or to promote a particular product or feature, video advertising is one of the hottest trends of 2016 and we predict its popularity will only grow. To date, companies spend less on mobile video advertising than display ads, however that will likely change by the end of the year!

Strong Social Presence

 Since the introduction of facebook fan pages, brands have increasingly recognized the importance of having a strong social media presence. As more and more social networks continue to evolve and more people spend time on those social networks through their mobile phones, brands that want to uphold their market value and customer loyalty will need to exist on those social networks.

Leading mobile-based social networks such as SnapChat, WeChat, Pintrest etc are going to be more important to brands in the upcoming months as te app developers will launch new monetization strategies that will open up their app to brand advertisements. The addition of Instagram to the Facebook portfolio recently opened up a new advertising channel on mobile devices and we expect that to become the case on other leading apps in 2016.

Overall, 2016 looks to be an exciting year for mobile advertisers who will have to work harder than ever to stand out, and have a product or feature that is hyper targeted to their consumers exact needs in order to uphold market share and brand loyalty.

The Programmatic Revolution: How Programmatic Made the World Flat

 

When digital advertising first appeared, the media buying and selling ecosystem was very different than the one we witness today. I’m not just talking about the tedious and manual processes that had to take place in order for inventory to be bought and sold; I’m not dismissing these issues at all as these were catalysts for the change that occurred. Rather, I’m approaching the environment through a more…let’s say socio-economic perspective.

Let me start off with an historical analogy.

The year is 1789. We’re in France. The economy is a mess and King Louis XVI keeps making all the wrong moves.

oh louis

There is a huge disparity between the nobility class and everyone else; and everyone else is not happy about the privileges that they are not entitled to. So a revolution to overthrow the monarchy is in order. And it works! And a long history where only the nobles had a voice and everyone else didn’t collapsed. And things became much more equal.

There’s a point to that story.

You see, when we talk about the traditional days of digital advertising, we’re looking at a world which was very similar to that of France before 1789. A place where the selected few publishers were the ones with all the power and the rest…forgotten about. And these selected publishers, known as premium publishers, were all advertisers cared about.

And at that time, this frame of mind made sense. The customer wasn’t king yet and consumer behavior and retargeting wasn’t in the picture. So of course advertisers would always prefer to buy on premium sites. And because of this, the majority of all ad spend was going to the premium publishers. No one had any interest in working with the middle or long-tailed sites. But this all changed with programmatic.

Viva la revolución

To be honest, I don’t know which prompted what first. Was it the introduction of programmatic that gave brands the ability to access their audience virtually anywhere? Or had the power already shifted from brands to consumers, so the media buying and selling industry had to adjust quickly to keep up with the changes?

Regardless, it is indisputable that programmatic and the power of the consumer went hand in hand.

sweetart

And as this power shift from brands to consumers occurred, brands began to also shift their perspective from a publisher dominating world to a consumer one. Because at the end of the day, brands realized that it really didn’t matter how good their placement was on the most premium site if the right people weren’t seeing it. All they cared about was reaching the right person at the right place at the right time… and publishers couldn’t provide this.

The outcomes

Because advertisers cared more about where their users were actually surfing the web than the status of a publisher, middle and long-tailed publishers began to rise in importance; of course, with the help of programmatic.

Through retargeting and automated targeting methods, advertisers could now target their users on any site, no matter where it stood on the totem pole. Suddenly, publishers that were being ignored would be flooded with bid requests due to the consumer’s presence on their site. And the number of publishers that advertisers were working with grew tremendously.

For the first time in digital advertising, the disparities between the big and medium-small publishers are decreasing. This is absolutely phenomenal and could only bring benefits to the ecosystem.

 

 

Transparency in Programmatic – Do we need it?

Programmatic buying: you’ve heard the term, you know its trendy, but you don’t know what it is, and you certainly don’t know why it needs to be (even though you know transparency is always important).

We’re here to help you understand programmatic buying and the importance of transparency when automating media buys.

Programmatic buying is simply the shift companies are taking from manually managing media buys to automating the whole process.

As automation tools are integrated into media buys, companies are able to optimize campaigns immediately and without human involvement, based solely on aggregated data that is analyzed and optimized based on the real time results. Programmatic buying is heavily based on tracking cookies, making the mobile world slightly unfazed by this trend due to tracking limitations on mobile

If you’re thinking about the Faceook Ads API or the Google Display Network, you’re on the right track. These tools, and many others, let companies enjoy automated optimization with the belief that the multi-sourced data signaling by the programmatic buying tool will save the company money in the long run.

According to eMarketer, programmatic buying accounts for $14.88 billion of the total money spend on digital advertising (approximately $58.6 billion) and based on the fact that an increase of almost 50% was seen from 2014 to 2015, experts anticipate the reliance on programmatic advertising to increase in 2016.

So why is transparency important?

While programmatic buying enables advertisers to hypertarget their audience based on additional information collected about them, the dependency on automated processes has led many to have a false sense of trust. Advertisers as a result are often forced to pay higher CPM rates due to the inflated inventory value by the publisher and the unknown fees tacked on.

This means an advertiser could purchase ad space with a quoted value of $8 CPM without knowledge of how this valuation was achieved or, what the publisher’s value of the CPM is or, even worse, without knowing what intermediary commissions and fees the publishers bundled into the CPM price

Creating a more transparent bidding process for programmatic buying involves true transparency on where the advertisements will be placed (direct URL’s), who the intended audience is, how valuation is achieved and what commission is added on to the overall media buying fee.

How to gain this transparency    

Using digital ad intelligence solutions such as AdClarity will help you gain the transparency you need to optimize your digital advertising strategies. For example, AdClarity can give you an overview of the digital advertising trends within any industry you are interested in. Additionally, it can provide you with the most granular details for each individual campaign, including its deployment chain of ad platforms, creatives, total impressions, total ad spend, and more.

About AdClarity

AdClarity is an Ad 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.

Get a LIVE DEMO of AdClarity.

The Evolution of Programmatic Buying: Marketing Intelligence

I could not conclude this series without essential tips and tricks as to how you can enhance your media buying strategies in regards to programmatic buying. And the key to programmatic buying lies in Marketing Intelligence.

What is Marketing Intelligence?

Marketing Intelligence is the process of gathering all the world’s online media data and presenting it in a useful and accessible way to allow for better decision making.

Marketing Intelligence for Media Buyers

I am about to show you exactly how you can use Marketing Intelligence to overcome your programmatic buying challenges as an Advertiser or Agency.

In the next few examples, I will be presenting several different brands from different industries in order to demonstrate the broad range of advertising information that you can extract from AdClarity, the essential tool for digital advertisers and media buyers.

Challenge 1: Discover the Most Successful Publisher Sites to Advertise With

In this scenario, let us assume that we are  a mid-size advertiser in the travel industry. If I want to make sure I am targeting the right publishers, I can do so by monitoring my competitors and top influencers in the industry to find out what works best for them.

As an advertiser within the travel industry, I will use AdClarity to look up TripAdvisor, my industry leader and uncover their online marketing strategies and advertising tactics to create my own successful banner ad campaigns.

programmatic93

In addition to seeing which publisher sites TripAdvisor is advertising with, I can filter the sites according to “highest share of voice” to see which publishers they are working the most with and therefore spending most of their display ad budget with. I can also assume that the most invested sites are deemed to bring in the best results because TripAdvisor is not likely to be wasting such a huge amount of their budget on sites that they know are not working for them.

The search results here bring up a long list of successful publisher sites who are pursuing the same target audience as I am. Therefore I can guarantee that there are several sites on this list which I haven’t even thought about advertising with, and now I can expand my reach to find new target audiences.

Challenge 2: Optimize Your Banner Creatives and Campaign Messaging

None of the above matters if you’re not able to speak to your audience. And the way you speak to your audience is through designing a creative that communicates, resonates, and interacts well with your target audience. But which creative is guaranteed to work?

In order to get an idea of what kind of creative design and messaging you should be using, take a look at what is working (and what is not working) for your competitors and industry leaders.

This time I am in the financial industry and I need to figure out what kind of call-to-action, banner ads and landing page design my creative needs to have in order to generate the highest conversion rates.

All I need to do is uncover American Express’ online advertising tactics to see which creatives are most successful for them and build off of their campaigns to create my own ultimate campaigns.

programmatic94

Challenge 3: Finding the Most Relevant Ad Exchanges, Ad Networks, Ad Servers, DSPs, and SSPs that will lead you back to your favorite publishers and other similar publishers who target your ideal audience.

In this scenario, let us assume that we are a brand in the automotive industry who wants to advertise on turbododge.com, an online publisher site that deals with the automotive industry.

By using AdClarity to discover which mediators (ad exchanges, ad servers, ad networks, SSPs, and DSPs) turbododge.com is working with, I am able to know who I need to out to in order to advertise with them.

programmatic91

 

Additionally, I can assume that publishers in the same industry as turbododge.com are most likely using the same SSPs. I should therefore make sure that the ad exchange I am working with works with that specific SSP or that I’m using the SSPs that are most relevant for me.

I can also use AdClarity to figure out which DSP I should be working with. By using Marketing Intelligence to uncover which SSPs and ad exchanges a DSP is working with, I can see which DSPs have access to premium inventory and if other advertisers they are working with are in the same industry as me.

programmatic92

 

If I want to dig a little deeper into that last step, I can use AdClarity API to evaluate the ad spend of my competitors and what they’re bidding for inventory on a publisher site I’m interested in. In order to get the ad spend, I calculate all the publishers they are working with, how many impressions they bought from each publisher, and what the CPM is of each of these publishers.

Marketing Intelligence for Media Sellers

In the next few examples, I will be using several different companies from different industries in order to show you the broad range of information that AdClarity has access to.

Challenge 1: Finding the relevant ad networks, DSPs, and SSPs that will lead you back to your favorite advertisers and other relevant advertisers in order to maximize your advertising revenue and access thousands of advertisers that wouldn’t have bought directly from you.

In this scenario, we are a publisher who wants to work with Travelzoo.

By using AdClarity to discover which mediators (ad exchanges, ad servers, ad networks, SSPs, and DSPs) Travelzoo is working with, I am able to know which mediator I need to be in contact with in order to work with them.

programmatic95

Additionally, I can assume that advertisers in the same industry as Travelzoo are most likely using the same DSPs. I should therefore make sure that the ad exchange I am working with works with that specific DSP or that I’m working with the DSPs that are most relevant for me. This will help me find advertisers that will yield results from my site and will continue running their ads with me.

programmatic96

I can also use AdClarity to figure out which SSP and ad exchange I should be working with. By using Marketing Intelligence to uncover which DSPs and ad exchanges an SSP is working with, I can see which SSPs have access to premium advertisers and if other publishers they are working with are in the same industry as me. By making sure I have access to top of the line advertisers, I can maximize my revenue by knowing that premium advertisers are trying to outbid each other for my premium inventory.

Additionally, AdClarity shows me the eCPM of my competitors so that I can see what my inventory is really worth and whether my price floor is too high or too low.  If it’s too high, I’ll know to lower it so that I won’t be missing out on advertisers. And if it’s too low, then I can raise it and maximize revenue.

programmatic97

In conclusion, Marketing Intelligence lets you gain complete visibility and transparency onto your competitors advertising tactics and monitor your entire ecosystem to build on their success and avoid their failures.

Your competitors have spent an exorbitant amount of their budget on testing and trying to figure out what brings them the best results and these insights will allow you to easily work off their successes.

 

About AdClarity

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.

 

Request a guided tour of AdClarity.

The Evolution of Programmatic Buying: The Challenges

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.[1]

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.[2] 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.[3]

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[4]:

iabclick

Source: iab

Ad Injections    

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.

ad injections

Source: www.benedelman.org

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.

Another example

So let’s say you’re searching for boots on Google.

boots1

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.

booots2

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.

adblock

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.

Ad Viewability

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.[5] 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.

Ad_Viewability

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.

 

About AdClarity

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.

 

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[1] http://www.adweek.com/news/technology/7-things-you-need-know-about-bots-are-threatening-ad-industry-161849

[2] https://econsultancy.com/blog/63818-what-is-click-fraud-and-how-can-you-prevent-it/

[3] https://www.exchangewire.com/blog/2014/05/29/the-truth-about-online-ad-fraud/

[4] http://www.iab.net/media/file/IABDigitalSimplifiedUnderstandingOnlineTrafficFraud.pdf

[5] http://www.iab.net/iablog/2014/03/viewability-has-arrived-what-you-need-to-know-to-see-through-this-sea-change.html