Fraud: The Hidden Face of Digital Advertising
Protecting your digital media investments
by Stanislas Di Vittorio, Co-founder and CEO of ESV Digital Group
After drugs, fraud in digital advertising is one of the most lucrative illegal activities in the world.
When talking about digital fraud, the reaction is often to think about hackers and computer security issues. However, there is a lesser known digital fraud, but its financial impact is far greater: fraud in the field of digital advertising. The World Federation of Advertisers estimates that the impact could be up to 30 to 40 percent of global digital media investment in 2025, an amount that could amount to $ 150 billion.
Fraud in digital advertising is divided into five main themes:
- The false traffic. Robots accounted for 6% to 9% of impressions recorded in 2015. (2)
- The biased returns. Some publishers manipulate the format of ads to increase their returns, for example by forcing users to click on an advertisement in exchange for participating in a lottery or other material benefit.
- The visibility. More than 40% of advertisements invoiced and broadcast on the Internet are not actually seen by visitors, in particular because they are placed below the page break or because they are loaded after the user has already left the page.
- Poor targeting. Certain target settings, based on socio-demographic criteria or personal interests (age, geography, sex, occupation, hobbies …), do not correspond to the reality of the Internet users actually exposed to the advertising campaign.
- The safety of brands. More than 10% of ads are placed on sites with violent or pornographic content which any mainstream advertiser would want to avoid.
In order to assess the extent of the fraud of which the advertiser is a potential victim, the latter has two coupled approaches to evaluate the quality of its digital investments:
A purely quantitative approach to analysing and cross-analysing data available in analytics and allocation tools, ad servers, advertising auction platforms, and programmatic purchasing management tools (DSP) to detect metrics that do not match the expected values.
A more qualitative approach to analysing the implementation process of campaigns by the advertiser and its agencies (briefing, reporting, choice of KPIs, objectives, targets, etc.) in order to contextualise and understand the analysed data.
After the analysis phase, it’s time for action recommendations. As an example, here are some typical actions:
- Access and store data for ongoing storage and analysis.
- Integrate technological tools to analyse the media mix and traffic, while being vigilant on the relationship between performance and cost.
- Define processes within the advertiser (management team, marketing, digital) and the agency (brief, debrief, reporting).
For each proposed recommendation, it is important to evaluate the resources (internal or external, tools, processes, etc.) to be mobilised by analysing the relationship between full costs and impact in order to prioritise the actions to be carried out. It is important to emphasise that these actions will not eliminate fraud, which is an unattainable objective, but rather to limit fraud and limit its volume.
A biased promise
It is paradoxical to think that the share of fraud is larger in digital advertising than in traditional advertising, even though digital advertising promises total transparency of media investments: on the advertising used, on the site where it is published, on the target user (via cookies), whether he has been exposed to the advertisement in question (and in theory, on the price paid under the Sapin law), and on the conversion measure for each purchased advertisement. But in reality, it is the infinite granularity and the related complexity of the purchase of space on the Internet that opens possibilities to those who would like to defraud advertising on the Net. This granularity is the primary strength of advertising on the internet, which makes it difficult to control all the advertisements purchased and their compliance with the orders of the advertiser.
Control and measurement tools to limit fraud in digital advertising exist, but they alone will not suffice. Success depends on the cooperation of all players in the industry: advertisers, agencies, space vendors and technology solutions providers. It is important for the future of the Internet ecosystem and to preserve the confidence of the actors who trust it to take the subject of fraud in hand.