The Billions We're Losing in Online Advertising Fraud

#PMILDN - @samueljscott - samueljscott.com

The Billions We're Losing in Display

AdvertisingSamuel Scott

Director of Marcom - Logz.iohttp://www.samueljscott.com

http://logz.io


£6.5 billion! — Campaign Live

(£88 billion spent globally on digital ads)

http://www.campaignlive.co.uk/article/tackling-65bn-ad-fraud-problem/1322083


What is an Impression?

“When an ad is requested by a user’s browser”- Interactive Advertising Bureau

http://www.iab.net/media/file/GlossaryofInteractivAdvertisingTerms.pdf


Humans have nothing to do with

it!


This Number is BS


Most Impressions AreNever Seen by Humans

• “20% on a computer or smartphone screen were seen by actual people” — Bloomberg

• “54% weren’t seen by real people”— Wall Street Journal

• “85% don’t have the opportunity to be seen by a real person” — MediaPost

http://www.bloomberg.com/features/2015-click-fraud/




Ad Network Failure

15% of the time something goes wrong— Wrong ad loads

— Technical failure, nothing loads— Still an impression!

— MediaPost


Bot Traffic

60% of all Internet trafficis bots

— A bot visit still counts as a page view

— Still an impression!

— The Atlantic

http://www.theatlantic.com/technology/archive/2013/12/welcome-to-the-internet-of-thingies-615-of-web-traffic-is-not-human/282309/


Publisher Fraud

“25% of the entire entire online advertising market is fraudulent”

— Adweek

http://www.adweek.com/news/technology/amount-questionable-online-traffic-will-blow-your-mind-153083


Publisher Tricks

— Changing ad units to 1x1 pixel size— Stacking numerous ad units on top of each other

— Redirecting people to sites they don’t want to visit


Buying Bot Traffic

— Pay ad network $0.0020 for bot visit— Get $0.0025 to $0.0040 in ad revenue

— 25% to 100% profit margin for doing nothing!

— Digiday

http://digiday.com/publishers/confessions-bot-traffic-buyer/


Bottom Line

Only 8% of display ads have the chance to be seen.

— MediaPost



Kickbacks & CollusionExample:

— Media buyer spends $1 million on ad network

— Ad network sends $200,000 to a corporate sibling of the agency for a “presentation”

— Ad Age

http://adage.com/article/agency-news/media-agency-kickbacks-real/297707/


ArbitrageExample:

— Media buyer & agencies spend $1 million on ads for a client

— Bills client for $1.2 million for the ad spent

— Ad Age

http://adage.com/article/agency-news/media-agency-kickbacks-real/297707/


What’s Going OnClients give money to agencies & media buyers to buy ads

The agencies & media buyers give money to ad networks

The ad networks give some money back to the agencies & media buyers

The agencies charge clients for more than the ad cost

The clients' display ads are only 8% viewable

The 92% non-viewable impressions still earn moneyfor publishers & ad networks


The Industry’s Response

IAB goal: 70% viewability — But will countries accept billions of losses?

— $25 billion of online ad spend is under reviewin “Mediapalooza”

Google: ActiveViewFacebook is also working on viewability

http://www.adweek.com/news/advertising-branding/plotting-media-reviews-volkswagen-and-bmw-are-now-part-mediapalooza-2015-164879

http://marketingland.com/googles-report-56-percent-ads-arent-seen-isnt-shocking-heres-110433

https://www.facebook.com/business/news/viewed-impressions


The Industry’s Response


How to Protect Yourself


Fire Bad Agencies & Media Buyers

If they say: “Half of my ad spend

is wasted, and I don’t know which half”

Exterminate!


Adjust Metrics in Human Terms

Spend Impressions CPI Viewability Real CPI

$10,000 100,000 $0.10 100% $0.10

$10,000 100,000 $0.10 8% $1.25


Don’t Spend in Bad Countries

Country % of Fraudulent Traffic

China 92%

Venezuela 80%

Ukraine 77%

United States 43%

Source: AdWeek

http://www.adweek.com/news/advertising-branding/bots-infecting-nearly-half-web-traffic-report-152300


How to Protect Yourself

See the very last slide of this presentation for a list of resources to learn more!


Questions?

Samuel ScottDirector of Marcom

Logz.io

[email protected] - @samueljscott

http://www.samueljscott.comhttp://logz.io

mailto:[email protected]

https://twitter.com/samueljscott

http://www.samueljscott.com/

http://logz.io/


Resources— Moz (my article): https://moz.com/blog/online-advertising-fraud

— Bloomberg: http://www.bloomberg.com/features/2015-click-fraud/

— Marketing Land: http://marketingland.com/many-faces-programmatic-ad-fraud-142335

— Bob Hoffman’s Ad Contrarian blog: http://adcontrarian.blogspot.co.il/

— Individual slides have linked sources at the bottom

https://moz.com/blog/online-advertising-fraud


http://marketingland.com/many-faces-programmatic-ad-fraud-142335

http://marketingland.com/many-faces-programmatic-ad-fraud-142335

http://adcontrarian.blogspot.co.il/