Identity theft and credit card fraud make the headlines for their damage and deception, but there’s another putrid kind of fraud that, according to Hewlett Packard Enterprise’s “The Business of Hacking,” requires less risk and effort and has a higher payout potential: ad fraud. The chicanery is rampant throughout the digital advertising ecosystem and has many different varieties. And while it’s true that many players in the supply chain have incentives to ignore the problem, there’s a growing momentum to stop ad fraud’s costly creep.
Technology is an important weapon in the fight, but experts say combating ad fraud will also require buyers, sellers, and the companies in between to have smart business practices. For online publishers, those practices largely pertain to two issues: traffic bought through third parties and transparency for ad buys.
The Threats of Third-Party Traffic
Sourcing traffic is common in digital advertising, but it doesn’t necessarily have the attention of many marketers, according to the white paper “Sourced Traffic: Buyer Beware!” from the ANA (Association of National Advertisers). It found that 61% of marketers were either slightly familiar or not at all familiar with sourced traffic, and only 19% were either very familiar or extremely familiar.
The paper explains the visitor acquisition arrangement this way: “With sourced traffic, a publisher pays a third-party vendor to send users to its site by advertising on other publishers’ sites.” Problems arise when users aren’t actual people, but rather bots that can mimic human behavior. Advertisers end up paying for ad impressions served to those bots.
“When we talk about ad fraud, we’re talking about fake web views that increase the number of ads served, making it look like there are more people browsing the net than there really are, which artificially inflates the supply in this market,” says Michael Tiffany, CEO and co-founder of the security company White Ops.
To be sure, publishers often have no hand in the bots that visit their sites. The software may stop by to collect cookies and cause the ad impressions to load somewhere else—often on fake sites awash with bot traffic that compete for ad dollars with legitimate sites. But publishers increase the chances that bots show up on their properties when they buy traffic. The “2015 Bot Baseline” report from White Ops and the ANA found that sourced traffic was more than three times more likely to contain bots than unsourced traffic. The practice can ultimately affect many kinds of buys, including direct, private marketplace, and open exchange programmatic.
The notion that bought traffic would have more bots than organic traffic makes perfect sense to Augustine Fou, an independent ad fraud researcher. “There aren’t a whole bunch of humans sitting around with nothing to do but to go to websites that you tell them to go to, so how are you able to generate 10 million ad impressions from a small site that has practically no content that humans want to see? When you buy it, that means they use bots to generate all that traffic for you,” Fou says.
Ad fraud researcher and consultant Shailin Dhar adds, “You know deep down when you’re buying some very cheap traffic-—there’s something not right about it.” Still, pricing alone isn’t a good gauge of traffic quality. Expensive traffic can be filled with bots too.
Hard Habit to Break
Simply not buying sourced traffic sounds as if it’s an ideal solution for content providers, but it’s complicated. Publishers often seek to acquire visitors for their sites because their own organic traffic isn’t enough to meet the audience delivery requirements of an advertiser, according to “Sourced Traffic: Buyer Beware!”
It could start with a single purchase that performs really well. “That is a slippery slope you never want to start going down,” Fou says. “Once you start buying traffic, you can’t stop. Just imagine you show your boss that you got more traffic and higher ad revenue quarter over quarter, and then all of a sudden you stop buying the traffic. It’s going to make you look really bad.”
Also, there are the complexities of competition. “Any publisher paying attention knows how pervasive traffic sourcing is, which means there’s a strong incentive for everyone to do it,” says Tiffany. “If you know all your peers are doing it and getting away with it, then they can effectively undercut you on price or sell more volume than you—and that puts people at a competitive disadvantage in this world where the playing field’s not even.”
Publishers may also find they have a bot predicament when they use a related technique called audience extension in which they fill advertiser campaigns with inventory from other sites, incuding some on open exchanges. “The problem becomes, are you actually sure the demographics and the data [are] correct and you don’t have a lot of bots pretending to be those humans?” Fou asks. “Audience extension has been a convenient euphemism of, ‘Let’s find these other audiences that go elsewhere,’ and the ‘elsewhere’ happens to be all these bad sites. When you find an extension of your audience, you’re allowing more fraud to creep in.”