The cost of advertising fraud is eye-watering and will be keeping many senior marketers up at night, so how can brands best navigate these constantly evolving threats?
The World Federation of Advertisers has predicted ad fraud will see advertisers wasting $50 billion a year by 2025. It’s a terrifying figure marketers will hope is an overestimate to be allayed by continuing investment in fraud prevention. But with many fraudsters viewing digital advertising as low-hanging fruit, the threat is very real.
Steve Chester, director of media at ISBA, the body representing the UK’s leading advertisers, describes the situation as an “ongoing arms race” between brand owners and fraudsters, and cautions chief marketing officers (CMOs) to stay informed of the latest developments.
Nick Morley, managing director, Europe, Middle East and Africa, at digital ad verification specialist Integral Ad Science, says: “Ad fraud has become a global multi-billion-dollar business and it will continue to be a major issue for the advertising industry. This is because it remains attractive within the realm of criminal activity, as it has high payout potential at a low risk to the fraudster.”
All a fraudster needs is a few computers and the technical know-how. This low barrier to entry makes digital ad fraud an attractive prospect over other forms of fraud that require more investment or infrastructure.
Different types of ad fraud include domain spoofing, click hijacking, app spoofing and pixel stuffing. However, botnets present the most pervasive ad fraud type. These work by hijacking devices with malware to generate fraudulent traffic.
Botnet operations have been getting more sophisticated over the years, says Stevan Randjelovic, director of brand safety and digital risk for GroupM. “The industry has seen an uptick in botnet schemes, but in a slightly more refined way. Instead of generating traffic directly on a hijacked device, it is generated elsewhere on a server and then it is proxied through the hijacked device,” he says. “This adds one more layer of obfuscation, avoiding detection with traditional deterministic methods.”
The ad verification pushback
Collectively, advertisers, media buyers, adtech companies and legitimate media owners selling high-quality inventory have been fighting back through greater use of ad-verification tools and some industry-wide initiatives.
“Research from the Trustworthy Accountability Group (TAG), which works with hundreds of members across the industry to tackle fraud, shows that levels of invalid traffic in Europe in 2019 stood at 9.2 per cent, but this level was greatly reduced to 0.53 per cent when working with TAG-certified vendors,” says Tina Lakhani, head of adtech at IAB UK.
Moreover, IAB UK’s own Gold Standard 2.0 recently introduced new requirements for certified companies to adopt IAB Tech Lab’s sellers.json and OpenRTB SupplyChain Object, as well as ads.txt, resources that should strengthen the industry-wide ability to combat fraud. Lakhani says working with TAG-accredited companies is key to turning the tide on ad fraud.
In September, TAG, historically US focused, merged with JICWEBS, formerly the UK entity overseeing standards for digital ad trading, to create a new body, albeit retaining the TAG name. Jules Kendrick, its managing director for the UK and Europe, asserts the new organisation is moving aggressively to build a worldwide standards infrastructure to reduce ad fraud, share intelligence on emerging threats and protect brand safety.
Given these reassuring moves, can CMOs leave fraud prevention entirely in the hands of the specialists? Absolutely not.
Scott Thomson, chief operating officer at Method Media Intelligence, says advertisers have to stay on top of the issue. “They cannot rely on doing it by proxy, be that via their agencies, or reliance on ‘tried but tired’ fraud detection methods, or indeed self-certified suppliers of ‘clean’ audience figures.”
Pete Markey, CMO at TSB, says marketing leaders need to work alongside their agency partners and tech vendors to ensure the required expertise is present at all levels. “Transparency should be the main requirement, especially as there isn’t a fix-all solution that is currently in-market. As more and more channels become digitally connected – TV seeing an important planning shift through 2020, for example – the opportunity for fraud in these newly connected channels could be greater.”
Understanding the problem exists and ensuring the right available technology is in place to prevent fraud and other forms of invalid traffic that lead to wasted budget should be the starting point for CMOs. Although a balance must be struck to ensure the problem does not hinder the important drive for innovation.
Fraudsters tuning in to connected TV
The point about TV’s growing digital convergence is an interesting one. “Connected TV (CTV) has a lot of appeal to fraudsters right now,” says Sam Mansour, principal product manager at Oracle Data Cloud. “This is due to it being a newer medium for digital advertising, with bigger measurement gaps, and because CTV CPMs [cost per thousand views] are extremely valuable.” Moat by Oracle metrics are among the tools available to marketers for monitoring over-the-top internet TV services and CTV for non-human traffic and other suspicious behaviour.
Major botnet ad fraud scams such as 3ve and 404bot have made global headlines and illegally siphoned off millions of pounds. Ever-evolving technologies increasingly allow for the creation of bots and other methods with near-human capabilities.
“Attackers are also becoming clever in reverse engineering against anti-fraud software so that they can avoid future detection,” says Roy Dovaston, co-founder of Click Guardian. “This is expected to create particular issues for mobile ad fraud, which is becoming more refined. Attackers are now able to create new IP addresses using flight-mode and other phone settings, in an attempt to circumvent anti-click fraud solutions.”
The war against ad fraud is set to rage on for a long time and may never be fully won. “From a CMO’s perspective, the best way to minimise the risk of ad fraud is to make sure you understand the different forms ad fraud takes, how the available tools work to address different types and to adopt a nuanced approach accordingly,” says Lakhani at IAB UK. “In short, you can’t solve ad fraud via a single approach; different types of fraud necessitate different tools to be working in tandem to reduce risk.”