The easiest way to buy fraud is to optimize to a click: ad fraud on evolving mediums
Ad fraud has been a major concern for brands, ever since the ‘methbot scandal’ hit the headlines two years ago. As fraud follows the money, the industry needs to be further educated on how to combat this as all media starts to be programmatically traded.
IAS leads the discussion on ad fraud at Programmatic Punch
At Programmatic Punch, The Drum brought together Integral Ad Science (IAS) managing director of Southeast Asia Laura Quigley, Mediacom APAC chief investment officer Paul Waller, Intel regional digital marketing manager JAPAC Rohan Kamra and Omnicom Media Group chief investment officer Paul Shepherd to look into a future of ‘programmatic everywhere’ and eulogize on its impact on ad fraud.
A key point of union within the speakers was that ad fraud as a whole needed to be taken more seriously.
According to an IAS report in SEA, $520M is wasted in digital ad fraud. According to a recent report, an estimated 19% of worldwide OTT impressions were invalid and at risk to be lost to ad fraud a year.
Intel’s Kamra believes that, with huge numbers at stake, better education around the criminal activity is needed, so that the issue is taken more seriously. “I think there has to be a gentle education that this fraud is essentially money. It's a crime, there’s a stat that says that ad fraud is the second biggest crime in terms of value, after narcotics. When you have so much investment against narcotics in terms of just the judicial system, governance and policy. Why not this part? I think because it doesn't harm people in a fatal way, it's pure money. Hence, it's not being spoken about in such a level of seriousness, but there's a lot of money at stake and that money can be funnelled into 20 other things.
“We're here to talk about evolving mediums and where are the marketing dollars? That's where fraud is going to go. As we put more into digital, we continue to see the rise of fraud in over-the-top (OTT) and digital out of home (OOH). This problem's not going to go away. We will just see other and new types of fraud develop in these new mediums,” he added.
Omnicom Media Group’s Paul Shepherd also agree, saying he said all agencies and brands had to start with having an opinion on inventory but there was still an issue on accountability.
“It comes down to understanding and having an opinion on inventory. I've been around in programmatic since 2010 and you don't have to be Einstein to know that a site that you never heard of, which has millions of impressions in your country, is fraud. Where the hell did that come from? So I think understanding suppliers is where it should start, and it’s what agencies should do. Understanding supply technology is an insight that calls bullshit on numbers that don't make sense. It's where the focus has to be from a client point of view.
“If I'm a client, I don't want to pay for any fraud. It doesn't mean that fraud won't or doesn’t exist. We have bad actors in the industry, profiteering from fraud. The question that I always come back to is what is happening to those bad actors when they do it? Now there's a few cases go on in the US right now where I think is the first time that bad actors are going to be held to account, but there haven't been any major risks for these people,” he added.
While the accountability of bad actors is only just starting to be tackled, there’s a raft of activity that brands can do themselves. Working with a partner like IAS to safeguard is a key part of the strategy but Mediacom’s Paul Waller said brands also need to work out what their risk tolerance is.
“It is all about having an agreement in place with the trusted suppliers that will minimize your areas for risk but fundamentally you need to understand what is your risk tolerance. Like anything, if you're investing in anything, you need to know where the risk is going to be. What is your appetite for that versus the potential, because you can get a very low cost per thousand for any open exchange, but you know there's going to be potential for fraud within there. So what is the offset of that? You might lose 20% to half of your impressions, but you still actually might have a low cost per thousand. It's just understanding what you have and then moving forward based on your client's needs,” he explained.
A lot of brands have a low tolerance for risk and for those brands, particularly as they move into evolving mediums such as OTT and OOH, the key is establishing new metrics of measurement. Digital, the group agreed, has created a perfect environment for fraud because the legacy metrics can be gamed.
“The client teams at agencies or the clients need to take some ownership on moving away from price to effectiveness. Agencies live this day in, day out. We'll get a brief from a client, it will be a spreadsheet, it will have an ad unit, it'll have maybe 1500 ad units and there's a price, the consultancy will come back and say you've got to move your price by 30% but nothing about quality, nothing about effecting, some do. We've got to start changing the conversation away from price to effectiveness, and I actually think that comes from the marketers because at the end of the day agencies are slightly downstream,” said Shepherd.
The easiest way to do this, the panel agreed, was to shift the focus from legacy metrics and optimising to clicks.
“The one thing I would ask marketers to do is change the conversation from price from a click. The easiest way to buy fraud, ladies and gentleman, is to optimize to a click: fact,” added Shepherd.
A challenge for the industry is driving a new attitude to the metrics of success right to the top of businesses, sometimes beyond the marketers and into business leadership at brands.
IAS’s Quigley said that brands need to start moving this conversation into the c-suite, “It requires changing so much at the top because the CMO is going up to senior leadership and saying, ‘I did a great job. I've got a whole lot of clicks. I've got a whole lot of acquisitions. Give me that bonus’. It requires not just the CMO, but that senior leadership team, to realize that they've got to buy into the value and not just the performance.”
Quigly said that its business was already looking into how its technology can help across evolving mediums. On OTT, she said two types that emerge are via malicious apps and SSAI, server-side ad insertion fraud. On OOH, the traffic is invalid, rather direct fraud.
“I think there's a different conversation on fraud in traditional programmatic compared to the evolving mediums. It's more measurement success and I think that's where it's got to go. For radio, TV and out of home, we always had these quality metrics and then digital came along and we just said ‘we'll just stick a quantity metric on it’ and we've not reversed it. As some of these traditional mediums get digitized, we're still keeping the same metrics, but still not reviewing digital. It's kind of mad,” she added.
With the tracking of fraud across OTT and other evolving mediums in its infancy, brands and agencies should be learning from the mistakes made around display as a first step.
Integral Ad Science was a partner of The Drum Programmatic Punch APAC 2019. Register your interest for 2020 here.