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Ad Fraud Podcast Future of Media

As ad fraud invades audio, here’s what marketers can do to protect themselves and their budgets

By David Zapletal, Chief innovation and media officer

August 6, 2021 | 7 min read

Audio-first channels are witnessing an influx of advertising dollars, thanks to the growing popularity of podcasts, audio chat rooms and other formats. With this surge, however, comes a new wave of ad fraud. David Zapletal, chief operating officer at Digital Remedy, outlines key steps that marketers can take to mitigate risk and protect the integrity of their audio media buys.

Phone atop shattered CD

Audio ad fraud is becoming an increasing problem for marketers

Digital ad fraud has been a pervasive problem for years, and it’s estimated that, by 2022, fraudsters will steal up to $87bn from the ad marketing industry every year.

Like other forms of cybercrime, the menace simply jumps from one medium to another as fraudsters look to exploit new vulnerabilities. Their preferred targets: booming channels with little oversight, where they can extract the most money before the industry catches on in an incessant game of digital whack-a-mole.

Having blazed through connected television (CTV) and over-the-top (OTT) advertising, fraudsters have now set their sights on digital audio. From platforms including Spotify and Pandora to podcasts to in-venue broadcasting, fraudsters are following the digital audio boom.

Fortunately, brand safety advocates are hot on their trail, policing the frontlines to uncover and quash ad fraud in all its forms to keep the digital media space safe from their exploits. So why is digital audio the latest target of ad fraud? And how can marketers protect their media buys and their budgets?

Digital audio is irresistible

Like CTV and OTT before it, there’s been a huge increase in audiences flocking to digital audio, especially during the pandemic. The popularity of podcasts in particular has accelerated, and along with the surge has come a boost in ad spending, with revenues approaching $1bn, despite an overall downturn in ad spending during the pandemic.

Because advertisers are investing in the channel, there’s plenty of money on the table for fraudsters to steal. And just like the early days of CTV and OTT, it seems advertisers are so eager to buy inventory to capitalize on the traffic that they’re either ignoring or willing to accept the fraud risk.

To complicate things, there’s little oversight for the relatively new channel. With no unified regulatory body, it’s just like the wild west of CTV that we saw three years ago. If we don’t move quickly, by the time the industry catches up and gets things buttoned up, fraudsters will have made off with millions of dollars – if not more.

Ferreting out fraud: what to look for

One of the ways marketers can fight back against digital audio fraud is to be vigilant in reviewing reports and look for these three big tells:

1. Questionable or invalid traffic sources. The server between the content and the ad is a mystery box where a lot of bad things can happen, including fraudsters rerouting traffic to suit their needs. For example, you might see apps with massive ad-driven download volume but little traction on app stores – a sign that the traffic has been rerouted. In another instance, last March a company that broadcasts audio ads at sporting venues saw a massive spike in traffic – during lockdowns when live sports were on hold. How does one explain that?

2. Poor quality. Not all fraudulent traffic is invalid – some of it is just useless. For example, it might come from a streaming app company that puts streaming sticks or devices in bars and offers a revenue share. They plug it in, turn it on and it plays a short piece of content, followed by an ad call – no one’s really paying attention. Or it might still be playing at 7am when the bar has been closed for hours and no one’s even there to listen. Sure, the ad played, but did it reach anyone?

3. Impersonation. Lookalike companies can dupe marketers into buying their traffic. For example, in August of last year Spotify faced an issue in which counterfeit shows distributed by its hosting platform Anchor allowed shady creators to distribute dozens of shows with the same or similar names as popular podcasts. In this scheme, the copycat creates the show, uploads it to the platform and then uses the platform’s ad injection to monetize listeners who have no idea that it’s not the real thing. There are also fraudsters who spoof reputable broadcasting companies, using very similar names to bait advertisers in to buying what they believe to be legitimate inventory.

So what’s a marketer to do?

Until the Media Ratings Council establishes a standard or a big advertiser comes forward to sound the alarm and question sources, marketers must DIY their own fraud protection. There are a few critical guidelines to keep in mind.

1. Buy from reputable sources. This is the first place to start: have you or your friends or colleagues ever heard of this brand? Does the company have a LinkedIn presence? A legitimate website? If not, walk away. High-quality inventory will come from the top brands that you and your friends recognize, while low-quality offerings will come from online radios and apps with low profiles claiming to have millions of impressions. Tune in your spidey-senses to detect spoofing or the mirroring of the names of legitimate sources.

2. Examine the metrics. Three key pieces of data to examine closely are:

  • The IP address. If a single server reports hundreds of thousands of impressions, that’s a sure sign of fraud. You’d never see that in reporting from a larger vendor or major audio streaming company.

  • Pricing. If it sounds too good to be true, it probably is. Compare what reputable sources charge against a brand you’ve never heard of – the lower-quality inventory may be half the price, but you get what you pay for.

  • Frequency. Be wary of ‘pay-to-listen’ schemes in which people get paid to keep a browser open all day playing audio ads, thereby driving up frequency rates in reporting. Instead, choose platforms such as Pandora that ping listeners for engagement with an occasional ‘Are you still listening?’ prompt.

Work with a partner that has strong brand safety parameters. When you partner with a buying platform that works with trusted third-party verification, cybersecurity and anti-ad fraud companies, you benefit from the reporting and expertise that can help mitigate the risk.

Ultimately, if marketers buy carefully, fraud is unlikely. But in the rush to capitalize on the audio boom, some brands value quantity over quality. That incentivizes fraudsters and hurts the entire industry. When we stop creating positive outcomes for the fraudsters by being diligent in our buying, it removes the incentives and they will move on.

David Zapletal is chief operating officer at Digital Remedy.

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