The never-ending digital ad fraud scandal just got worse: a $120bn cost to our industry
A recent report from the Association of National Advertisers put the cost of ad fraud at a staggering $120bn yearly. But where's the outrage? Anything is Possible's chief exec and co-founder Sam Fenton-Elstone tells us that the problem has become so staggeringly large that platforms and advertisers and platforms alike have been cowed into apathy - but it's not too late to change that.
Anything is Possible on how to unlock solutions related to ad fraud.
In her 2018 provocation/game-changing book No More Feedback, regenerative business leader Carol Sanford drew attention to the unintended consequences of aiming investment toward negative outcomes on the basis of bad targets.
The latest report into ad fraud from the Association of National Advertisers was as unwelcome and expensive an illustration of these systemic effects as we could ever want to see.
But maybe you haven’t seen it. After all, the topic is an all-too-common blind spot across our industry. The gist of the ANA’s latest findings, developed in partnership with Juniper Research, is that the cost of Ad Fraud to marketers is set to hit $120bn this year. That's up a massive 121% year-on-year.
It's more than 40% of all US ad spend.
What can we do?
We knew the problem was bad. It’s much worse than we thought.
The problem is so big now that it is triggering an apathetic response. When people encounter problems too big to solve by themselves, they tend to look the other way. Pretend it isn’t happening.
It’s true that it’s too complex a problem to solve from an individual perspective. The culprits are getting more and more sophisticated. So what’s the point in trying?
A diverse roll-call of large, vested interests inside the digital advertising industry are benefiting from that collective inertia. There are the grifters making ludicrous figures from fake clicks. Then there are the agencies prioritizing cost-per-mille (CPMs) over more authentic measures of success. Finally, the adtech platforms unintentionally providing ecosystems deeply entwined with mass-scale criminality.
The tech giants have built incredibly sophisticated tech for planning, optimization and attribution. Why can’t this be said for detecting ad fraud?
Because there’s no incentive for them to change. We need to give them that incentive.
Media buying in these hostile environments has become a sophisticated, specialist skill. So agencies have a huge role to play as guardians and gatekeepers of brands’ media investment. Honesty, transparency and independent advice - the core of conscious advertising - are our most effective tools.
And on the brand side, marketers must start demanding access to the full picture before they make an investment decision. They must get used to insisting that the true extent of digital ad fraud is baked into planning, measurement and reporting.
Everyone agrees something must be done - because ultimately, agencies and media buyers are facilitating a mass ripoff of their clients. But because it’s everybody’s problem, no one single stakeholder has tackling ad fraud as their main priority. This creates a lot of talk, but not a lot of action.
(Except the heroes at the Conscious Ad Network, who have an anti-ad fraud manifesto right at the heart of their values, and are working hard to raise awareness and develop practical solutions. They feel pretty vindicated right now. But I bet they’re not enjoying it.)
What we as an industry should be doing is looking the problem square in the face and making connections with like-minded individuals, brands and agencies to work out a way to handle it.
That’s the macro view, which we will solve through political pressure and drawing the industry’s attention to the problem. But there are close-up strategic recommendations we can bring to our clients now that will start making a difference immediately:
Premium supply paths, outside the big walled gardens, that reduce the injection of fraud, have to be part of every brand's media strategies, starting today. Whether that's across new(ish) channels like digital out-of-home, audio and connected TV (CTV), or building direct partnerships with publishers.
Fraud will prevail while media is transacted in open exchanges. Not all media is the same. This is a digital problem. Traditional media channels are largely protected. The perceived cost of investing in broadcast channels suddenly doesn’t seem so bad when you can have the guarantee that your ad is being seen by a real person and not a bot from the troll farm.
CTV represents a fantastic opportunity to deliver big-screen, targeted advertising to audiences that have switched away from linear delivery. But if we don’t control fraud now, it will become as murky as the display ecosystem is already.
Until the open web and media giants clamp down heavily on the widespread fraud we see today, this will continue to tarnish digital advertising’s credibility. Those of us who know the power of digital to deliver truly transformative effectiveness have a duty to stand up and do something - or brace ourselves for the next report.
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Anything is Possible
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