Know the signs of Programmatic Ad Fraud

August 10, 2016

Programmatic advertising, if executed properly, can be mutually beneficial for the advertising agency and the brand advertising their product.

Instead of relying on RPF’s and manual negotiations, a software program can purchase digital advertisement space in real time and optimize campaigns in order to get the highest exposure at the lowest rate. People get sick, spend too much time at the break room, have personal issues etc, whereas machines are simple to operate and don’t need to take lunch breaks.

Considering these factors (and a few others like improved behavioral prediction capabilities and an increased reliance on technology), it is no wonder that programmatic advertising spending by advertisers is on the rise and today, programmatic ad buying is one of the fastest growing segments of digital advertising. In fact, A recent study revealed that 96% of brands already use programmatic advertising technology in order to buy display ads, and in the next decade, 90% of all advertising buys will be purchased without human involvement.

This makes sense when considering a recent report by eMarketer that revealed that in 2015 programmatic digital display ad spending surpassed traditional and direct sale spending, with “nearly three of every five digital display ad dollars… flow[ing] through automation.” All forecasts predict that the increased spending on programmatic advertising will continue, and in 2016 alone, programmatic ad spending is expected to surpass $21.55 billion USD in the U.S, an increase of almost 40% from the previous year.

So (stable and controllable) machines are replacing (tired and sometimes hungover) employees – how can advertisers lose?

Machine-Bought and Machine-Viewed Ads

The single largest problem for advertisers is the prevalence of ad fraud bots. In 2015, human traffic on the internet exceed robot traffic for the first time in three years, so while this is a good sign overall, advertisers cannot dismiss the fact that nearly half of their target audience doesn’t really exist.

It is estimated that fraud bots will cost advertisers a whopping $8.2 billion in 2016, an increase from the $6.3 billion fraud bots cost the advertisers in 2015 and the $7.2 billion that the Association of National Advertisers initially predicted. What this means for advertisers is that, more often than not, the very machines that buy media for them ‘sell’ it to other machines.

Not exactly beneficial for a brand looking to expand market share, increase ROI and reach new audiences.

Fraud bots don’t just cause false statistics and result in millions of impression being seen by no one, they seem to be improving in their maliciousness; today, ads with higher CPM’s are more susceptible to exposure by fraud bots. That means the fraud bots are actively targeting highly competitive terms, therefore increasing their cost without any true justification.

So if fraud bots target everyone, why do programmatic advertisers have to worry?

Well, while fraud bots really do attack all digital advertisers, ads bought using programmatic buying technology are 14% more likely to be targeted by bots over direct media buys (by humans). Video advertisements, one of the mot widely used forms of content distribution in 2016, is a particular favorite of fraud bots, and programmatic bought video ads have a 73% higher chance of being targeted by fraud bots than direct (human) buys.

Ad-Blocking, Publisher Frauds and Lack of Transparency

Trouble doesn’t start and end with non-human traffic for programmatic ad buying.

Ad-blocking technology is one of the leading problems programmatic advertisers must face. Over 58% of respondents surveyed by eMarketer declared that ad-blocking software has a negative impact on their advertising.

Fake traffic brokers are also causing trouble for programmatic advertising – companies may inadvertently direct traffic to a fraudulent broker who then sends non-human traffic to the publisher’s site, charging high CPM rates without any viable deliverability. This method, in addition to robbing advertisers of potential impressions and clicks, generally increases the revenue generated for the fake bots, causing a lose-lose situation for publishers, advertisers and everyone in between.

Not only is programmatic ad buying full of fake ad bots, ad-blocking hardships and potentially fraudulent publishers, but one of the most concerning issue is the lack of transparency. An ANA/Forrester joint survey released in March 2016 showcased that while more than double of the respondents reported turning to programmatic advertising in 2016, they are still concerned with the lack of transparency. Without full visibility of ad placement, transparency of costs associated with programmatic ad buying, and inability to pinpoint the third party vendors involved in the ad buying leave frustrated brands and potential media buyers exposed to fraud and manipulation with little option to defend themselves.

Protection Against Ad Fraud Starts With The Agency

Not all programmatic ad buying is bad. Some agencies believe in transparency, result driven pricing and long-lasting relationship with clients.

appTV is one of those companies.

We’re not trying to hide it – we wrote this article to expose the dark side of programmatic ad buying, but we are also here to tell you there is another way. We pride ourselves on being an end-to-end advertising agency that uses programmatic technology (developed in house) in order to promote businesses and help them increase their ROI, and we do it with passion and compassion.

So what do we do differently? First of all, we’re telling you up front who we are, who wrote this article, and what our intention is; We want you to give appTV a shot because we do things a bit differently in the digital advertising world.

We don’t just say that we are a complete end-to-end agency – we have an active role in every step of the advertising way, and therefore take accountability for the campaigns we manage, the results they yield and the quality of traffic they provide.

We are a result-driven agency that is so confident in our ability to drive relevant traffic, that we even go as far as guarantying the quality of the leads and actions we bring brands (that’s right – you can hold us to our word here). How can we do that? Our programmatic ad buying software was developed over 5 years by veterans in the advertising industry and has been tried and tested by hundreds of internationally recognized brands in the past 8 months alone.

We oversee the creative process as well as the media buying process, and offer full transparency regarding where we place ads, what type of traffic we target and what publishers and advertisers we work with. As a result we are also very upfront about our fees – we do this because we believe that instead of shaving off the top and reeling clients in with low rates, clients will gladly use our services when they get the results they want.

We offer hybrid CPA and CPL pricing models that are geared to meet the marketing needs of our clients. We analyze campaign data in an ongoing manner and routinely provide clients with insight. We avoid campaign types that target bots, vet our publishers and do not let our clients pay for fraudulent results.

We do things differently and we want to do them differently for you. Click here to schedule a chat with our account managers to see (transparently) what appTV can do for you.