Hitmetrix - User behavior analytics & recording

Performance-Based Campaigns Are Vulnerable to Ad Fraud

In the past, programmatic buying has rendered advertisers vulnerable to advertisement fraud. However, there is good news: last year’s ANA report suggested that this trend is changing, thanks to stronger filtration processes and security measures that counteract risky traffic sources. Study participants observed that programmatic media buys now carry the same risk level as general market buys. Still, there are fundamental considerations and metrics that also factor into ad fraud risk.

Rich Kahn, CEO and co-founder of Anura.io, observed that performance-based campaigns are especially vulnerable to ad fraud because it takes time to uncover both bogus leads and bogus credit card transactions. This time lag plays in the fraudsters’ favor: it could take months before the chargebacks come in, the leads fall flat, and the bot farms are exposed.

Bad traffic, and the fraudulent transactions that often accompany it, can derail an entire digital marketing campaign. Kahn’s tool, Anura, monitors traffic to separate real users from the fake ones. Anura frequently deals with conversion fraud, but Kahn sells his solution for the same cost to all advertisers, regardless of how they use it. However, Kahn has noticed that competing ad fraud solutions often focus on the protection of branding efforts as opposed to performance-based campaigns.

“A lot of people still spend a lot of money on branding,” said Kahn. “And fraudsters love that. Because how do you judge a branding campaign?”

So-called “vanity metrics,” such as viewability standards, are part of the problem. Most people assume that a digital ad meets viewability standards when it is actually viewed. But elaborate industry breakdowns of this term indicate otherwise. According to some criteria, a display ad makes a viewable impression whenever 50 percent of the pixels are in view for at least one second.

“The human eye takes a quarter of a second to focus on something and it takes the brain another half second to recognize what it’s looking at, so there’s three quarters of your second gone. Now that gives you another quarter of a second to capture a message,” said Kahn. “As a brand, is that really what you’re trying to buy?”

Fraudsters can exploit these weak standards. Google’s Senior Director of Product Management, Babak Pahlavan, recently published an online post in which he argued that the industry needs to embrace consistent guidelines for impression-based metrics so that marketers understand what they’re purchasing. Otherwise, providers will report viewable impressions differently and marketers won’t be able to gauge the efficacy of campaigns.

Pahlavan wrote, “[The lack of consistency is] a big problem. Because when consistent advertising viewability standards aren’t used, marketers may come to inaccurate conclusions about the effectiveness of their ads, which could lead to misguided buying decisions and suboptimal results.”

Kahn believes that even though most of his competitors are focusing on branding campaigns, his company is focused on helping performance-based marketers. He also understands that exploited marketers may have a strong desire to hold fraudsters accountable, but in practice, this can be tricky.

“With the internet the way it is, the privacy policies the way they are, the technical cloak and dagger you can do, and with the dark web, it’s so simple to hide your tracks on the internet,” said Kahn.

It takes extensive computer forensics and legal help to penetrate this obscurity. Fraudsters can effortlessly execute their crimes because they don’t care about the law, but victims and investigators are boxed in by restrictions and paperwork.

“If you’re trying to actually do the right thing, you have to follow the rules and regulations,” said Kahn. “So, you trace a threat down to a certain ISP and router and now you want to get the logs to track down the individuals. You have to file paperwork with a judge to get that information, because the ISP is not going to relinquish that information willingly. And you’ve got to prove why you want that information with all the privacy laws that exist.”

By the time these procedural requirements are met, the information being sought could be gone. Additionally, Kahn said that it may not even be possible to do without first establishing a certain level of damages.

Although new technologies can keep ad fraud in check, it seems likely that fraudsters will continue to wreak havoc on unprotected digital marketing campaigns in 2019.

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