The conversation around ad fraud is changing for digital consultants. A new study projects the cost of ad fraud to digital marketers will drop in 2019 to $5.8 billion—down from $6.5 billion in 2017.
“That 11 percent decline in two years is particularly impressive considering that digital ad spending increased by 25.4 percent between 2017 and 2019,” states the study, which was co-authored by digital fraud monitor White Ops Inc. and the Association of National Advertisers (ANA).
The report, the 4th year it has been published, credited the reduction a few ways. It found that “the majority of fraud attempts are getting stymied before they are paid for, by DSPs and SSPs filtering fraudulent bid requests, by clawbacks, or by other preventative measures.”
An industry initiative called ads.txt has also helped reduce desktop spoofing, “with 78 percent of the top volume domains in the study using ads.txt files to prevent their inventory from being successfully spoofed by the time of our study,” the report notes.
Moreover, digital ad buyers—at least those in the top tier—are getting better at avoiding ad fraud altogether.
“This year, every buyer in the study knew about fraud risk; 90 percent had MRCaccredited fraud verification measures in place to deal with this risk,” the report states. “For the top quintile of buyers, fraud was nearly nonexistent.”
Michael Tiffany, co-founder and president of White Ops, wrote in the report’s introduction: “[T]hings are better than they have ever been.”
Still, the study got a mixed reception from Shannon Chatlos, vice president of digital at GOP firm Strategic Partners & Media.
“The study’s great, glad to hear the bot issue is being managed. But believe me, they will come up with a creative way to keep their margins high—they meaning the digital ad industry,” she said.” Invalid traffic (from bots) is a huge problem, but we also see low-quality domains and small player sizes as another huge issue. Marketers are too focused on quantity and not paying enough attention to quality.”
The White Ops-ANA report looked at 2,400 ad campaigns run by 50 participants on 606,000 domains. That included 130,000 ad placements garnering 27 billion impressions. The study also examined the different ad formats on desktop and mobile. Web video in both cases had the highest fraudulent traffic with 14 percent of spend lost. Another problematic area was in-app video, which saw an 8 percent fraud rate.
Here Chatlos notes that it's not just ad fraud that’s a problem—brand safety can also be an issue. She recalled a campaign where her client’s ad ended up on an app that promoted illegal substances. “The app is actually an incredibly popular game, but it still doesn’t pass the sniff the test,” she said.
While Chatlos recommends practitioners use a real-time digital marketing dashboard like the one offered by Adobe to monitor buys, “sometimes you can’t get down to the app level.”
If anything, the study reinforces the need for digital practitioners to remain “super diligent,” she added. “You have to be sure you’re putting your client's brand in a safe place for them to be. It really matters for companies and public affairs [groups]. If they’re running on sites with questionable content, that’s not a great way to impress influencers."
Mike Schneider, a partner at the Democratic digital firm Bully Pulpit Interactive, warned that the problem of ad fraud will increase closer to the first presidential primaries and Election Day 2020.
“I don’t think the bot battle is over by any means,” he said. “We tend to see ad fraud spike when people are pumping more media spend into the ecosystem around a specific date or deadline.”
But Schneider said that practitioners now have the tools to avoid having their digital buys eaten by bot traffic. “Responsible buyers have used tools to monitor and block bot fraud for several election cycles. But it requires a certain level of scale, technical expertise, and frankly, attention to detail to solve for it.”
Chris Talbot, a Democratic digital consultant, framed the discussion in a different way — putting it in the context of the competition between traditional media and digital consultants.
“Digital waste is a valid concern, but it's mostly brought up in politics by dinosaurs who either don't understand media or are incentivized to keep campaign money where it's been,” he said. “They don't seem to mind traditional media waste at all. Hopefully the ever-improving digital offerings help us move Democrats further out of the dark ages.”