Category Archives: ad fraud

Private Equity

Over the last few weeks there has been much reported about problems with automated digital buying, whether it’s Facebook’s misreporting of metrics, YouTube ads running within controversial videos or the latest that Header Bidding isn’t fixing brand safety problems. This problem has major implications on the future of the business of digital publishing.

Over the last few years open market real time bidding has taken off, driven primarily by agencies who are looking to arbitrage pricing to improve their overall margins. They create imaginary companies, agency trading desks, which simply sell inventory to themselves to sell to their clients at significantly higher CPMs than they paid. Agencies are looking for low price inventory that provides the highest margin. Clients aren’t looking deeply enough at site lists and sources of clicks to see how much bad traffic and click fraud is occurring. There’s just too much to wade through to find out.

This creates a need for publishers to create more impressions to sell through low quality and low cost content. Publishers created click bait and fraudulent traffic to make up for the “race to the bottom” pricing being offered by buyers. Sites like Buzzfeed, Diply, Answers, and Mashable use social media to generate traffic to content of absolutely no consequence;  “listicles” that require multiple clicks to complete. Each click results in a fresh set of ads being loaded and charged to advertisers. The industry went too far and now it is time to return to more reasonable practices.

As a buyer who embraces programmatic buying of digital advertising for many clients I see the value in using data to better select which ad impressions to bid on based on our clients’ needs. I counsel my clients not to use programmatic just to save money, but to use it to minimize waste that comes from buying “media space” instead of “audiences”.

Header bidding will help in allowing publishers to evaluate all bids simultaneously, thereby selling the impression to the highest bidder but there is little incentive for them to minimize the click bait approach that leads to the wormhole. The best outcome for all parties is for faster adoption of private marketplace (PMP) deals that can be executed programmatically. There is more transactional transparency for all parties. Publishers can better control who advertises on their pages and marketers can have better control of brand safety and content they approve of.

Accept the higher CPM that PMP’s require because you’ll be getting the same results or better on effectiveness. Don’t let low CPMs be the barometer for your digital media buy.

 

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The Dark Side of Programmatic Buying

Programmatic digital can be dicey when it comes to getting what you paid for and you should be concerned about fraud, bots, safety, and viewability issues that result in bad outcomes.

A few months ago a prospective client asked me to evaluate a small programmatic buy her agency had executed for her with one DSP. The agency thought the buy was great, given that they drove a CTR of .48%, higher than most campaigns with a CPM of $1.40. On the surface I would agree.

That is, until I looked at the source of clicks report. This was a small enough campaign, just under 10,000 clicks, that a simple scan of the source of the clicks made me question the real value of the campaign. Many of the URL’s were from out of the US (Belgium, Brazil, Malaysia to name a few) but his was supposed to be a US campaign. Many were from sites that I could not load if I tried. Many seemed to be legitimate sites, but the visits were very low quality and very brief. The average session time for clicks from this DSP was 1/3rd to 1/4th the next lowest referrer. Average page views were even lower.

I sent the source of clicks list to a third party fraud and safety expert for their opinion. About 50% of the clicks were “High Risk” for fraud and another 5% were “Suspect”.

So if this is true, the client’s CPC for real clicks just doubled, at a minimum. Since I knew which DSP was used I asked them for their opinion on the third party auditor’s findings. I was shocked at the response from the DSP salesperson; we take brand safety very seriously and we’re more than happy to deliver on any parameters mandated.  Normally, during campaign negotiations we need to know in advance if a campaign is being measured by a third party and we’ll set up with daily reporting so that we can optimize out of those placements, sites, creative, and or content driving fraud.” 

Let me translate this for you. He said that if they knew we were going to look at a third party safety audit that they would not have delivered those impressions. Want to know what was worse? The CEO of the DSP echoed the same sentiments when I raised the issue up the line.

Fraud and bot clicks are going to happen. Clients and their partners who focus exclusively on getting the lowest CPM or CPC will find that they are actually paying more than they think for real inventory. Use a third party verification service for your campaigns, even if it is just to keep the people you’re giving money to honest.

For more info go to http://www.ocdmedia.com

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