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Online advertising has become the gold standard for companies around the world — sometimes replacing the traditional TV, radio, and print ads. Part of the reason for this is the sheer cost-efficiency of online ad campaigns compared to traditional ads on television.
With TV ads, companies have to pay for air time on different networks, set up a whole production with paid actors, scriptwriters, directors, makeup and special effects personnel—the whole nine yards.
Online ads, especially banner ads or sidebar ads on other websites, are much less costly by comparison. In fact, the average cost per lead for traditional advertising channels is about $619 while the cost per lead for programmatic display ads is about $38 (Source: Linchpin SEO).
So, if programmatic ads are so much more cost-effective, what’s the problem? Who wouldn’t want to be able to get roughly 16 times as many leads for the same ad spend?
The issue is that there’s a dirty little secret about programmatic display ads that the platform providers selling those ads don’t want you to know: The prevalence of ad fraud in the industry and how little gets done to stop it.
Normally, when advertising on someone else’s website, you would request a proposal, negotiate with a person, and trade quotes and modifications back and forth with a real person. Programmatic ads automate this process.
Instead of negotiating with a person, a programmatic ad system uses software to determine when and where to place ads in front of a specific audience. These software algorithms use a variety of rules and attributes to determine the best ad placement. It’s a big time-saver for people who have more job responsibilities beyond ensuring that every ad placement is perfect for a single ad campaign.
People looking to buy ad space may use a demand-side platform (DSP). Meanwhile, organizations looking to sell ad space may use a supply-side platform (SSP).
DSPs are software platforms used by advertisers to buy advertising space on other websites. Many DSP users employ impression-based revenue models (meaning they pay out based on how many people “see” the ad).
This is one reason why many DSP providers leverage viewability as a metric when checking for ad fraud—going “hey, look, it’s viewable, so obviously it’s legit.” However, this isn’t always the case.
SSPs aggregate high-end traffic sources to monetize them through the DSPs used by programmatic ad buyers. Their goal is to sell as much ad space as possible for as high a cost as possible. This doesn’t necessarily motivate them to ensure that the ad space they’re selling is from legitimate sources.
Fraudsters have been known to use domain spoofing to disguise their fake, low-quality website as more valuable websites to trick SSPs and their customers. The advertiser ends up paying way more than they should for ad space on a fake website that will probably either hurt their reputation or only generate fake leads (or both).
Programmatic ads come in many forms. Two of the most commonly used types of programmatic ads are display ads and video ads.
Display ads often take the form of a banner or a box on a website. You may have seen examples of this when browsing different websites — like a banner advertising computer parts on a magazine website.
Video ads often get put on social media sites that support video content — such as YouTube or Facebook. Video ads that play at the start of another video are sometimes referred to as in-stream ads, while videos put at the top of an “up next” feed are called in-display ads.
In both cases, programmatic ads are presented to a viewer based on some kind of parameter related to that viewer. For example, a computer parts ad might appear to people who have shopped for computer parts recently, visited a “how-to” site for building a computer, or subscribed to a computer magazine or similar website or blog.
In theory, this enhances the effectiveness of the ad by targeting someone who has demonstrated an interest in the product or service they’re being offered.
While programmatic ads can be highly effective and cost-efficient, it isn’t all sunshine and rainbows in the programmatic advertising marketplace. A lot of DSP and SSP providers pay lip service to stopping ad fraud and only presenting you with valuable lead sources.
Some even boast that they’ve added pre-bid fraud detection solutions to stop ad fraud in its tracks. The problem is that the so-called “pre-bid fraud solution” is only geared to detect GIVT, not SIVT.
GIVT, or “General Invalid Traffic,” is a term for simplistic bots that are easy to detect (often because they’re meant for innocuous tasks like crawling websites so search engines can index them). Meanwhile, SIVT, or “Sophisticated Invalid Traffic,” is the true threat since it’s almost exclusively used for fraudulent purposes.
As a result, an “ad fraud solution” that only filters out GIVT can’t be considered a full solution to ad fraud. Case in point: Some Anura customers in the past have discovered that, for the leads that they got through their “safe” programmatic advertising networks, they still had 35% to 40%, or higher rates of ad fraud. In fact, one client had an ad fraud rate of nearly 90% — fraud that the pre-bid solution missed, but Anura’s ad fraud solution caught.
So why are so many pre-bid fraud solutions only able to stop GIVT and not the SIVT that fraudsters actually employ?
One of the problems is that they rely on only one or two data points to determine fraud, which is not enough to identify sophisticated attacks.
Take, for example, viewability. On paper, it sounds effective. DSPs and SSPs want ads to be viewable. However, the definition of “viewability” is that a minimum of 50% of the ad was "in view" for a minimum of 1 second. So, people presume that it must have been seen by a real person!
However, viewability alone doesn’t tell you who (or rather, what) “saw” the ad.
Technically speaking, a display ad that’s one pixel tall and one pixel wide could be counted as “viewable,” even though it might as well be invisible to the naked eye. Plus, nobody’s ever going to click on it outside of a possible accident. This is a common ad fraud tactic known as pixel stuffing.
To make a long story short, viewability is susceptible to fraud because it:
So what can you do?
For any advertisers out there who want to make sure they aren’t spending money on fake leads and worthless impressions, it’s important that you don’t simply take a programmatic ad platform provider at their word when they say they have measures in place to stop ad fraud.
In many cases, their solutions simply aren’t enough to stop the more sophisticated fraud techniques. While some DSPs and SSPs do use effective ad fraud solutions and do their best to catch fraud, it’s smart to have an independent verification of your actual rate of fraud in your programmatic ad campaigns.
Contact Anura today and request a demo of our ad fraud solution so you can see how to put a stop to programmatic ad fraud before it eats away at your marketing budget!
Download our Ad Fraud 101 eBook today to begin saving your bottom line.
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