The Cost of Complacency: Why Marketers Must Confront Digital Fraud
What would you do if every day you came home and found that 30% of everything you bought in the last week was stolen?
My goodness – you’d install new locks, invest in surveillance equipment and probably buy a pit bull to watch the place.
Hey marketing people, let’s face it. This scenario is happening every day in our media buys. We’ve got a lot on our minds. So, it’s understandable that while we’re all wrestling with how to get the most value from AI, how to reach and motivate stubborn target audiences and the other big issues of the day, the industry has ignored one big enchilada: Digital Fraud.
For decades, the media business has believed that digital fraud is a minor annoyance – an unspoken cost of doing business. Well, that’s not true. Digital fraud is a huge problem that robs marketers of major value. But fortunately, we don’t have to put up with the widescale theft that we’ve all accepted. There are real solutions.
We’re Being Robbed and We’ve Had Enough
When developing media plans for clients, imagine telling them that only 70% of the activity will be accurate. Ads won’t generate the intended awareness, traffic leads or sales. We will waste budgets on false impressions and clicks that will never amount to intended conversions. Malicious actors will use deceptive tactics, generating fake interactions that won't translate to real customers. Most of the work we’re doing won’t work. Worse yet, we’ll optimize programs based on bad information… This happens all the time and, frankly, it’s just unacceptable.
A report published by Juniper Research reveals 22% of all digital advertising spend in 2023 was attributed to fraud. They also reported that globally, nearly $84 billion of ad spending was wasted last year and is projected to increase to $172 billion in just five more years. While some argue the measurement of digital fraud is elusive and the exact scale is disputable, there's widespread agreement that it is significant and only getting worse.
“The digital landscape opened so many fantastic opportunities in media, but digital fraud complicates its true potential,” says Ellen McKnight, Media Planning Director at SMA.
Ad Stacking, Domain Spoofing, Impression and Click Fraud, Oh My
Digital fraud takes many forms; whether traffic to a website is bot generated, or multiple ads are layered on top of each other on a single ad space, it’s happening and it’s getting more sophisticated.
Digital fraud hides in plain sight and has become a cost of doing business in the digital marketing ecosystem. We have warped perceptions about the value of efforts – what’s working and what’s not – and are resigned to accepting lower KPIs and diminished ROI. Digital fraud skews metrics, pollutes audience segments and distorts effectiveness. Instead of being in an uproar, we end up holding our efforts to deflated benchmarks, blindly accepting these lies.
Tackling the Problem Head-On
Shame on fraudsters for creating this grand scheme to rob the industry of budgets, but also of integrity. Also shame on the industry for going along with it for so long. We must work together to restore confidence in media planning and the legitimacy in reaching and impacting real consumers, not bad actors. Agencies need to champion it, and clients need to demand it.
How can advertisers avoid wasteful and unproductive spending? McKnight says, “We don’t set and forget media planning and buying. We are deliberate, cautious, and constantly improving our programs.”
At SMA we have practices in place to avoid digital fraud wherever possible. These include:
Responsible Programmatic Buying
Programmatic is a hotbed for digital fraud. But we can still utilize these cost-effective networks by taking a more tactical and strategic approach to the buy: limiting exposure to low quality or unknown websites; implementing first party data utilization; and curating inclusion lists.
Manual Quality Control
We take a proactive and reactive approach to analytics. This means daily campaign management of incoming traffic from ad exchanges, consistently auditing site content, and an agile response in optimizations.
Precision Audience Targeting
Tight targeting = less waste. Deterministic models, inclusion lists, ICPs based on offline data attributes – these are just some of the ways we reach the right customers and avoid fraud.
Tracking and Attribution Modeling
Properly tracking and attributing each click, website visit and conversion helps to determine effectiveness and success when it comes to ROI. Tracking and attribution modeling are essential in avoiding channels with high levels of fraud and focusing efforts in channels with the highest return.
Advance Methods and Services
Rules-based prevention, statistical analysis, behavioral detection and machine learning methods continue to be effective tools in detecting and preventing fraud at an advanced level. Machine learning/emerging AI keeps up with constantly changing fraud tactics.
We must also acknowledge the problem before we can fix it. We are calling on Marketing to reset expectations and ask for more accountability – of agencies, marketing teams, platforms, and vendors. Part of this is creating benchmarks that accurately reflect performance, as well as exploring alternatives to CPM pricing and last-click attribution. We need to recalibrate for realistic and truthful KPIs, prioritize quality over cost-cutting, and accept what KPI’s look like in a post-click fraud eutopia.
It’s time to stop quietly accepting this deception and find the truth in our efforts.
How Can We Help You?
Some of our best client relationships began with a single project. If what we do seems to match what you need, large or small, let’s talk.
