How Advertisers are Fighting Digital Ad Fraud

Fraud is one of digital advertising’s most pressing issues, and solutions thus far have been hard to come by.

Two of the most common forms of ad fraud are pixel stuffing, in which ads are hidden on sites in invisible pixels, and domain spoofing, in which fraudulent sites mimic premium publishers and attract ads in exchanges.1 Nonhuman traffic is another common form – sophisticated bots generate meaningless impressions and pageviews on ads.2

Juniper research estimates that advertisers will lose a combined $19 billion to ad fraud in 2018, which amounts to $51 million every day. If fraud continues at its current pace, yearly losses could reach $44 billion by 2022.3

Furthermore, a report by the Association of National Advertisers estimates that fraudulent traffic will account for 9 percent of digital display spend and 22 percent of video ad spend this year.4

Video is the most common target for ad fraud – video accounts for 45 percent of total ad spend and 64 percent of total ad fraud.5 But fraud affects all types of advertising, including newer forms like influencer marketing.

Here are some ways that advertisers are fighting digital ad fraud.

Trusting Trade Bodies
In June of 2017, the Interactive Advertising Bureau introduced ads.txt, a text file meant to prevent fraudulent sales on ad exchanges.6

Participating publishers and exchanges place an ads.txt file on their web servers, listing all partners that they’re authorized to work with. This allows advertisers to ensure that programmatic platforms and publishers are legitimate partners before buying inventory.

So far, it has been embraced by the industry – 60 percent of the top 1,000 publishers in the US had uploaded ads.txt files to their sites as of April 2018.7 But ads.txt is not perfect.

“The most fundamental loophole in ads.txt, beside the lack of support for mobile app inventory, is the need to trust, not that others are validating but that they’re not complicit in the fraud,” said Curt Larson, CPO at ad tech firm Sharethrough.8

To fix some of these issues, IAB has released an update called ads.cert. While ads.txt only verifies that an exchange is authorized to sell a publisher’s inventory, ads.cert repeatedly validates the information at every step of the process, ensuring that nothing is modified along the way.9

“Ads.txt is sort of the store directory. It’s Rolex saying here are the authorized places to buy a Rolex. But the store could be selling fake Rolexes on the side. Ads.cert is the certificate of authenticity traceable back to the manufacturer,” said Ian Trider, an executive at programmatic platform Centro.10

Trustworthy Accountability Group, another trade body, has also taken measures to curb fraud in the digital advertising industry. TAG launched the “Certified Against Fraud Program” in 2016, granting a special seal to all legitimate companies that meet certain anti-fraud standards.

The results have been promising. A 2017 study showed that “use of TAG Certified distribution channels for digital advertising cut the IVT rate to 1.48 percent across more than 6.5 billion display and video impressions, reducing the level of fraud by more than 83 percent compared to the broader industry average.”11

Holding Influencers Accountable
Fraud is not exclusive to programmatic advertising, though. Influencer marketing, a strategy in which brands advertise through influential people on social media, is also affected by fraud, in the form of fake followers and engagement.

Anti-fraud company Sway Ops analyzed a day of posts on Instagram and found that over 50 percent of engagements were fake. Even more troubling, the company analyzed 118,007 comments and found that only 20,942 were not posted by bots.12

Estimates for other sites are equally concerning – up to 15 percent of Twitter accounts may be fake, and up to 60 million Facebook accounts might be run by automated bots.13

Unable to determine an account’s number of fake followers, brands are beginning to change the way they pay their influencers. To discourage fake followers, advertisers are now starting to pay per impression rather than by an individual’s number of followers.14

“We don’t want to charge our clients for any eyeballs that are not actually seeing posts,” said Leah Logan, VP of media products at influencer agency Collective Bias. “The pay-for-reach model is no longer acceptable.”15

Mavrck, a Boston-based marketing agency, is leading the charge against influencer fraud. The company recently released a system that uses an algorithm to analyze an individual’s posts and determine how likely it is that they have bought followers.16

“A year ago, we had benchmarks that were like, ‘This is what you should be getting. If you’re above or below that benchmark, it’s kind of fishy,’” said Lyle Stevens, CEO of Mavrck. “[Customers] wanted us to make it very simple and obvious whether or not this person bought followers.”

Embracing Branded Content
To protect their brands and budgets, many advertisers are turning to a classic and tested advertising method: branded content. In short, branded content is native advertising that uses any form of content, such as articles, videos, or interactive graphics, to promote a brand.17

Unlike programmatic advertising, branded content often involves a direct relationship with publishers, and thus has low potential for fraud.

As a result, advertisers and publishers are investing heavily in branded content. In 2017, global branded content spend was $5 billion, and the market is expected to increase 40 percent year-over-year through 2020.18

A study by Boston Consulting Group shows that branded content is palatable to consumers – 96 percent of people trust brands that provide useful information without trying to sell something.19

“We are no longer placing (mass) ads to reach an audience to drive response. Advertising is a critical piece of the customer experience, and we are treating it as such,” said Liz Miller, head of the CMO Council.20

While there is no silver bullet to combat ad fraud, what’s clear is that the industry has taken notice and taken steps to fight back.

Content Personalization

1. Vidakovic, Ratko. “The Beginner’s Guide to Digital Ad Fraud.” AdProfs, AdProfs, 17 May 2017.
3. Southern, Lucinda. “The Fight against Ad Fraud in 4 Charts.” Digiday, Digiday, 14 Mar. 2018.
4. “The Bot Baseline: Fraud in Digital Advertising 2017 Report | ANA.” ANA, Association of National Advertisers, 2018.
5. Southern, Lucinda. “The Fight against Ad Fraud in 4 Charts.” Digiday, Digiday, 14 Mar. 2018.
6. Benes, Ross. “WTF Is Ads.txt?” Digiday, Digiday, 21 Nov. 2017.
7. Pathak, Shareen. “How Influencer Marketing Has Changed, in 5 Charts.” Digiday, Digiday, 3 Apr. 2018.
8. Peterson, Tim. “Ads.cert Is the Digital Media’s Latest Effort to Combat Fraud.” Digiday, Digiday, 25 July 2018.
9. Davies, Jessica. “WTF Is Ads.cert?” Digiday, Digiday, 8 Dec. 2017.
10. Peterson, Tim. “Ads.cert Is the Digital Media’s Latest Effort to Combat Fraud.” Digiday, Digiday, 25 July 2018.
11. “About the TAG ‘Certified Against Fraud’ Program.” TAG, Trustworthy Accountability Group, 2017.
12. Pathak, Shareen. “In Cannes, a Marketer Backlash to Influencers Is Growing.” Digiday, Digiday, 25 June 2018.
13. Faull, Jennfier. “Influencer Marketing Fraud – How Big a Problem Is It?” The Drum, The Drum, 25 June 2018.
14. Liffreing, Ilyse. “Wary of Fake Followers, Agencies Change How They Charge for Influencer Ad Campaigns.” Digiday, Digiday, 18 July 2018.
15. IBID
16. Faull, Jennfier. “Influencer Marketing Fraud – How Big a Problem Is It?” The Drum, The Drum, 25 June 2018.
17. “What Is Branded Content?” Market Track, Market Track, 2017.
18. Gupta, Kunal. “Branded Content Spend Poised to Reach $7 Billion In 2018.” Polar, Polar, 4 Dec. 2017.
19. Zuckerman, Neal, et al. “Branded Content: Growth for Marketers and Media Companies.” BCG, Boston Consulting Group, 30 July 2015.
20. IBID