Market Spotlight – Addressing Attribution And Ad Fraud In Today’s Digital Landscape

By Aqilliz  

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Addressing Attribution and Ad Fraud

Digital advertising revenue provides much of the financial underpinning of e-commerce and online businesses. As marketing spend continues to shift to digital media, ad fraud has grown more pervasive than ever before. According to the World Federation of Advertisers (WFA), it is estimated that by 2025, over US$50 billion will be wasted annually on ad fraud. At the same time, marketers are facing increased pressure to focus on the metrics, conversions, and data-driven tactics that drive better business results.

As such, they suffer when ad fraud and attribution flaws not only compromise the validity of an initial impression but also skew results and retargeting, leading to reduced campaign performance and wasted marketing budgets — and with significant ad spend dollars on the line, accuracy in the attribution data is vital. This rising challenge has prompted regulators to turn their attention to cleaning up the digital advertising supply chain, calling for more transparency and accountability within the ecosystem.

Guided by a report published by IAB Europe, this blog post will examine the ad fraud crisis that pervades today’s digital media supply chain and how emerging technologies are best positioned to address them.

Thriving in complexity

Despite being a tumultuous year, a recent report from IAB and PwC revealed that digital advertising spending grew 12.2% year over year in 2020, with the total market expenditure on online digital ads estimated at $332.84 billion. To get a true sense of this magnitude, this is larger than the GDP of Malaysia and almost half the GDP of Saudi Arabia. With the digital advertising ecosystem being such a huge and complex market, this makes it extremely tempting to bad actors.

Furthermore, the sophistication of hackers attacking marketing spend has vastly increased. For the majority of fraudsters, the automation tools used to commit fraud are evolving without them having to do very much work — they simply have to hide and rewrite certain elements in order to evade more and more tests. Bot-makers can create millions of browsers that simulate human-like actions such as mouse movement, page scrolling, and clicks, to load webpages and cause ad impressions that appear human. Such activities manipulate conversion flows, significantly impacting an advertiser’s return on media investment, often jeopardising brand reputation.

Addressing attribution challenges

Attribution has often been described as trying to find a single source of truth for the relative impact of every interaction on the customer path to conversion. This data allows marketers to form better insights on where and when to invest marketing budgets and better project return on investment. However, there has been a longstanding attribution hurdle compromising the accuracy of that attribution data. The multifaceted, ever-shifting nature of consumer behaviour, added to the challenge of device and channel fragmentation today, has made true attribution difficult to measure.

Using this complexity to their advantage, bad actors steal or fabricate clicks to claim attribution for leads or conversions. They then collect premium payouts although they did not contribute any value along the conversion path. Attribution fraud includes everything from retargeting users about to convert to knowingly serving users with non-viewable ads. Beyond costing valuable advertising dollars, attribution fraud also leads marketers down a rabbit hole of fundamentally misunderstanding their customers’ behaviour. This could in turn result in the misinterpretation of how certain channels, devices and tactics lead to consumer actions, which then affects the overall performance of their marketing campaigns.

Detection doesn’t mean protection

To address this billion-dollar problem, the industry has put forward many solutions, including the introduction of ads.txt which measure and filter non-human traffic. These measures play an important role as they seek to bring back a certain degree of transparency and give ad buyers greater confidence in the validity of their ad impressions. With a higher level of trust within the supply chain, ad buyers will get more value out of their marketing dollars and are more likely to increase their spending — it’s a win-win for both sides.

However, while fraud detection methods exist to help marketers identify and monitor any suspicious activity, they can also provide a false sense of security when it comes to tackling ad fraud. As such, it’s vital to keep in mind that fraud detection doesn’t necessarily mean fraud protection. Since ad fraud comes in many different shapes and sizes, it’s necessary to implement multiple solutions that attack the problem from different angles to reduce risk and achieve greater outcomes. In order to address these challenges, what’s truly needed is a fundamental change in the entire advertising ecosystem. With trust between parties in digital advertising in desperately short supply, transparency is the only effective way to gain that trust back.

Fighting back with transparency

The complexity at play, size and growth of digital advertising are factors that have contributed to the rapid rise of ad fraud. In fact, a study published early last year showed that 15 percent of advertiser spend — around one-third of supply chain costs — is completely unattributable. This systemic opacity remains a breeding ground for fraud, and while industry actions are underway, this fight is far from over. The call for digital transparency has been around for years, but the idea really took off when Marc Pritchard, one of the world’s leading marketers, led the charge in reforming viewability, ad fraud and measurement within the digital advertising ecosystem.

To address the industry’s transparency woes, blockchain can offer a promising solution. With a distributed, immutable ledger that all campaign stakeholders are able to access with ease, brands and advertisers alike are able to ensure that all impressions being processed and paid for are valid. When partnerships between publishers and advertisers are transparent, publishers can easily tell which advertisers are willing to share their information, all the while repelling those who might have something to hide. This process can be better automated via parameters that are hardcoded into smart contracts that can flag whether impressions are legitimate or not. By leveraging the features of blockchain, advertisers stand to gain even greater visibility into who is taking a chunk out of their ad dollars before reaching publishers.

As digital marketing becomes more complex and fragmented, it is critical for marketers to modernise their tech stack and attribution models to ensure that they fully realise the ROI of their media investments. While the industry has developed solutions to provide greater transparency in programmatic advertising, marketer support of these efforts is vital to their success. By prioritising quality environments, accountability, and human engagement over clicks, smart marketers will instead focus on directing their investment towards strategies that can lead to more transparent data, better marketing outcomes, and greater ROI.

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