The adtech sector is well aware that there is problem with fraud in advertising. Last year on ADTEKR we wrote about how the industry is plagued by an increasing amount of fraudulently generated non-human traffic. This week the World Federation of Advertisers (WFA), the global organisation who represent the common interest of marketers (members include the likes of Unilever and Visa) issued its “Compendium of Ad Fraud Knowledge for Media Investors“.
This report (paywalled – only available to members) from the WFA has received a fair amount of attention in the advertising press. We take a look at some of the key issues and guidance that have been highlighted since its release.
Key stats according to the WFA
- Click fraud will cost advertisers more than $50bn by 2025 (according to the FT this is based on the expectation that over the next decade global investment in digital media will grow to $400bn-$500bn a year and that at least 10% of this will be exposed to fraud).
- Ad fraud is second only to the drugs trade as a source of income for organised crime.
- 9/10 WFA members believe that the structure and systems in the digital media ecosystem are to blame for fraud.
- Ad fraud accounts for 30% of online ad market.
The underlying message from the WFA
Marketers lose out big time from ad fraud and need to demand transparency to fight the fraud; publishers must also be committed to combatting fraud and should be less driven by clicks and more invested in where these click-throughs come from.
The WFA offered some specific advice to enable brands to reduce exposure to ad fraud in four key areas:
- People and technology: brands need to develop in-house expertise to support vendor selection, work with cyber security partners to help understand common threats and demand full transparency of investment, including full disclosure of the websites being used to promote their products or services.
- Education and communication: Brands need to set clear expectations of what they demand from their partners. They should set appropriate metrics that, where possible, relate back to business outcomes. They should also encourage open information sharing related to preventing ad fraud.
- Standards: Brands should avoid run of exchange buys in favour of databases of safe sites. Advertisers that need to hit digital investment targets may have to accept that these will not be achievable without exposing themselves to high levels of fraud.
- Governance: Contracts with agencies and vendor partners need to be revised to ensure that there are clear penalties for misallocating spend to ad fraud related inventory, where preventing it could be reasonably achieved. Those elements of the ad tech chain that have benefited from fraudulent activity in the form of commissions and fees should be requested to return them to the advertiser.
According to the WFA, in order to engage with the above marketers will need to show leadership to drive change – in the words of its CEO, Stephan Loerke:
“Advertisers are the sole victim of ad fraud and the WFA wants to equip them with the tools to minimize their exposure. There is much that advertisers can do to improve the situation in terms of setting new standards, contractual changes and increased transparency, but ultimately behaviour change is required across the industry.”
Interestingly the UK’s Joint Industry Committee for Web Standards (JICWEBS) – an independent body that defines best practice and standards for online ad trading (which includes publishers such as the Financial Times and Trinity Mirror and advertisers including Reckitt Benckiser) has recently published a set of Good Practice Principles which aim to reduce the risk of fraudulent ads being served. This provides a set of principles against which marketers can audit publishers, agencies and other ad tech providers, seeking verification on the processes such companies have in place to reduce the risks around fraud. Those companies who can demonstrate that their processes are in compliance with the JICWEBS principles will receive certification. The hope is that they will become trusted ad tech players. The principles are in line with the advice the WFA has given and cover issues such as fraud education and policies, ad inventory sources and anti-fraud technology.
Ad fraud is certainly a complex and evolving issue. As the industry grapples with the enormity of the issue there is no doubt reports such as the WFA’s and the publishing of auditing principles from industry bodies like JICWEBS all serve to underline that fact marketers need to be investing time in dealing with this issue in a way that has practical and real results. They also serve to remind others in the ad tech ecosystem that marketers will expect their partners to be on board and as committed to combatting fraud as they themselves are.