One billion dollars – that's a thousand millions. Or a one with nine zeros. It is the sum that the industrialized countries want to make available für the poorer ones each year as a support to combat climate change. It is what Google is worth as one of the most valuable brands in the world. And at the same time, it's the amount of money that ad fraud will most likely cost us all around the globe in 2023.
No wonder advertisers have been making a lot of noise about ad fraud lately – and that with good reason. After all, a large amount of online advertising dollars go to waste due to bots, click fraud and co. While the costs to advertisers are quite obvious, it might surprise you that ad fraud is first and foremost a publisher problem.
That really gets you thinking huh?! Read on to learn all about it in this blog post, which kicks off our series on bad advertising habits.
Why publishers are getting hurt by fraud too
Digitalmedia is experiencing a challenging time these days. Many major publisher have to deal with huge staff cuts and shifts in leadership. Ad budgets are on the test bench. Third partie Cookies as we are used to them are a discontinued model. And at the same time, internet users' attention spans are getting shorter and shorter while the competition for them through social media and other players is getting even fiercer.
As you can see, the industry's problems can be traced back to a variety of different factors, but one of the biggest and least discussed is ad fraud. People always tend to think it is an advertiser only problem – which it definitely is. But there is another side to the medal as well. While advertisers lose money, which is on its own a huge problem, ad fraud has severe negative consequences for publishers as well. We dare to claim that publishers are even more hurt by ad fraud, as most of their business depends on being trustworthy to advertisers and of course to their reader base. And when trust is being lost in an economy that funds the whole game, the game is over.
Let’s have a closer look on how the game works in general …
With the exception of some pubs who have shifted their monetization towards subscription models, the vast majority of publishers pays their bills with the help of advertising. But advertisers are only willing to pay for the publishers inventory if the publishers are popular enough to attract the attention of the user, because the attention of the user is the number one commodity on the internet. So everyone is fighting to get it and to keep it.
Furthermore the more attention a publisher gets, the more advertisers are willing to pay for its inventory. The more expensive the inventory is sold, the more flourishes the publisher. And the more a publisher flourishes, the more journalists or content creators can be employed to produce content that gets the user’s attention – you get the point. The equation is very easy: Demand needs supply.
… and how fraud destroys the publishers good reputation
What fraudsters (we don’t like that terms as it sounds to playful) or cybercriminals do, is to trick advertiser into buying ad impressions that are not coming from real humans. This activity steals money from the advertisers pocket, suppresses the holy commodity of attention of the publisher and as a result the fake inventory can be offered at much lower prices to the market.This creates a snowball effect of publishers being forced to offer their premium inventory at much lower prices as well in order to stay competitive and creates a vicious cycle that deflates the entire market.
In this inhospitable environment, where it is increasingly difficult to determine high quality inventory from sophisticated ad fraud schemes, publishers stand to lose a great deal of potential revenue. But more than the money, ad fraud harms publishers by putting their good name on the line. So the fight against fraud is a constant battle that threatens publisher reputation and revenue. Luckily, the right tools and knowledge can help the industry sniff out and reject bad actors in digital advertising.
What publishers can do
In advance we have to admit right away: There exists no ‘one size fits all’ solution regarding ad fraud for publishers. Different cyber criminals use different techniques and therefore they require different solutions. The good news is: There are also several ad fraud detection companies that are more than willing to help you with this issue.
In principle, however, we would also always recommend that you get to grips with the whole thing yourself. There are some preventive measures you can take completely on your own.
We recommend the following must-dos:
1) Talk to your advertising partners and choose them wisely.
2) Be careful when working with third parties.
3) Keep an eye on traffic anomalies.
4) Use ads.txt.
5) Read our latest blog post on how to prevent ad fraud for more detailed information.
6) Keep in mind that ConnectAd takes this topic very (!) seriously. As we check all creatives and traffic in our network per default, we rather prevent ad fraud in the first place than fight it later on. If you want to know more about our working methods and ad fraud strategies, or if you are looking for a (more) reliable partner in this respect, please do not hesitate to contact us. We will be happy to assist you!