Digital ad spend is at an all-time high, and so is fraud, writes Asaf Greiner, CEO and co-founder, Protected Media, exclusively for ExchangeWire. Are brands reluctant to stamp out fraud, in favour of hitting increasingly high engagement metrics?

According to PricewaterhouseCoopers digital ad revenue in the United States rose 23%, reaching a staggering USD$40.1bn (£30.1bn) in the first half of 2017, while Juniper Research estimates that fraud will cost advertisers 9% of total ad spend.

Players in the ecosystem are of course aware of the fraud problem and taking action. They’re investing in certifications, defining traffic quality standards, and becoming members of industry organisations chartered with finding a solution. However, while all these efforts are commendable, it’s not clear they are making significant headway towards solving the problem.

A big piece of the puzzle is still missing. There isn’t a clear consensus around who in the marketing organisation should be held accountable and what types of fraud KPIs and systematic processes should be put in place to clean up ad traffic.

Who’s prepared to blow the whistle?

Management expectations put tremendous pressure on marketing teams to break the preceding year’s engagement records. Brand marketers are constantly chasing higher click rates, impressions, and views to meet their KPIs, to show the effectiveness of their online campaigns.

Marketing KPIs have become sacred – deemed the business sense benchmarks for the marketing team, they are an end goal in and of themselves.

With this approach, brands place CMOs in impossible situations where they are measured for something that can conflict with their own integrity. The CMO knows the cost of ad fraud better than anyone else in the organisation, but marketing teams need high engagement rates in order to meet their KPIs and increase both their spend and their longevity within the organisation.

So, it’s important to ask: is it fair to expect marketing teams to inspect their own KPIs with the purpose of reducing them by filtering out bad traffic? Is it reasonable to expect a CMO to tackle fraud head on when job success is measured by pumping up the KPIs month after month?

A recent Forrester survey seems to hint that many marketers may be in a state of denial. Most marketers who are accepting some mobile fraud estimate that it’s costing them 1-2% of their budgets, when in actuality that figure was closer to 10%, in 2017. Forrester’s survey also found that 43% of marketers have seen an increase in mobile fraud over the last 12 months, but only 19% of enterprise marketers currently have systematic fraud prevention in place.

Putting fraud KPIs on the agenda

Brands have to start to question who within their organisation is incentivised to catch ad fraud.

Brands need to build an incentive programme that will align marketers’ best interests with those of the organisation – with their success measured by preventing the erosion of marketing budgets by bad traffic.

One simple solution is to have the organisation agree on a traffic quality KPI, where marketers are measured for keeping fraud levels down in addition to CPC and CPM. This is an important step for giving the CMO responsibility for the profitability of ad campaigns, and not just the results, helping the CFO and CMO join forces to meet organisational goals.

However, making fraud prevention a measurable goal can’t be a siloed process. The fraud KPI needs to be calculated from the very beginning. Measuring fraud up front not only makes it a top priority, and ensures that it is a regular process, it also prevents fake data from undermining the effectiveness of future campaigns.

Take, for example, if a marketer wants to calculate the Lifetime Value (LTV) of a customer. Fake traffic introduced by fraud can skew the results significantly undermining the marketer’s ability to assess which customers are real, and which factors influences their loyalty and buying behaviours. Efforts to target and retarget could be sabotaged. Follow-up ads could be sent to bots instead of real people, and higher level retargeting strategies could be negatively influenced, since basic audience profile information is compromised by false data.

Fake data can also wrongly influence a marketer’s decision about how to tweak all of the parameters related to a campaign to improve performance including the type of ad unit, creative, publisher, location, timing, etc.

The problem can only be solved by CMOs stepping up to the plate, and putting clean traffic as a KPI on their scorecard. High-quality ad traffic should become the highest goal for improving marketing strategies, campaign performance, and for improving a company’s overall bottom line. KPIs that measure ad quality can introduce a science to ad measurements and bring back accountability, transparency, and trust to digital advertising.