Adit Abhyankar, Visual IQ, executive director, asks if there is an alternative to overcome ad fraud?

Many marketers acknowledge the presence of advertising fraud in the ad tech industry, but recent ExchangeWire articles have reignited the debate.

Research suggests that up to 50% of all billed-for ads are generated by non-human traffic.

While a lot of marketers dismiss bot traffic as a nuisance, estimates suggest online ad fraud could be costing them up to £6 billion annually. But could better measurement be the solution to combatting it? First, let’s consider the current state of the market.

With increased online bot traffic, it is harder for marketers to distinguish between legitimate and fraudulent activity, as well as generate a true evaluation of the success of a campaign.

Unfortunately, online ad fraud affects all stages of the purchasing process including click rates, impressions and conversions:
Click fraud is the most common type of fraudulent activity and costs advertisers lost revenue as it creates inaccurate results without increasing or producing any sales or conversions.

Impression fraud is when ad impressions are made - frequently through bot activity - but have not actually been seen by a human.

It is often initiated by larger fraudsters who design bots to take over a dormant or inactive computer and then programme these bots to imitate an actual user viewing advertisements or pages.

Fraudsters also carry out impression fraud by rendering certain adverts invisible to viewers, or even hide them behind other adverts.

A final but more rare type of ad fraud is conversion fraud, which occurs when what appears to be a genuine business lead is actually generated by a machine.

So, if these types of fraud are recognised and understood, why aren’t they stopped?

Unfortunately these fraudulent activities are almost always registered as legitimate by fraud prevention systems, so advertisers are paying for ads that may never have been seen by humans. This diminishes any chance of their ad resulting in conversion or revenue. With the industry perpetuating the problem by recognising that the ad is valid, fraud prevention systems are clearly not working and more needs to be done.

With these points in mind, what are the current solutions to the problem?

Ad fraud can be overcome, but it is a slow and lengthy process that is still in its infancy. There are organisations actively seeking and rectifying the problems caused by online ad fraud including Spider.io, White Ops and Integral Ad Science, who are using bot detection algorithms designed to detect and stop suspicious traffic.

In addition, many of the major search engines use filters designed to identify suspect behaviour and recognise fraudulent activities such as flagging numerous clicks with the same IP address. Work is also underway to distinguish an industry-wide understanding of what counts to be a legitimate viewable impression by companies such as Nielsen, while the IAB has recently released new viewability standards.

As encouraging as it is that many companies are actively seeking ways to overcome the bot takeover online, ad fraud still remains a serious and ongoing problem. As advertisers get wiser to fraudulent use, fraudsters will only find more sophisticated ways of committing ad fraud in the future.

So is there an alternative to overcome ad fraud?

The only solution to defeat online ad fraud once and for all may be to alter the way we measure advertising campaigns. Many campaigns are still using metrics such as CPM and CPC to gauge effectiveness, which are exceptionally susceptible to online advertising fraud through bot mimicking.

The other logical and bot resistant measurement for advertising campaigns is to compare revenue produced. Although bots are becoming increasingly sophisticated and can mimic many human activities and behaviours, they cannot mimic an actual conversion or increase in revenue.

Measurement of revenue also produces clear and comprehensive evaluations on whether advertising campaigns are successful. Marketers need to recognise the benefits of this down-funnel metric and understand that by measuring revenue, they are benefiting from a bot-proof understanding of consumer engagement and advertising effectiveness.

Unfortunately in a digital age where bots have overtaken human traffic, ad fraud has become a common and costly issue. But online ad fraud will be defeated and humans can win if advertisers and marketers measure what matters to their businesses’ bottom line, and take action accordingly.