This line from the keynote address of Ziff Davis CEO Vivek Shah at the Interactive Advertising Bureau‘s annual leadership conference this week is quite telling: “We have taken a perfect product and, by our own actions, made it imperfect.”
He’s talking about online advertising, and he says there’s a lot of work to do.
The “perfect product” he speaks of: According to the International Telecommunications Union, more than 75 percent of people in the developed world have access to the internet. Thanks to online ads, advertisers have access to all of those people. But because of that access, there are some more than willing to break the rules.
Shah highlighted what he calls the biggest threat to today’s online advertising business — fraud.
It could be argued that fraud would be considered a major threat to any business, but Shah says the ease with which this fraud is carried out is why it is so threatening and why it needs to be immediately addressed.
“Let’s start with traffic fraud; we have reached crisis proportions,” Shah said. “According to comScore, 36 percent of traffic today is generated by machines, not humans. That’s astonishing. If you peel the onion one layer, you see that an overwhelming majority of suspected non-human traffic comes from small publishers — not comScore 100 sites. The reason is simple. The ability to buy cheap bot traffic and arbitrage it via ad exchanges has created enormous financial incentive for bad-acters to engage in a deception that threatens the very integrity of our business.”
Essentially, when publishers enter into pay-per-click agreements with vendors who promise to deliver traffic at low rates, those pageviews are too often being generated by bots — not actual people.
“This is the simplest form of generating fraudulent traffic and impressions, but it can get much more sophisticated than that,” Shah said.
He also pointed out other techniques such as invisible traffic and ad stacking, continuing that often those fraudulent actions go beyond just drumming up false ad impressions but can also include fake clicks as well.
“The accelerant to all of these behaviors is the arbitrage opportunity that’s been enabled by the advent of exchanges,” Shah said. “This fraudulent traffic is easily monetized in a system that focuses less on traffic sources and more on ad performance. Don’t get me wrong, the introductions of exchanges and programmatic advertising are tremendous breakthroughs in our business. But we also have a responsibility to deal with the unintended consequences. We’re supposed to be the most transparent, open, addressable and accountable medium in the world. We’re too good for this.”
Shah issued challenges to those on all sides of online advertising:
“If you’re an established publisher and you’re blissfully unaware of all your traffic sources, then I ask you … to sit down with your team to ensure that you’re not buying suspect traffic. There’s nothing more detrimental to our business than having an established publisher implicated in this mess.”
“To buyers — this includes agencies, trading desks, re-targeters and buying platforms — I would say many of you are willing to be defrauded. It’s a dirty secret you’re willing to keep because the performance looks great on paper. You don’t want your clients to throw the good out with the bad. I get that, but it’s not right. It will only cause long-term damage to trust and confidence in the medium.
“To the exchanges that play host to the inventory, I’d recommend that you establish listing standards. Just as the New York Stock Exchange has minimum listing standards for companies to sell shares, so should our exchanges. Not every publisher should be allowed to sell their inventory unless we can verify the quality and nature of their traffic.”
Essentially, Shah says it is the responsibility of all involved to monitor for fraudulent traffic, as we seek to protect the integrity of the industry.