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Procurement to Help Fight Ad Fraud

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Procurement can play a crucial role in fighting ad fraud; by helping marketers to move away from easily faked quantity metrics, to real business outcome metrics. And also removing misaligned incentives - like buying ultra low cost CPM inventory.

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Procurement to Help Fight Ad Fraud

  1. 1. Procurement Should STEP IN to Help Fight Ad Fraud January 2018 Augustine Fou, PhD. 212. 203 .7239
  2. 2. January 2018 / Page 1marketing.scienceconsulting group, inc. Five Things Procurement Can Do 1. DON’T buy low cost (CPMs) media – real human audiences are very scarce and good publishers have those visitors; extreme low cost CPMs can only come from fake sites and ad fraud; smaller quantity and higher quality (sites, ads) are better 2. Insist on reports, line item details – know where your ads ran (brand safety and compliance); if ad exchange won’t tell you, don’t buy 3. Use continuous fraud detection – bad guys will always have better tech; use fraud detection as a “smoke detector” and then dig deeper 4. Optimize media towards humans – increase spend on media sources that have high humans to get your ads in front of humans 5. Focus on business outcomes – any quantity metric, and even some quality metrics can be faked by bots; focus on media channels that produce real business outcomes
  3. 3. January 2018 / Page 2marketing.scienceconsulting group, inc. Review agency contracts 2016 Assoc. of National Advertisers Media Transparency Initiative: K2 Report Results of the study were delivered by K2 in a comprehensive report. Among the key findings: • Numerous non-transparent business practices, including cash rebates to media agencies, were found to be pervasive in the U.S. media ad buying ecosystem. • There were systemic elements to some of the non-transparent behavior. Specifically, senior executives across the agency ecosystem were aware of, and mandated, some non- transparent business practices. • There was evidence of non-transparent practices across a wide range of media, including digital, print, out-of-home, and television. “marketers prohibited from getting placement reports (where the ads ran)” “marketers could not review CPM prices paid by agency” Is agency acting as “principal” or “agent”?
  4. 4. January 2018 / Page 3marketing.scienceconsulting group, inc. Insist on reports, w/ line-item details Line item details Overall average 9.4% CTR “fraud hides easily in averages” “line item details reveal obvious fraud”
  5. 5. January 2018 / Page 4marketing.scienceconsulting group, inc. Insist on continuous fraud detection 102,231 sessions 0 sessions goal event – no change
  6. 6. January 2018 / Page 5marketing.scienceconsulting group, inc. Corroborate with analytics teams click on links load webpages tune bounce rate tune pages/visit “bad guys’ bots are advanced enough to fake most metrics”
  7. 7. January 2018 / Page 6marketing.scienceconsulting group, inc. Actively scrub bots/fraud in-flight Launch Week 3 onwardWeeks 1-2 Initial baseline measurement Measurement after first optimization After eliminating several “problematic” networks
  8. 8. January 2018 / Page 7marketing.scienceconsulting group, inc. Measure for humans, not just bots Lower quality paid sources mean higher cost per human acquired – like 11X the cost. Sources of different quality send widely different amounts of humans to landing pages.
  9. 9. January 2018 / Page 8marketing.scienceconsulting group, inc. Shift budget to real conversions Organic sources have more humans (dark blue) Conversion actions (calls) are well correlated to humans; bots don’t call
  10. 10. January 2018 / Page 9marketing.scienceconsulting group, inc. What is Ad Fraud?
  11. 11. January 2018 / Page 10marketing.scienceconsulting group, inc. What is digital ad fraud ? Ad Fraud = ad impressions caused by bots, not seen by humans Impressions (CPM) Fraud (includes mobile display, video ads) Search Clicks (CPC) Fraud (includes mobile search ads)
  12. 12. January 2018 / Page 11marketing.scienceconsulting group, inc. How bad guys commit ad fraud 1. set up FAKE SITES 2. buy FAKE TRAFFIC 3. sell FAKE ADS
  13. 13. January 2018 / Page 12marketing.scienceconsulting group, inc. Fake sites have no content, no humans Identical sites made by template Alphanumeric domains So they can sell ad “inventory” at low prices Source:
  14. 14. January 2018 / Page 13marketing.scienceconsulting group, inc. Beware mobile… MORE rampant fraud Bad apps load impressions in background, not in use Source: Forensiq Fake mobile devices install apps and interact w/ them Download and Install Launch and Interact “more money; less measurable”
  15. 15. “Let’s go fight some bad guys together!”
  16. 16. January 2018 / Page 15marketing.scienceconsulting group, inc. About the Author January 2018 Augustine Fou, PhD. 212. 203 .7239
  17. 17. January 2018 / Page 16marketing.scienceconsulting group, inc. Dr. Augustine Fou – Independent Ad Fraud Researcher 2013 2014 Published slide decks and posts: 2016 2015 2017
  18. 18. January 2018 / Page 17marketing.scienceconsulting group, inc. Harvard Business Review Excerpt: Hunting the Bots Fou, a prodigy who earned a Ph.D. from MIT at 23, belongs to the generation that witnessed the rise of digital marketers, having crafted his trade at American Express, one of the most successful American consumer brands, and at Omnicom, one of the largest global advertising agencies. Eventually stepping away from corporate life, Fou started his own practice, focusing on digital marketing fraud investigation. Fou’s experiment proved that fake traffic is unproductive traffic. The fake visitors inflated the traffic statistics but contributed nothing to conversions, which stayed steady even after the traffic plummeted (bottom chart). Fake traffic is generated by “bad-guy bots.” A bot is computer code that runs automated tasks.