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Procurement to Help Reduce Ad Fraud

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Procurement can have HUGE impact by stepping in and helping to reduce fraud by following the 5 steps in the deck.

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Procurement to Help Reduce Ad Fraud

  1. 1. Procurement Should Step In to Help Reduce Ad Fraud April 2017 Augustine Fou, PhD. 212. 203 .7239
  2. 2. April 2017 / Page 1marketing.scienceconsulting group, inc. What is 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)
  3. 3. April 2017 / Page 2marketing.scienceconsulting group, inc. Advertisers’ budgets diverted to fake sites $40 billion Display Spend $21 FB+GOOG Display $11E CPM Fraud $8 100% bot traffic “fraud (cash out) sites” • No content • Stolen content • Fake content low CPMs higher CPMs “sites with real content that real humans want to read” Source: DCN/ WhiteOps 2015
  4. 4. April 2017 / Page 3marketing.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:
  5. 5. April 2017 / Page 4marketing.scienceconsulting group, inc. “sites that carry ads” There’s 15X more fake sites, than good Source: Verisign, Q4 2016 329M domains $83B digital Google Search FB+GOOG Display $29 billion “sites you’ve heard of” WSJ ESPN NYTimes Economist Reuters Elle top 1 million + next 10 million 159 million carry adsno ads 3% “Digital spend outside of Google/Facebook”
  6. 6. Fraud is successful …
  7. 7. April 2017 / Page 6marketing.scienceconsulting group, inc. Fake sites successfully sell ads… how? 100% viewability (fake) AD Stack ads all above the fold to trick detection 0% NHT (fake) Buy traffic that is guaranteed to pass fraud filters clean placement (fake) Pass fake source or forge fake placement details m/skin-care- products/OlayPro- X?utm_source=elle &utm_medium=dis play + + “by tricking measurement and reporting”
  8. 8. April 2017 / Page 7marketing.scienceconsulting group, inc. But only humans convert, bots don’t … Measure Ads Measure Arrivals Measure Conversions 346 1743 5 156 A B 30X more human conversion events • More arrivals • Better quality more humans (blue) good publishers low-cost media, ad exchanges
  9. 9. April 2017 / Page 8marketing.scienceconsulting group, inc. Case in point… Chase “JPMorgan had already decided last year to oversee its own programmatic buying operation. Advertisements for JPMorgan Chase were appearing on about 400,000 websites a month. [But] only 12,000, or 3 percent, led to activity beyond an impression. [Then, Chase] limited its display ads to about 5,000 websites. We haven’t seen any deterioration on our performance metrics,” Ms. Lemkau said.” “99% reduction in ‘reach’ … Same Results.” Source: NYTimes, March 29, 2017 (because it wasn’t real, human reach)
  10. 10. April 2017 / Page 9marketing.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”
  11. 11. What can procurement do?
  12. 12. April 2017 / Page 11marketing.scienceconsulting group, inc. Focus on real, human conversions Organic sources have more humans (dark blue) Conversion actions (calls) are well correlated to humans; bots don’t call
  13. 13. April 2017 / Page 12marketing.scienceconsulting group, inc. Measure for humans in all campaigns 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.
  14. 14. April 2017 / Page 13marketing.scienceconsulting group, inc. Actively reduce bots/fraud in-flight Launch Week 3 onwardWeeks 1-2 Initial baseline measurement Measurement after first optimization After eliminating several “problematic” networks
  15. 15. April 2017 / Page 14marketing.scienceconsulting group, inc. Verify analytics, look for anomalies click on links load webpages tune bounce rate tune pages/visit “bad guys’ bots are advanced enough to fake most metrics”
  16. 16. April 2017 / Page 15marketing.scienceconsulting group, inc. Insist on line-item details from vendors Line item details Overall average 9.4% CTR “fraud hides easily in averages” “line item details reveal obvious fraud”
  17. 17. Current Fraud Detection Can’t Catch it
  18. 18. April 2017 / Page 17marketing.scienceconsulting group, inc. Fraud bots are NOT on any list bad guys’ bots 2% and “on the wane” Source: GroupM, Feb 2017 bot list-matching 4% Source: IAB Australia, Mar 2017 400 bot names in list “not on any list” disguised as popular browsers – Internet Explorer; constantly adapting to avoid detection 10,000 bots observed in the wild
  19. 19. April 2017 / Page 18marketing.scienceconsulting group, inc. In-ad measurements could be entirely wrong Publisher Webpage Foreign Ad iFrames Cross-domain (XSS) security restrictions mean iframe cannot: • read content in parent frame • detect actions in parent frame • see where it is on the page (above- or below- fold) • detect characteristics of the parent page 1x1 pixel js ad tags ride along inside iframe incorrectly reported as 100% viewable
  20. 20. April 2017 / Page 19marketing.scienceconsulting group, inc. Methbot stayed hidden for years Source: Dec 2016 WhiteOps Discloses Methbot Research “Methbot, steals $2 billion annualized; and it avoided detection for years.” 1. Targeted video ad inventory $13 average CPM, 10X higher than display ads 2. Disguised as good publishers Pretending to be good publishers to cover tracks 3. Simulated human actions Actively faked clicks, mouse movements, page scrolling 4. Obfuscated data center origins Data center bots pretended to be from residential IP addresses
  21. 21. April 2017 / Page 20marketing.scienceconsulting group, inc. Fraud comes in LARGE numbers… Increased CPM prices by 800% Decreased impression volume by 92% Source: 260 billion 20 billion > $1.60 < 20 cents
  22. 22. “Having fraud DETECTION is not the same as having fraud PROTECTION.”
  23. 23. “Let’s go fight some bad guys together!”
  24. 24. April 2017 / Page 23marketing.scienceconsulting group, inc. About the Author April 2017 Augustine Fou, PhD. 212. 203 .7239
  25. 25. April 2017 / Page 24marketing.scienceconsulting group, inc. Dr. Augustine Fou – Independent Ad Fraud Researcher 2013 2014 Follow me on LinkedIn (click) and on Twitter @acfou (click) Further reading: 2016 2015
  26. 26. April 2017 / Page 25marketing.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.