It's estimated that fraud costs the UK economy £193bn a year, equating to more than £6,000 lost per second every day*, a lucrative way to make money.
The financial industry found itself heavily under attack over recent years and implemented very strong protections against fraud.
The fraudsters then turned to the ad industry, which was less protected, had higher pay-outs than credit cards and had newly automated processes with multiple points of exploitation. In a never ending and very expensive game of cat and mouse, fraudsters (or criminals as I like to call them) had found an even better and easier way to make money from online ad campaigns.
And it’s a constant challenge, because like a game of whack-a-mole, once a solution is found to one type of online ad fraud, a new one pops up.
There is a huge number of different types of online advertising fraud out there, from site traffic fraud, misrepresenting people or domains to bots, ad stacking, pixel stuffing, hi-jacking, domain spoofing, ad format misrepresentation and fake sites.
Each type of fraud is becoming more sophisticated and adapting as we adapt to prevent it. As programmatic technology for buying and selling of display ads has dramatically grown since 2012, with additional companies participating in the supply chain and direct trading relationships reduced, the opportunity for fraud has increased and fraudsters have targeted the weaknesses in the supply chain to benefit and profit from intentionally deceptive practices.
So how big is the challenge for advertisers in UK? Integral Ad Science’s Q1 2016 UK Media Quality Report found that the rate of fraud (impressions identified with suspicious or bot activity) was 5%. The IAS number annualised for 2016, across £3.7bn** UK display ad spend, equals to around £185m online ad fraud.
This ever-growing challenge to the industry is threefold, we need to:
1. Ensure that we are taking co-ordinated action to lock down opportunity to exploit known types of fraud
2. Remain alert
3. Prepare and plan ahead for next potential types of ad fraud
If you’re an advertiser and you want to avoid fraudulent activity across your online campaign then there are seven key actions you can take today:
1. Invest in machine learning and fraud detection technology
2. Look at organic traffic validation e.g. check to see if the number of visitors to the site looks accurate 3. Inspect for intent, content and legitimacy across all inventory
4. Reinforce quality publishers
5. Continuously and rigorously test new fraud detection technology
6. Support cross-industry partnerships e.g. Jicwebs.
7. Action enforcement and prosecution e.g. working with PIPCU
It doesn’t stop there. It is a constant battle and continual investment is needed in new resources, processes and tech.
Clients should only invest where online advertising has a real opportunity to be seen, by a real human, within the right target audience and in an appropriate editorial environment.
It’s important to note that online ad fraud is different from other industry issues such as brand safety (recently widely reported in The Times across Google and Facebook), anti-piracy, data protection and viewability among others.
Too many articles of late have mixed these topics together – and they should all be dealt with separately. Online ad fraud is a complex topic and in a few short paragraphs I can only scratch the surface, but it’s key to remember this is an on-going challenge, it’s experienced across all industries and as long as you are vigilant it can be avoided.
Nick Theakstone is the chief executive officer at Group M UK.
*The Annual Fraud Indicator 2016 has been overseen by the UK Fraud Costs Measurement Committee (UKFCMC), supported by Experian and PKF Littlejohn and is based on research by University of Portsmouth’s Centre for Counter Fraud Studies, Europe’s premier research centre concerning fraud.
**Source: IAB/PwC Digital AdSpend 2015/forecast for 2016.