Think You Are Immune to Ad Fraud? Think Again

On 06/09/2018 by Araceli Almada

Ad fraud is a major problem unsettling the digital advertising ecosystem. Imagine a scenario where a client wants to get on their audience’s radar by investing in online display advertising. Perhaps they hire an agency to identify relevant ad networks based on their target audience, or perhaps they pursue direct contact with publishers. Either way, budget is spent on buying inventory to promote a brand. What becomes troubling, however, is not knowing if ads are truly being served to the right audience - and therein lies the vulnerability of a digital world struggling with ad fraud. No matter who is at fault, ads are being largely served to bots rather than to legitimate users, and in that case, advertiser budget is spent to advertise to nobody. In fact, fraudulent activity is so widespread that $1 is lost to ad fraud for every $3 spent on a digital ad, according to the Interactive Advertising Bureau (IAB). Even more alarming is the projected cost of ad fraud, which is to exceed $50 billion by 2025.

When proactive measures aren’t taken to protect against such malicious behavior, ad fraud perpetrators won't stop making easy money, leaving behind consequences for both the buy and sell side to deal with. Advertisers are scrutinizing their budget ever more closely, trying to ensure their marketing dollars don’t fall into the wrong hands. The situation has become such a concern that distrust is now threatening the relationship between advertisers and publishers, and the future of digital advertising. On the sell side, publishers are having a harder time selling their inventory. In some cases, they are even blacklisted by advertisers for future campaigns due to instances of suspicious activity, perhaps to no fault of their own. Nevertheless, reputations are at a higher value than ever before as ad fraud plagues the industry, growing into one of the biggest and most profitable crime businesses in the world.

Nobody is Immune

While some may see ad fraud as a nuisance rather than a crisis, it is this very mentality that is costing billions of dollars for the digital ad industry, increasing the reputation risk of both publishers and advertisers.

Here is how. Bots generate fake pageviews, representing up to 50% of an ad’s impressions, according to AdExchanger. Fake clicks and installs can also be injected, fooling advertisers even more by misrepresenting the performance coming from what is actually traffic, and impacting their judgement to make decisions concerning ad investments. Rather than work with the ‘good guys’, advertisers fall victim by redirecting their dollars to those that have malicious intentions, blindly giving their money to the wrong people, and harming their brand image and safety in the process with little in return. Agencies also suffer a reputation risk despite trying to reach the advertiser’s chosen target audience, as they benefit unintentionally from ad fraud through fees and commissions. Publishers endure the greatest risk as they have the most to gain in the industry supply chain in terms of monetization. Reputable publishers are attractive to fraudsters, as bots can attract higher value in the payment for traffic by imitating the surfing habits of valuable target audiences. For publishers who are not able to differentiate bot and human traffic, they fall victim as the basic integrity of their product is questioned, jeopardizing their business as advertisers become more skeptical of their intentions and are less willing to continue the business relationship. The reality is that everyone across the digital ad ecosystem is susceptible to ad fraud, and something must be done to avoid annual economic loss as a result of it, which globally, is indicated to amount to over $16.4 billion in losses.

Everyone Has a Role in Cleaning Fraud

With that said, what are some pre-emptive measures that industry actors can take to best avoid this deadly cycle? Responsibility must be addressed by advertisers and publishers alike, and it starts by demanding greater transparency. As ad fraud is a crime that works only by avoiding detection, advertisers should demand transparency in publisher inventory and traffic sources, and identify third-party source activity through the use of cutting-edge technology. In doing so, there should be a greater focus on actual business KPIs like engagement and conversion metrics. Publishers, on the other hand, should protect themselves from ad injection by using bot detection and domain detection software in order to mitigate the risk of bot traffic. In addition, third-party monitoring and assessment tools should be pursued to prove the quality of a publisher’s traffic and certify the advertiser’s confidence in them. Advertisers should, therefore, select partners who proactively reduce fraud in order to be more certain that their content will be displayed in a brand safe environment. On both ends of the spectrum, industry actors must be vigilant and stand strong in their demand for quality human traffic if they are to have a reputable and sustainable future.

Forensiq Partners with Ligatus

Having quality traffic is a result of good habits. It is why trust is so important to provide reassurance to advertisers that they are getting their money’s worth. And in doing so, it is where technology yet again has a role to play in maintaining trust between buyer and seller. Given that ad fraud is at its highest point ever, serious efforts must be made to regain confidence between buyer and seller so that advertisers continue to use and fund the digital ecosystem. To meet this goal and leverage quality traffic, Ligatus partnered with Forensiq in February of this year.

Forensiq, acquired by Impact Radius in 2016, is a leader in ad fraud detection that uses innovative machine-learning and advanced detection methods to identify bad actors and malicious activity. With Forensiq’s help, advertisers and publishers, as part of the Ligatus network, will continue to have a reliable platform to drive higher quality traffic, keep inventory in a brand safe environment, and access the most transparent reporting. Forensiq also has a proven track record, meeting the rigorous anti-fraud and anti-piracy requirements as the recipient of the Trustworthy Accountability Group’s (TAG) “Certified Against Piracy” and “Certified Against Fraud” seals.

In partnering with Forensiq, Ligatus has upheld its credibility in providing advertisers and publishers with the transparent and safe market they desire. We want to take away the critical challenges that publishers encounter, and help create a better advertising experience for everyone involved. By providing our solution with Forensiq’s detection software, all partners avoid unauthorized impressions as we do our part in the fight against ad fraud and build up our clients’ credibility.

Protecting your Reputation with Ligatus

While it is impossible to completely eliminate ad fraud at once, it is the industry’s duty to create an environment that is conducive to fraud awareness and prevention through anti-fraud initiatives. We believe that aggressive steps are necessary to continually improve controls for more positive results, and are therefore applying pressure to stay ahead of fraudsters by attacking the issue as a top priority that advertisers, agencies, publishers and tech companies can remedy together. While there is always more to accomplish, our partnership with Forensiq further highlights our commitment to develop a digital media ecosystem that is worthy of trust and transparency so that it is primed for greater investment.

If you are a publisher who wants to better monetize your site and provide buyers with a fraud-free buying environment, or an advertiser who wants to protect your investment with an offering of the highest quality through the help of deserving publishers, contact us today to reap the rewards of our network and remain free of fraudulent traffic.