In my last article, Problematic Programmatic Media Buying, I highlighted eMarketer's estimate that 63% of total digital display advertising is projected to be purchased using programmatic media buying platforms and that Ad Fraud is one of the top issues associated with these programmatic buys.
I decided to dig a little deeper and tapped Rich Kahn, CEO of eZanga.com, to explain what he's done to combat ad fraud, better understand why ad fraud matters and even, at least for some entrepreneurs, why ad fraud may not matter as much as we might think.
Rich Kahn on Ad Fraud
As a fellow entrepreneur, I was first intrigued that Rich Kahn has been in digital marketing since 1993 (a full year longer than when I started) which means that Rich has watched the evolution of digital media buying and the impact that click fraud has had on campaign effectiveness. "Click fraud comes in many different forms," says Rich Kahn. "A new threat that we found appears to be coming from a new kind of software carefully hidden within browser plug-ins. The software can do everything including click fraud, injecting scripts on websites that the user visits, and just about anything the developers can dream up. We all like to customize and add new features to our most used apps on our machines, but be careful what you install, as it could be stealing from you and the websites you visit."
And this is one of the reasons that ad fraud is so prevalent. "These new threats are done in such a way, that a typical user does not know they have this software," explained Rich Kahn. And this is what a really great virus needs--an unsuspecting host that's helping it spread far and wide across the web.
Why Ad Fraud Matters
With eMarketer's estimate that 63% of total digital display advertising is projected to be purchased using programmatic media buying, how do companies fight back against Ad Fraud? Ideally, through transparency. The more you know where your ads are running, the more likely you are to be able to notice suspicious activities. But most programmatic ad networks today are not transparent (meaning that they don't provide you all the details they have access to). But even if they did, that doesn't mean you'd immediately recognize the fraud. "Back in October 2014", continued Rich Kahn, "we found a few servers that were compromised with bot software and are currently being used in botnets. Some of them are surprising: government agencies, colleges, and local small businesses were among them."
As many infected servers are not malicious hackers, but rather innocent bystanders, you can see where separating the "clean" website traffic with the "fraudulent" traffic might not be as easy as you originally thought.
Why Ad Fraud Doesn't Matter
So, I asked Rich Kahn, point blank, "So what do entrepreneurs with limited time and limited budgets do to combat ad fraud?" His answer was simple, "Test out a couple of ad networks and measure what really matters: conversion rates."
And that's when it struck me. While ad fraud is most certainly a problem for everyone, it's impact on your individual business only matters insomuch as it's pushing down your own company's conversion rate. The ad networks which are fighting ad fraud on your behalf will ultimately prove their efforts to your satisfaction in the form of increased effectiveness. Rather than focusing on the negative impact that ad fraud is having throughout the entire digital marketing industry, in this case it may actually pay to be a bit more selfish and "mind your own business." That is, if you instead obsess on your individual digital marketing success, then the ad networks with the least amount of fraud will continue to out-perform the ones with more of it.
And this is precisely what Rich Kahn has done. "Our click fraud protection platform, Traffic Advisors, has rule systems to identify servers, based on their behavior. If anything looks suspicious, we'll block all traffic from them, put them on our private "Watch List," and monitor them closely. If they clean up their act, we'll let them through to our network. However, if a single bad click attempts to come through, we immediately block it and put it back on our Watch List."
As more individual ad networks increase their own effectiveness, ad fraud will begin to police itself. In the meantime, you should focus on measuring what matters: conversions over "eyeballs."
Still want more on this topic? You can listen to the entire interview via our podcast.