Digital Ad Fraud Down: What Does That Really Mean?
Two industry developments this week caught my eye this week. One gives me hope, and one is cause for despair, even though it was reported as a win.
To start with the latter (I am a “bad news first” guy): according to the Association of National Advertisers (ANA), losses due to bot fraud are down globally.
Mediapost’s Steve McClellan writes: “Economic losses due to bot fraud are projected to reach $5.8 billion globally this year, but for the first time more fraud will be stopped than will succeed, according to a new study from cybersecurity firm White Ops and ANA. By comparison, the losses are an improvement over the $6.5 billion reported in a similar study by the two groups released in 2017.”
Yes, it is good news that we are down 11% on bot fraud. That is 11% of digital marketing budget that now actually stands a chance to reach consumers, as long as it adheres to the Internet Advertising Bureau standard for measurement.
In case you’re a little fuzzy on this metric, here is the definition: ‘‘A measurement of responses from an ad delivery system to an ad request from the user’s browser, which is filtered for invalid traffic and is recorded at a point as late as possible in the IAB Digital Video Impression Measurement Guidelines June 2018 process of delivery of the creative material to the user’s browser. The ad must be loaded and at minimum begin to render in order to count it as a valid ad impression.’’ Are you still there?
But let me ask you this: How many losses due to fraud does Coca-Cola accept from its glass or aluminum producers? How much fraud does Mastercard find acceptable from its customers? Or to bring it closer to home: How much fraud does any advertiser accept from TV, outdoor or radio?
Sure, any progress needs to be celebrated, but at the same time, this is a $700 million improvement on a $221 billion global digital ad market (2018 data).
The other news story that caught my eye this week fills me with hope. Mediapost’s Richard Whitman writes about a new initiative: “It’s called the Institute for Real Growth and it’s backed by a slew of top companies in advertising, media, education and recruitment. The mission: ‘helping organizations focus on sustained, long-term ‘real growth’ by equipping leaders with best practice approaches to strategy, structure, capability and leadership.’ ”
This initiative is addressing a real and vexing issue, which is the lack of growth hurting many major marketing-driven companies.
Last year the ANA’s Bob Liodice said that the Fortune 500, which he called “a reasonable surrogate for the entire business community — including small and large enterprises alike” had had declining after-tax profits for at least three years. That is of course not sustainable. It leads to shorter and shorter tenures of CMOs, it leads to cost cuts in the agency and advertising ecosystem, which in turn of course leads to buying cheap (resulting in ad fraud) and/or cost-driven agency pitches (can you say “marketing procurement”) which can have real consequences for brands (see Kraft Heinz).
So let’s not settle for an 11% improvement on digital ad fraud, when we are still very unclear on what digital advertising even contributes to the bottom line! To quote from “Galaxy Quest: the industry “must never give up, never surrender.”