Recently, I read an article written by the anti-fraud consultant, Dr. Augustine Fou that brought into focus a concern that I have with the current world of digital advertising and the increasing level of ad fraud. Not only does ad fraud cause businesses to spend their ad dollars on fake websites and clicks, but it also pollutes a company’s attribution models because it is based on bad data, which makes it even more difficult to target future ad spend.
Let’s face it, I have never been a big fan of advertising even in the days before digital marketing. Back then, this was based on not being able to measure my Return on Investment for my ad spend.
When I was an Invisible Fencing dealer in the 1980s, I recall the parent company telling me that to be successful, I had to advertise in the local newspaper every day. After months of pouring money into local newspaper ads, I was unable to attribute any of my sales directly to these ads. The ads that were converting were not the ones from my local newspaper but the national ads taken out by the parent company in specialty magazines like Dog Fancy. It felt like advertising in a local newspaper with no audience segmentation or on local TV was a black hole for my ad spend. While targeted ads in magazines like Dog Fancy were converting, ads from sources with large but undifferentiated audiences were not. My advertising experience as an Invisible Fencing dealer shaped my views of advertising for years to come even after Invisible Fencing and I parted ways.
Digital marketing was presented as the panacea to all my targeting problems and seemed like a better solution. But as digital marketing got more sophisticated, it developed loopholes and became ripe for ad fraud. While there are thousands of articles on digital marketing, and in fact, I have written a few digital marketing articles myself, the dark side of ad fraud is rarely discussed. Each year, ad fraud is getting worse because is it intentionally overlooked by the industry as it helps them sell more ads, which is the subject of this post.
At the genesis of the digital age, digital ads solved the long-standing problem of better targeting for small businesses. The promise that ads could be delivered to the ideal customer was an attractive alternative, especially to small business owners that could not afford to buy ads in national newspapers and magazines, prime time TV commercials, or radio spots like big advertisers could.
Moreover, omnichannel marketing offered the prospect of targeting consumers across multiple channels including mobile, video, and desktop. Add to that the ability to tailor the content within the context of how consumers interact with the brand such as a consumer seeing the brand for the first-time vs a consumer who had engaged with the brand previously, were attractive alternatives to direct negotiations with physical publishers.
But over time, as technology advanced, the digital ad space has been exploited by bad actors. The same technology used to better target consumers has been used to defraud ad buyers out of an ever-increasing percentage of their ad dollars. Here is what happened.
In the old days…
