Is ad fraud coming under control?

Over time online advertising reputation for transparency has been sullied. Marketers are now demanding greater clarity. A conversation on who is winning - the good guys or the bad.

When it comes to online ad frauds, the questions just keep coming. What is ad fraud? What are bots? How rampant is ad fraud? What is invalid traffic? Is there any protection at all?

Simply put, an ad fraud is a scam in which the 'bad guy' fools the good guys (advertisers) into paying for something that is actually worthless to the latter. In the process, another good guy (the publisher) ends up losing money that should have come to them. How serious is the situation today? The Digipub (held on September 20-21) panel on ad fraud was a fair representation of interested parties.

On stage were a publisher, an agency head and two advertisers. Anand Chakravarthy, managing director, Essence; Nitin Sethi, vice president (digital), Indigo Airlines; Shubhodip Pal, chief marketing & commercial officer, Micromax Informatics and Jaya Suri, vice president, revenue, Times Network Digital made up the panel while Vanita Kohli Khandekar of Business Standard was the moderator.

The panelists (from left) Anand Chakravarthy, Nitin Sethi, Jaya Suri, Shubhodip Pal with moderator with Vanita Kohli Khandekar at Digipub World
Click on the image to enlarge

Chakravarthy set the ball rolling in response to Kohli-Khandekar's question about bad the situation was. According to Chakravarthy, "any action on digital - whether it is a click or a view which is not generated because of human intervention by a script, a bot or a spider - is ad fraud. At last estimate, $14 billion of the $83 billion spend on digital globally were generated from fraudulent ads. Some estimates today suggest that ad fraud today is a bigger industry than drug trafficking. It is pretty scary and we have to take cognisance of it." Looking at an India-specific situation, that task may be a little easier as ad frauds in India are 'nascent', as Pal put it.

Ad fraud, from a consumer's perspective, means that he does not find the value he had been seeking when he first clicked on a particular product or service. "Any mismatch or any ambiguity in the consumer getting a seamless experience is ad fraud," said Sethi. That is the conversion-buster. From a brand perspective, it is fake traffic. It is not a very targeted consumer which comes to your platform and it does not result in a transaction."

Suri offered a publisher's perspective. "The way we see it, this is misrepresentation when non-human traffic mimicks my content and steals users from my content site by serving ads to them. It puts our credibility on the line in a big way and has to be combated very seriously," she pointed out. Pal looks at it from the point of view of the market in which the brand (in his case, Micromax) plays. "Russia is one of the biggest markets where I am facing what Anand just said. You have little mafia bots sitting there taking away ads," he said. And how does Micromax deal with it? "There are two ways of dealing with this," says Pal, adding, "move with the winds of change or develop a methodology that controls these fraudulent data. From an advertiser's point of view, it leaves that big question mark of authenticity, and of return on investments. If you look at the global arena, that is when the big signals start coming up."

There is a variety of ad frauds that is taking away genuine business. Click fraud is one of the most common types wherein fake traffic is generated through automated clicking programs called hit bots or where large numbers of low-wage earners - or farmers - in a click farm create fake traffic.

Search ad frauds occur when the fraudsters create websites and use keywords to artificially improve their position on a search engine results page. Advertisers for whom those keywords are relevant then buy ads on the fake websites, where they have little chance of being seen. Another form is ad stacking. There will be multiple ads that generate impressions when people view the page, but the ads are stacked so that only the top one is visible.

In domain spoofing, the fraudster misrepresents the domain where an ad is to be placed as that of a legitimate and high-profile website. Then there is pixel stuffing. Ads are placed within pixels on a page. Since they are on the page, an impression is registered when anyone visits it but because they are invisible, no potential customer actually sees them. Pal explained how Micromax had been affected by this.

He pointed out that there are solutions like Oracle Moat to counter ad fraud. But these are expensive. "In future, if I have half a million dollars to spend I may experiment," said Pal. Ad fraud is something that one has to continuously track. It is not a one-off thing. "Your digital programme needs tools in the background," said Chakravarthy. According to him simple ad frauds can be fought with a solution like DoubleClick but for sophisticated ad frauds, one needs DoubleClick as well as tools like Moat Analytics. "The first thing about fraud is that you have to know that you are buying fraudulent impressions. If you don't invest in tech and don't invest in ad serving, you won't know that you are buying fraudulent impressions. Anyone who is running a campaign is susceptible to ad fraud. One of the biggest barriers in India is that most advertisers don't want to invest in ad serving," explained Chakravarthy.

Sethi believes that it is the brand's responsibility to fight off ad fraud. A big, popular brand will always have smaller players who try to come in and defame it. He has a couple of examples with respect to what Indigo has had to face. "There was a campaign run by a small player, on social media, that the visitor will get a job in Indigo. So, we had to run a campaign called 'Jobs not for Sale'. Similarly, there was a campaign that promised free couple tickets for Colombo on Indigo. As a brand, it was our responsibility to go and say that we do not own this particular URL - because the consumer was getting cheated. We were getting high volumes at our call centres asking: 'Where is my ticket?' We had to go on social and spend money to control the damage."

Suri said that Times Digital works with many DSPs. "As a community," she explained, "since publishers are primarily content creators and not so much tech companies, we rely a lot on tech companies to try and figure out a solution which could be used by both. But I think adoption has to be quick. There is also going to be a certain amount of transparency that is going to come into the process, which publishers are a little scared of. But adoption is needed to prevent money being stolen from right under our noses."

With Indigo's customers in Tier 2 and Tier 3 increasing, it is very selective in its advertising. He cites an example: "Say there is a specific offer at '999. Now, rather than pushing him to a home page (because he may never be able to find that offer), we take him to an offer detail page where the terms and conditions are laid out, the sectors for which the offer is available are listed and then continue the journey. It may be a classic example of an e-commerce conversion journey but for a service platform business like ours it is a must," he explained.

The audience had queries too. "What percentage of your budget would you be comfortable in spending to detecting ad fraud?" asked one, addressing Sethi and Pal. "When it comes to Russia where my digital spends are almost 45 per cent of my budget, I wouldn't mind investing in detecting ad fraud. When it comes to India where my digital spend is not even 14 per cent of the total budget I may not. By the time the festival season comes around this year, we are going to invest in tracking digital spends."

Sethi admitted that it was a tricky question. "As we expand, we definitely have to invest more. In terms of percentage we have hardly spent because we have never faced a big issue in the Indian market. It is, as of now, 1-2 per cent but when we expand internationally it will go up."

As an agency, how does Chakravarthy see his clients spending? "There are two kinds of clients. The first is the sophisticated sort who spend a lot on digital. It makes sense for them to invest in ad tracking. At the other end, are those who are starting the digital journey. For them, their budgets don't allow huge spends. However, once you reach a digital threshold of spends, ad serving becomes important as you calculate your real ROI. But the reality is that without ad serving you never know."

Are the segments within ad fraud (the $14 billion mentioned earlier) changing and is ad fraud under control? Or is the black hole that is online advertising fraud only getting bigger?

"General invalid traffic (the original form of ad fraud) is moving to sophisticated invalid traffic. That is the part what is actually growing because that involves hackers who are writing scripts, that involves creating false websites, creating fake apps. As tech grows and more and more people see opportunity in making money on the side. Are there more tools and measure to control? Yes, there are. It is going to be a constant battle because a $14 billion industry is not just going to fold up. It is like piracy. There are enough of smart, crooked minds who will come up with fraudulent stuff," said Chakravarthy.

The onus rests on the entire ecosystem (publishers, agencies and advertisers) to work on solutions to recognise and address it. Google's director of product management said at an event - held to explore the state and future of ad fraud - last month in its offices in New York, "Ad fraud is everyone's problem. We have to work on this together."

That involves investing more money to battle the bots, as it were. Isn't that a pressure point for the parties concerned, especially marketers?

According to Sethi, it is an iterative process. "You have to try and experiment. Brands do have 10-15 per cent of the budgets to experiment. And, of course, somewhere you will have burnt your fingers. You have to come back and analyse data and improvise. You will be not able to choose all the right partners there will be somewhere you will have a bitter experience," he said.

Pal went on to add that it is not the marketer or agency's fault. "We have a huge audience. There are so many media vehicles, so many platforms, so many choices but budgets are limited. A mass brand like ours cannot ignore any medium. My strategy has to be structure in such a way that I address every medium and consumer, whether he is in posh Greater Kailash - II or in a locality like Khanpur, just five km away. That is where the marketer's problem arises. Am I spending right? Am I getting ROI," he explains. A marketer's dilemma is whether he should look at India or look at Bharat. Is the brand looking at 200-odd million people and ignoring the 900-odd million? "They are all your consumers at the end of the day. How do you effectively use each medium to reach the consumer? Heterogeneity of the market becomes an issue," said Pal.

Chakravarthy predicted that ad fraud will only grow. Therefore, marketers have to be alert. "The world will create more and more people setting up more websites and apps. The best way to learn is test and learn. Don't put in all your money into testing. Put in a sufficient amount. If you get results, valid clicks and valid leads, then you know you can scale up expenses."

That, probably, is the most sensible way to look at fighting online ad fraud.

Digipub World 2018 was partnered by - Timesnownews.com (platinum partner); Akamai and Facebook (silver partners); and Freshworks, Vidooly, comScore, Quintype, Times Internet, and 24 Frames Digital (bronze partners).