Why Should You Care?
Digital ad fraud is the intentional act of preventing the correct delivery of digital ads to the intended audience, in the intended place. Digital advertising fraudsters silently steal dollars by siphoning impressions from advertising campaigns, which deprives humans of the opportunity to actually see ads online. If humans don’t see the ads, they can’t click on them to file a claim.
Over 40 years ago, in the Eisen v. Carlisle & Jacqueline, 417 U.S. 156, 174 (1974) case, the Supreme Court quoted its decision in the seminal notice case of Mullane v. Central Hanover Bank & Trust Co., 339 U.S 306, 315 (1950), and declared that in rule 23(b)(3) class actions, “notice must be ‘reasonably calculated under the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.’”
Today, part of this calculation needs to take into consideration safeguards to mitigate digital advertising fraud so that humans can be apprised of a pending matter.
Digital Ad Fraud Is a Massive Problem
Statista reports that digital fraud is a $65 billion problem worldwide. And, according to the World Federation of Advertisers, digital ad fraud is “second only to the drug trade as a source of income for organized crime.”1
So, What Is Digital Ad Fraud?
Fraudsters have developed a host of techniques to illegally profit from online advertising, including four main forms. Pixel stuffing is where ads are placed into invisible 1x1 or 0x0 pixel wide ad slots. These ads are imperceptible to the naked eye. Humans may not see these ads, but an impression counts once it’s been served—viewable or not. Ad stacking is another form of fraud similar to pixel stuffing, where up to 72 ads can be stacked one on top of the other behind one viewable ad. Ad stacking can be impression fraud or click fraud, as fraudsters can bill multiple advertisers for all impressions served or if the user clicks on the visible ad. Here, if a user clicks on the visible ad, a click is registered and billed for all ads in the stack. If an ad is called, viewable or not, the impression counts as served. Domain spoofing is where fraudsters declare to an exchange that their spoofed site is a premium publisher website. Finally, ad injections replace existing ads on sites with fraudulent ads.
And what about those bots? Bots are a type of code that fraudsters program to perform automated tasks such as generating pages or clicking on ads. Bots can appear to be humans, for example, a parent researching baby formula or an investor looking for stock market updates. The bots can perform complex tasks much faster than a human, which makes their activities scalable on a massive level.
How Does This Happen?
Part of the problem stems from the complex and opaque supply chains between advertising buyers and advertising sellers, where computerized, millisecond advertising transactions take place. This approach is called programmatic advertising, and it’s how the vast majority of digital advertising is now purchased across large ad exchanges like Google. This approach uses algorithms to serve digital ads to people who fit a given target audience. But are ads being serving to humans? Maybe not. Without active campaign management and ad fraud protection, ads will follow anyone or bots anywhere across the digital ecosystem. That’s why you need a notice provider that is transparent and uses multiple layers of ad fraud detection. You can and should know which sites are being used in a campaign, where your ads are being served and how many humans are potentially seeing your ads.
What Can You Do?
You can protect your notice program by asking your provider key questions: Where are my digital ads running? What is your digital ad fraud rate? How many layers of digital ad fraud protection are being employed? Not all detection technology is equal. Ongoing testing is critical. This is where it’s necessary to have human eyes actually looking at log-level data for campaign anomalies.
Improving your digital advertising effectiveness starts with transparency and a sound strategy to reduce the intermediaries and create the most direct, trusted, verified and efficient path to a publisher’s advertising inventory.
If you’d like to learn more about digital advertising fraud and what we are doing to protect our client notice programs, contact us today.