Gino Sesto is the founder of DASH TWO and Wild Posting®, which specializes in street-level advertising.
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Media buying is currently plagued by challenges that impact its proficiency and success. Fraud is a predominant issue, with bots and dishonest activities leading to advertisers losing substantial amounts of money. In my 25 years spent in the media buying sector, I've seen ad fraud grow from small beginnings to the mammoth problem it is today.
Gauging The Growing Problem
In 2006, pay-per-click was already big business, and so were bogus clicks on the ads. In three experimental PPC campaigns, it was found that as much as 29.5% of clicks were fraudulent.
Since then, ad fraud has become noticeably more sophisticated and harder to detect across different digital ad platforms. According to Juniper Research, advertisers lost $84 billion in ad spending to fraud in 2023, and this number is expected to rise to $172 billion by 2028.
A real-world example of ad fraud is the "Methbot" scam. A botnet created by a group of Russian hackers, Methbot was used to defraud advertisers and publishers of up to $5 million daily in 2016. The operation involved creating fake websites and using automated bots to mimic human behavior, generating billions of fake ad views and clicks. The Methbot operation highlighted the vulnerability of the digital advertising ecosystem to sophisticated ad fraud schemes.
Lack of transparency in media buying is another significant hurdle for advertisers. The media buying ecosystem is difficult to navigate, making it challenging for advertisers to gain clear insights into the performance of their ads and the allocation of their budgets. Several platforms exist where we have to accept that we won’t receive any transparency on the placements or where the targeting data came from. These challenges have helped diminish the market's overall trust in online advertising platforms.
Providing Potential Solutions
Advertisers can address many of these challenges through modern technology. At my agency, we employ tracking links using third-party ad servers to help ensure we are serving the correct number of impressions we are contracted for. In addition, we set up all of our ad accounts for two-factor authentication, and some accounts require codes that change every 30 seconds.
Here are some other potential solutions for companies:
• Advanced fraud detection technologies: Companies can significantly reduce the risk of ad fraud by using updated detection and prevention software. These programs employ machine learning and data analysis to identify and block suspicious activities. By analyzing patterns and detecting anomalies in traffic, clicks or impressions, you can prevent ad fraud before it impacts your campaigns.
• Verification and viewability metrics: Third-party verification services can help you ensure ads are seen by real people and in the correct environment. Such services corroborate the placement and viewability of ads, providing an extra level of transparency.
• Publisher vetting and direct partnerships: Establishing direct relationships with publishers or working with a hand-picked group of trusted partners can reduce exposure to ad fraud. By carefully vetting publishers and favoring those with a transparent and clean track record, you can ensure your ads are placed on legitimate sites. Direct partnerships also allow better negotiation of placements and prices, as well as more transparent reporting and data sharing.
• Blockchain integration with media buying: Blockchain has the potential to enhance transparency, reduce fraud and improve the operational efficiencies of media buying platforms. As a decentralized and secure ledger, blockchain acts like a record book everyone can view, ensuring all transactions are open and easy to verify. It can enable advertisers to track information related to advertising activity and ensure ads reach the intended audience. Additionally, blockchain drives secure and transparent data sharing among parties, fostering an environment of trust and enhancing the reliability of the process. Future blockchain applications in media buying could include creating decentralized ad exchanges that would enable direct interactions between advertisers and publishers, reducing the need for intermediaries and potentially lowering costs.
Reinvigorating Media Buying
As long as businesses have products and services to sell, advertising will be necessary. As technology advances over time, media buying will morph and so will the ways to abuse it. The only way to protect companies from becoming victims of ad fraud is to remain abreast of developments. Let's use the advancements available to us to keep pace with the fraudsters and generate the best results possible.
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