Massive Web Traffic Fraud: Digital Advertising Confronts “Crisis”

Digital media, and specifically display advertising, is facing a “crisis” even as brand marketers are increasingly serious about shifting budgets online and into mobile. That phrase, “crisis,” comes directly from the chair of the IAB, Vivek Shah, as quoted in the Wall Street Journal.

The WSJ article cites IAB estimates that suggest more than a third of all online traffic is fake or fraudulent:

About 36 percent of all Web traffic is considered fake, the product of computers hijacked by viruses and programmed to visit sites, according to estimates cited recently by the Interactive Advertising Bureau trade group.

Nearly 30 percent of all US advertising is now digital and, increasingly, it’s bought through automated platforms and systems. Even as its popularity is growing rapidly, automated or programmatic ad buying is a contributor to the problems identified in the article: lack of transparency and accountability being chief among them.

Others in the past have estimated that a substantial amount of web traffic is “suspicious.” Solve Media argues the number may be more than 40 percent. Earlier, a comScore study found 31 percent of display ads are never seen by their intended audiences.

The latter comScore data don’t represent fraud per se. However they reflect instances when ads aren’t seen by their intended audiences for one reason or another — amounting to the same outcome essentially.

All of these problems cast a shadow over online and mobile advertising and automated ad buying in particular. Yet, as the WSJ article points out, heavy consumer usage of the internet means that marketers cannot avoid shifting budgets to where their audiences are.

New metrics such as “viewability” are being implemented to restore confidence in display. In addition more third parties are getting involved as auditors or to root out fraud where it may be happening. Advertisers themselves are increasingly demanding reimbursements and “make goods” where fraud is detected. As the WSJ reports:

Advertisers hope that demanding make-good ads will pressure ad exchanges and ad networks to ensure that their inventories are properly vetted.

Marketers also keep lists of sites that have fraudulent traffic and ask that when the free ads are given, they be placed on high-quality sites, which have low rates of fraud.

Clearly it’s in all parties’ interests — marketers, agencies, publishers, exchanges — to work together to strengthen and fortify the integrity of the system.