Ad fraud is a significant thorn in the side of digital walled gardens. Compounded by their lack of transparency, the risks extend far beyond missed customer engagement. These issues can lead to Over 80% of marketers say that brand safety is a major concern for their organization, but are they all really practicing what they preach when it comes to being a force for good within their industry and society at large?

The Stark Differences Between Consumers and Marketers When It Comes to Fraud 

One out of three consumers are very concerned about their online security due to the high risk of fraud involving identity theft, credit card information being stolen, sensitive data breaches or phishing email scams. 

However, only 13% of marketers are very concerned about online advertising fraud, according to a recent survey commissioned by VAB and conducted by Advertiser Perceptions, even though Juniper Research has estimated that the global advertising spend lost to digital fraud is $84 billion annually, or 22% of total global digital ad spend.

Just how much is $84 billion dollars? It’s greater than the combined revenues for twelve of the most popular sports leagues in the world (a list that includes NFL, NBA, MLB, NHL, MLS, Premier League, La Liga, Indian Premier League among others). The North American cost of digital ad fraud alone ($35 billion) is the equivalent of the total annual U.S. investment in national & local cable TV advertising. In short, digital ad fraud is big business. 

Much like the average person is aware of what constitutes online consumer fraud, marketers know that online ad fraud equates to ‘theft’ of some kind – such as bots faking traffic and falsifying views, misrepresentation of ad placements, metric manipulation like inflated view counts, phishing scams, adjacencies to objectionable content and other fraudulent activity. 

Why are marketers, as industry professionals, much less concerned about online ad fraud when investing their company’s advertising dollars compared to their personal concerns as consumers, who are almost three times more likely to be deeply worried about the effects of online fraud?

Five Inconvenient Truths We Learned from Marketers

To understand this disparity, VAB uncovered five inconvenient truths around ad fraud, transparency and brand safety based on our interviews and surveys with marketers:

1. There is a lack of culpability throughout the advertising industry which means no single party is willing to assume responsibility for addressing ad fraud 
2. Marketers are faced with persistent ad fraud with little recourse or power to address it 
3. Many marketers are prioritizing low costs in campaigns, which means that quality and brand safety are put at extreme risk 
4. A lack of transparency among media partners, and throughout the digital advertising supply chain, prevents marketers from understanding and identifying where the many risks of ad fraud exist 
5. Marketers are unaware that digital ad dollars are being inadvertently funneled to ‘bad actors’

You can read through our full custom study, Exposed, to get in-depth learnings across all five inconvenient truths, but I want to specifically put the fifth truth into greater focus here since it’s the one with the most serious of consequences globally.

The Global Consequences of Ad Fraud

While it’s true that online ad fraud involves ‘theft’ of some kind, the issue goes well beyond just the advertising industry. Where do you think dollars from digital ad fraud are being funneled to? Hint: It’s not your local Boys and Girls Club or the Shriners Hospitals for Children. 

There have been many instances over the years of brands’ legitimate digital ad dollars being stolen through fraudulent schemes orchestrated by organized crime, drug cartels, extremist groups and U.S.-sanctioned nations like Russia, North Korea and Iran. These dollars were no doubt used to fund illegitimate activities from trafficking (both drugs and humans) to terrorism and many other nefarious acts in-between. 

During the in-depth interviews we conducted as part of our survey, none of the marketers’ expressed concerns about the possibility that their advertising dollars might inadvertently be going to support illegal activities, extremist groups or oppressive regimes. 

This finding was particularly noteworthy given that the interviews were conducted after the release of several Adalytics reports last year which highlighted the financial, reputational and legal risks advertisers can face when engaging with ‘Big Tech’ walled gardens and the digital supply chain. 

Due to this lack of knowledge, most marketers don’t even do the bare minimum to protect their digital campaigns, according to our study only:

• 39% are closely monitoring campaigns for increased activity which may be due to bots 
• 39% maintain a whitelist of trusted sites 
• 32% are partnering with ‘3rd Party’ ad verification vendors / fraud detection vendors 
• 32% are using only direct premium publisher relationships 
• 29% are establishing clear brand safety guidelines and ensuring all their partners adhere to them

Ad fraud is big business and a serious issue that requires serious solutions. Social responsibility means that marketers should treat their company’s advertiser dollars as their advertiser dollars, and they need to be aware of the real consequences that are involved in how and where these dollars are invested. 

How Can Marketers Really Be a Force for Good? 

Marketers can move the industry forward and enact real change by demanding transparency across all their media & verification partners through these four simple steps: 

1. Know precisely where your ad campaign is running and exactly who is exposed to your impressions (human vs. non-human as well) 
2. Stop considering ad placements that lack a fully transparent ad process 
3. Insist on campaign transparency from all your media partners 
4. Trust high-quality, brand-safe, fully transparent media platforms with truly independent third-party verification 

Advertising in transparent, brand-safe environments drives vastly superior conversion rates and business results, therefore being a real force for good also means being a real force for growth in your organization.

Originally published on Martech360

Jason Wiese

SVP, Director of Strategic Insights at VAB