Online advertising has a dark side, but IT can shed some light

There are many ways that online numbers can be inflated that have nothing to do with real people looking at actual ads or content

The marketing department’s new digital advertising program doubled traffic to the company website. Great news — except that there was no corresponding bump in sales revenue. Once that fact became clear, the CEO asked the CIO to get involved.

This all happened at a company I have worked with, but it’s not all that unusual. The truth is that there are many ways that online numbers can be inflated that have nothing to do with real people looking at actual ads or content. In this case, marketing had tried to generate more website traffic without IT’s advice. Now that the CEO has put the CIO on the case, Marketing may well learn that IT has some valuable insights into how digital marketing can be abused.

One thing that IT knows is that you can’t judge Web traffic until you have separated the bots from the human eyeballs. A 2015 White Ops study, “The Bot Baseline: Fraud in Digital Advertising,” revealed that an astounding 98% of the views for an auto manufacturer’s video ad could be attributed to bots. The Association of National Advertisers, working with White Ops, predicts that bots will cost digital advertisers $7.2 billion in 2016, up from $6.3 billion in 2015.

A lot of what happens in the world of online advertising amounts to outright fraud. Rapid growth and a flood of money have attracted scammers. Although there certainly are honest operators doing legitimate business, some of your company’s digital advertising budget is probably wasted. Common scams include the following:

Fraudulent traffic sourcing. Website traffic brokers add links to third-party websites that direct traffic to their customers’ sites. The traffic broker is paid based on the number of visitors that get redirected this way. Ethical brokers earn their money by persuading real people to follow a link that promises interesting content. That’s hard work, though, so unethical brokers simply deploy bots to visit customers’ sites. How do you know whether your broker is ethical? You should certainly do some research before signing a contract, but if your due diligence is spotty, you might not find out the truth until, like the company I described above, you realize that the new traffic isn’t generating any additional sales.

Virtual browser bots. This refers to malware that creates a virtual browser on the computer of some unsuspecting victim. It’s invisible to the computer’s owner, who remains unaware that his computer is silently visiting websites, clicking links and scrolling through pages, creating the impression that the computer owner is doing it all. These bots can be quite sophisticated, accurately mimicking the behavior of a person preparing for a car purchase or a grandparent searching for holiday gifts, for example — even pausing between clicks to simulate human reading time. Naturally, most traffic-measuring services will report a large audience until the bots are detected.

Pixel stuffing, ad stacking and tab-unders. With pixel stuffing, ads are stuffed into a 1-pixel-by-1-pixel unit, too small to be noticed by most people and indecipherable to those that do. The advantage for fraudsters is that they can fit a lot of pixel-stuffed ads on a single screen or Web page. That’s similar to the appeal of ad stacking, where multiple advertisements are placed on top of each other in a single unit. Each ad is counted as viewed, but anyone who does see a page with stacked ads will only see those on top. Both pixel stuffing and ad stacking often show up on tab-unders, further reducing the chance that anyone will actually see them. These are windows that open out of sight behind another window but still get counted as viewed by ad-tracking software.

Bot-detection tools are improving but won’t save you from this sort of thing entirely — by the time the software detects bot traffic, you already have a problem. The state of the art is another reason that IT should be consulted about digital advertising programs. IT is much less likely to think that bot detection is a panacea that completely protects marketing dollars.

When it comes to digital marketing, here are some basic precautions you should take:

  • Buy ads from reliable sources. The name-brand sites that we’re all familiar with are more expensive than others, but that’s because they offer reliable audiences and services that can help verify views. For example, Facebook recently began offering advertisers the option of having a third party, Moat, verify that the ads appearing in a user’s news feed was viewed by a human.
  • Focus on the right metrics. Rather than relying solely on CPM (cost per thousand views) or CPC (cost per click), focus on sales conversion, loyalty program enrollment or other business measures. Landing-page visits and other micro measures are easy to track but do little to grow the business. Calculating ROAS (return on advertising spending) correlates advertising to business results and helps direct advertising spending to the most effective channels.
  • Monitor everything. You get what you measure. Online advertising is a complex web of advertisers, brokers, resellers, strategy firms, websites and more. Understand the role of each player in the supply chain, including partners of your partners. Insist on inventory transparency in order to understand where programmatic advertising is being run.
  • Track and pay only for human views. Scrutinize ad bills carefully; deciphering these charges can be time-consuming but can help reduce advertising costs. Refuse to pay invoices from blacklisted or unapproved sites. In addition, calculate cost-per-human for each ad on every website by subtracting a reasonable estimate of bot views. (Software tools can provide a probable percentage.) Then use cost-per-human data per advertisement to help determine how to best allocate the advertising budget.

The most important thing is for Marketing to understand that IT’s experience with cybersecurity, technology vendors and compliance can help improve advertising effectiveness and therefore seek its involvement at the outset. If you’re in IT and aware that your organization us using digital advertising, share some horror stories with Marketing and ask to be part of the digital advertising team. Your good advice will go straight to the bottom line, which pretty much guarantees that it will be appreciated.

Bart Perkins is managing partner at Louisville, Ky.-based Leverage Partners Inc., which helps organizations invest well in IT. Contact him at BartPerkins@LeveragePartners.com.

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