Ways to Think About
Solving Digital Ad Fraud
Dr. Augustine Fou
http://linkd.in/augustinefou
acfou @mktsci .com
March 2014
...
Pay Off Credit Cards
Financial advisors always recommend paying off high
interest credit cards first, BEFORE figuring out ...
Fighting Cancer
Solving digital ad fraud first is like removing a visible
cancerous mass before it metastasizes and spread...
Flu Outbreak
Digital ad fraud is like viruses in biologic systems – 1) they are
good at hiding by pretending to be other t...
Credit Card Fraud
Source: Business Insider, March 5, 2014

Digital ad fraud is like
losses due to credit card
fraud. Banks...
Prioritization Pyramid
START at the bottom, solve low hanging fruit first

30%

40%
30%
-6-

targeting

optimization
impro...
Solve Low Hanging Fruit
Reduce the wasted ad spend first and then improve optimization
25% On-Target Delivery
(Nielsen)

8...
The Size of the
Digital Ad Fraud
Problem
-8-

Augustine Fou
Types of Digital Ads
Impressions

Clicks

Leads

Sales

(CPM/CPV)

(CPC)

(CPL)

(CPA)

Display ads
Mobile display
Video a...
Digital Ad Spend (IAB H1 2013)
Performance

CPM
Impressions

Clicks

Leads

Sales

(CPM/CPV)

(CPC)

(CPL)

(CPA)

Display...
Digital Ads: Fraud Estimates
Average

Impressions

Clicks

(CPM/CPV)

(CPC)

Dollars

$8.0B

60%

$2B

Mobile

40%

$2B

S...
Ad Fraud Ranges
Range
• Display ad fraud fake ad
impressions created by bots

• Video ad fraud fake video ad
views generat...
Subject Matter
Experts
- 13 -

Augustine Fou
Mike Moran
IBM Distinguished Engineer, Advanced Text Analytics
Mike worked for IBM for 30 years, rising to the level of Di...
Dr. Augustine Fou – Technical Forensics
“I advise clients on optimizing
advertising across all channels. One
main area of ...
Ted McConnell – Digital Consigliere
“My Goals are to drive, and participate
in the process that yields the winning
vision ...
Related Articles
ROI Case for Solving Ad Fraud
By: Augustine Fou January 2014

Fake YouTube Videos
By: Augustine Fou, Dece...
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Ways To Think About Solving Digital Ad Fraud Augustine Fou Mike Moran Ted McConnell

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Digital ad fraud is as rampant as other forms of fraud in other industries. what are some ways to think about prioritizing solving digital ad fraud, relative to other digital marketing activities that advertisers can spend money on?

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Ways To Think About Solving Digital Ad Fraud Augustine Fou Mike Moran Ted McConnell

  1. 1. Ways to Think About Solving Digital Ad Fraud Dr. Augustine Fou http://linkd.in/augustinefou acfou @mktsci .com March 2014 -1- Augustine Fou
  2. 2. Pay Off Credit Cards Financial advisors always recommend paying off high interest credit cards first, BEFORE figuring out where else to invest the money. The savings of 18% - 33% is immediate and guaranteed, while the returns from other investing is not. The same applies to solving digital ad fraud – once the waste from fraud is minimized or eliminated then the other optimization and targeting enhancements can go to work. -2- Augustine Fou
  3. 3. Fighting Cancer Solving digital ad fraud first is like removing a visible cancerous mass before it metastasizes and spreads. If it isn’t removed as soon as possible, it continues to grow and evolve and becomes even harder to beat. The same applies to solving digital ad fraud – once the visible cancerous mass is removed, then other techniques can be applied to track down malignant cells that may have spread (other forms of sophisticated bot-generated fraud). -3- Augustine Fou
  4. 4. Flu Outbreak Digital ad fraud is like viruses in biologic systems – 1) they are good at hiding by pretending to be other things, 2) they leverage the cells’ own tools and food supply to multiply, 3) they can morph and evolve to stay head, and 4) they can attack en masse and bring an entire body to its knees. Fighting digital ad fraud should also mimic biologic defenses – 1) immune cells distinguish antigens from the body’s own cells and attack them, 2) immune response is developed and evolved to recognize the same bad guys again and prevent future attacks. -4- Augustine Fou
  5. 5. Credit Card Fraud Source: Business Insider, March 5, 2014 Digital ad fraud is like losses due to credit card fraud. Banks/issuers usually have to “eat” the cost to protect their cardholders. In the case of digital ad fraud, the key is to NOT do business with known criminals (don’t place ads on known fraudulent sites). -5- Augustine Fou
  6. 6. Prioritization Pyramid START at the bottom, solve low hanging fruit first 30% 40% 30% -6- targeting optimization improvement delivery viewability bots /not seen by humans waste reduction Augustine Fou
  7. 7. Solve Low Hanging Fruit Reduce the wasted ad spend first and then improve optimization 25% On-Target Delivery (Nielsen) 82% Ignored (not relevant) (Harris Interactive) 54% Not In View (not seen) (comScore) 23% Ad Blocked (wasn’t shown) (PageFair) 24 – 29% confirmed bot (Solve Media) -7- Augustine Fou
  8. 8. The Size of the Digital Ad Fraud Problem -8- Augustine Fou
  9. 9. Types of Digital Ads Impressions Clicks Leads Sales (CPM/CPV) (CPC) (CPL) (CPA) Display ads Mobile display Video ads Social display • Search ads • Mobile search • • • • -9- • Completed lead forms sold on costper-lead basis • Affiliate revenue share Augustine Fou
  10. 10. Digital Ad Spend (IAB H1 2013) Performance CPM Impressions Clicks Leads Sales (CPM/CPV) (CPC) (CPL) (CPA) Display 19% $8.0B Video 7% $2.9B Search 43% $18.1B $2.8B $3.7B Mobile 15% $6.5B NOTE: revenues annualized from actual 1H 2013 figures from IAB (assumes $42B annual ad spend) Lead Gen 4% $1.7B 11% Other $4.8B $35.5B - 10 - • • • • classifieds sponsorship rich media email Source: IAB, 1H 2013 Digital Advertising Report, Oct 2013 Augustine Fou
  11. 11. Digital Ads: Fraud Estimates Average Impressions Clicks (CPM/CPV) (CPC) Dollars $8.0B 60% $2B Mobile 40% $2B Search 30% $6B $14B $18.1B $2.8B $3.5B Video $4B TOTALS 39% Search 50% Video Display Display Mobile $2.9B (U.S. digital ad spend only) $35.5B - 11 - Multiple sources, see Appendix Augustine Fou
  12. 12. Ad Fraud Ranges Range • Display ad fraud fake ad impressions created by bots • Video ad fraud fake video ad views generated by bots • Mobile ad fraud fraudulent or accidental clicks • Search ad click fraud click fraud on search ads - 12 - Average Dollars 30-70% 50% $3-7B 50-80% 60% $1-2B 30-50% 40% $2-3B 20-40% 30% $4-8B (U.S. Only) Augustine Fou
  13. 13. Subject Matter Experts - 13 - Augustine Fou
  14. 14. Mike Moran IBM Distinguished Engineer, Advanced Text Analytics Mike worked for IBM for 30 years, rising to the level of Distinguished Engineer. Mike has more than 20 years experience in search technology, led the IBM product team that developed the first commercial linguistic search engine in 1989, and has been granted five patents in search and retrieval technology. He led the integration of ibm.com's site search technologies and served as product manager for IBM's search and text analytics products Author of the acclaimed book on Internet marketing, Do It Wrong Quickly, on the heels of the best-selling Search Engine Marketing, Inc., Mike Moran led many initiatives on IBM's Web site for eight years, including IBM's original search marketing strategy. Mike also serves as Chief Strategist for Converseon, a leading social media consultancy based in New York City. Mike holds an Advanced Certificate in Market Management Practice from the Royal UK Charter Institute of Marketing, and is a Visiting Lecturer at the University of Virginia's Darden School of Business. He also writes a marketing column for Search Engine Guide and for the Biznology newsletter and blog. - 14 - Augustine Fou
  15. 15. Dr. Augustine Fou – Technical Forensics “I advise clients on optimizing advertising across all channels. One main area of focus is reducing ad waste due to fraud – fake impressions, clicks, leads, and sales – in order to raise ROI.” FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM) MCKINSEY CONSULTANT CLIENT SIDE / AGENCY SIDE EXPERIENCE PROFESSOR AND COLUMNIST ENTREPRENEUR / SMALL BUSINESS OWNER PHD MATERIALS SCIENCE (MIT '95) AT AGE 23 ClickZ Articles: http://bit.ly/augustine-fou-clickz Slideshares: http://bit.ly/augustine-fou-slideshares LinkedIn: http://linkd.in/augustinefou - 15 - @acfou Augustine Fou
  16. 16. Ted McConnell – Digital Consigliere “My Goals are to drive, and participate in the process that yields the winning vision for my clients. I'm a Digital Marketing Generalist: I've Run large organizations, been staff to c-level executives at P&G, hold 4 Patents, successfully driven change in Marketing and Advertising practice in P&G and other companies.” ADVERTISING RESEARCH FOUNDATION MANAGER, DIGITAL MARKETING INNOVATION AdAge Articles: http://adage.com/author/ted-mcconnell/4334 LinkedIn: https://www.linkedin.com/pub/ted-mcconnell/0/5b5/8a2 - 16 - Augustine Fou
  17. 17. Related Articles ROI Case for Solving Ad Fraud By: Augustine Fou January 2014 Fake YouTube Videos By: Augustine Fou, December 2013 Digital Ad Fraud Briefing By: Augustine Fou December 2013 Motive and Opportunity for Ad Fraud By: Augustine Fou, February 2014 How Display Fraud Works By: Augustine Fou, May 2013 Fake Facebook Profiles By: Augustine Fou, Dec 2013 How Click Fraud Works By: Augustine Fou, November 2013 Fake Twitter Accounts By: Augustine Fou, August 2013 The Magnitude of Digital Ad Fraud By: Augustine Fou, November 2013 Display Fraud 101 (video) By: Augustine Fou, Feb 2014 - 17 - Augustine Fou

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