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Hidden Costs in Digital Media Supply Path


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How many of these hidden costs were you aware of?
Without even talking about digital ad fraud, there are other costs in the digital ad supply path that eat up most of every dollar that advertisers spend in digital. There are known costs of 60 - 70% extracted by adtech middlemen.

Published in: Marketing

Hidden Costs in Digital Media Supply Path

  1. 1. March 2019 / Page 0marketing.scienceconsulting group, inc. Hidden Costs in Digital Media Supply Path March 2019 Augustine Fou, PhD. acfou [at] 212. 203 .7239
  2. 2. March 2019 / Page 1marketing.scienceconsulting group, inc. Previously … Advertisers Publishers Bad Guys 1/3 2/3 Ads are not shown to humans, wasted ad dollars Ad revenue declines because dollars are stolen by bad guys. Steal money using fake ads; siphon dollars out of ecosystem.
  3. 3. March 2019 / Page 2marketing.scienceconsulting group, inc. Ad revenue diverted by domain spoofing Pay on bids won vs ads served Hidden Supply Path Costs Advertisers think they bought… Unspent media dollars go missing Random or replayed deviceID Faked valid traffic, viewable ads Analytics and measurement manipulation Attribution scamming Residential proxies to disguise traffic Media dollars to agency Set up campaign in DSP Buy white list domains Buy valid, viewable Buy Real devices Buy “fraud free” Buy “verified” Did it arrive? #marketers who think that having bot detection in place is enough clearly don’t know about these other things – these aren’t fraud, right? Catching the 1% IVT, missing rest
  4. 4. March 2019 / Page 3marketing.scienceconsulting group, inc. Missing/Wasted Media Dollars Waste due to fraud, and unspent dollars go missing Display Campaign 1 $3,300,000 (+10%) (agency invoice to advertiser) $3,000,000 DSP invoice to agency (paid by advertiser) $1,800,000 (-40%) DSP log total (bids won) On average, 24% of advertisers’ media spend was wasted/missing Mobile Campaign 2 $950,000 (campaign spend) $330,000 (35%) (invalid devices/fraud) Display Campaign 3 $7,900,000 (campaign spend) $1,500,000 (19%) (invalid devices/fraud) Display Campaign 3 $3,900,000 (campaign spend) $550,000 (14%) (invalid devices/fraud) Display Campaign 4 $7,000,000 (campaign spend) $1,700,000 (24%) (invalid devices/fraud) Source: Method Media Intelligence DSP logs show only $1.8 million of bids won, compared to the $3.0 million paid; $1.2 million went “missing” (not returned/credited to advertiser)
  5. 5. March 2019 / Page 4marketing.scienceconsulting group, inc. Paid for Bids Won, vs Ads served Hidden cost: marketers pay for bids won; ads served is less, sometimes by a lot, than what they paid for Campaign 1 • For every bid won, there should be an ad served – a 1:1 relationship • Comparing DSP data vs ad server data shows that for certain domains the discrepancy is large • Marketers pay on bids won; the discrepancy is the hidden cost of ads not being served Low CPM Campaign 2
  6. 6. March 2019 / Page 5marketing.scienceconsulting group, inc. Paid for domains spoofing real ones … but, PublisherA does NOT sell ads on open exchanges! “Dark Revenue” is ad revenue diverted away from publishers, so they don’t even see it’s missing. • Large pubs – “dark” is 1-2X ad revenue • Medium pubs - “dark” is 5-10X ad revenue • Small pubs - “dark” is 20-100X ad revenue
  7. 7. March 2019 / Page 6marketing.scienceconsulting group, inc. (2018) Code to alter viewability “the [malicious] code used by NMG is designed to interfere with the ability of third-party measurement systems to determine how much of a digital ad was viewable during a browsing session. This code manipulated data to ensure that otherwise unviewable ads showed up in measurement systems as valid impressions, which resulted in payment being made for the ad.” Buzzfeed, March 2018
  8. 8. March 2019 / Page 7marketing.scienceconsulting group, inc. Traffic sellers’ “high quality traffic” Many sources to buy “traffic,” tune “quality” level, host bots Google “buy real human traffic” Select vendor and “traffic quality level” Host your own bots (cost $3.99/mo)
  9. 9. March 2019 / Page 8marketing.scienceconsulting group, inc. tOLKnMEzcnARvLTvChnt tOLKnMEzcnARvLTvChnt tOLKnMEzcnARvLTvChnt tOLKnMEzcnARvLTvChnt tOLKnMEzcnARvLTvChnt tOLKnMEzcnARvLTvChnt tOLKnMEzcnARvLTvChnt tOLKnMEzcnARvLTvChnt Random vs Replayed DeviceIDs Use: to defeat fraud detection and frequency caps RANDOM deviceIDs lXvBEeRXPURtcKILYFYE IdUkQeWgqshMmfMdzlAx INIjBzHJHywhgRsMdQPe tiAnxwuKBNCjoMetZaPN UjtRbuUTvYUwmABhmPGH MDSUUgkENQkQDztavzfl iljoJEXUcLCEFwSdrwZn APbLSRUvlrIoofIchhLg NZXVVKCbymRYBSStNRYz UiSBmuDpYLkNvsHBKcri tOLKnMEzcnARvLTvChnt LZyhgblHtMIMaAliHWYB vKFknsnhGouIucYgxmdu • If fraud detection hasn’t seen a device before, the default action is to let the ad serve • Frequency caps based on deviceIDs are defeated, each device appears as new • Valid deviceIDs are harvested from real devices and sent to fake devices or apps to replay • Replayed deviceIDs are used by fraudulent apps to defeat fraud detection REPLAYED deviceIDs tOLKnMEzcnARvLTvChnt validated deviceID harvested
  10. 10. March 2019 / Page 9marketing.scienceconsulting group, inc. Luminati[.]io Oxylabs[.]io Smartproxy[.]com Residential Proxies Use: to disguise data center bots to appear to come from residential IP addresses, avoid detection 40 million IP addresses 10 million IP addresses 30 million IP addresses
  11. 11. March 2019 / Page 10marketing.scienceconsulting group, inc. IVT Detection vs Other Fraud Sites and apps that cheat may look fine in bot detection reports 1.3% + 57% = 58% bot fraud site/app fraud overall fraud bot detection sees this bot detection misses this
  12. 12. March 2019 / Page 11marketing.scienceconsulting group, inc. Attribution Scamming Directly loading attribution urls and SDKs are to show fake clicks Source: Method Media Intelligence
  13. 13. March 2019 / Page 12marketing.scienceconsulting group, inc. Faking Analytics, Measurement Google Analytics and other measurement are blocked or faked demo of mouse moving around on screen demo of faked Google Analytics traffic demo of code to scroll pages, edit elements
  14. 14. March 2019 / Page 13marketing.scienceconsulting group, inc. Subprime Digital Crisis An entire ecosystem and economy (digital ads) built on fraud volume
  15. 15. March 2019 / Page 14marketing.scienceconsulting group, inc. Fraud, waste eats most budgets $1 spent by Marketer blocked see slide 1 site/app fraud see slides 2-4 ad/user fraud see not viewable see slides 5-7 10% 30% 40% 20% • fake sites, spoofing • auto-reload/refresh • ad stacking • tag manipulation • redirect/sourced traffic • pop-ups/unders • naked/invisible ads • bots/fake users • fake devices • background load • fake apps • deviceID rotation • random deviceID • retargeting fraud • fake profiles/data • malware/adware • fake analytics • fake attribution • click injection • incentivized views • residential proxy • app is not in use • tab is not active • browser minimized • 50% ad in viewport • misrepresented • (1s display, 2s video) 10% 70% 20% blocked fraud useless productive digital ads for Marketer 1% ?
  16. 16. March 2019 / Page 15marketing.scienceconsulting group, inc. “Now when I tell you less than 1 cent of every digital dollar is ‘productive’ what do you think?”
  17. 17. March 2019 / Page 16marketing.scienceconsulting group, inc. About the Author Augustine Fou, PhD. acfou [@] 212. 203 .7239
  18. 18. March 2019 / Page 17marketing.scienceconsulting group, inc. Dr. Augustine Fou – Researcher 2013 2014 Published slide decks and posts: 2016 2015 2017 20192018