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Advertisers must wake up on fraud

News, 07 June 2016

BRUSSELS: Advertisers can't afford to continue their current "complacent" approach to ad fraud, as they are the only real casualties in what the World Federation of Advertisers (WFA) warns could be a $50bn a year industry by 2025.

That's because agencies, vendors and media owners still benefit, albeit unintentionally, from fees and commission when fraud occurs.

"Advertisers are the sole victim of ad fraud," said Stephan Loerke, CEO, WFA. "Ad fraud is endemic and it has to stop."

He added that there had been "a degree of complacency" among advertisers and cautioned that "If brand owners don't take action, we can't expect others to do so on our behalf".

He remarks came as the WFA issued its first guidelines to help marketers reduce their exposure to ad fraud, while at the same time acknowledging that they are unlikely to eliminate it completely.

The Compendium of Ad Fraud Knowledge for Media Investors aims to raise awareness of ad fraud among brand owners and to give them practical steps they can take to minimise the possibility of their losing their money to it.

The report identifies four key areas, including people and technology, education and communication, standards, and governance.

Brands need to develop in-house expertise to support vendor selection, it recommended, and they should work with cyber-security partners to help understand common threats and demand full transparency of investment.

Brands should also set clear expectations of what they demand from their partners and set metrics that relate back to business outcomes.

Further, brands should avoid run of exchange buys in favour of databases of safe sites, while contracts with agencies and vendor partners ought to be reviews to ensure clear penalties for misallocating spend to ad fraud related inventory, where preventing it could be reasonably achieved.

"Ultimately behaviour change is required across the industry," Loerke said. And the report had a dire prediction for the future if no action is taken.

"Unless dramatic changes take place in the advertising technology ecosystem, and in the way money is being invested in media by advertisers and their industry partners", the $50bn number "may soon appear like an impossibly low figure rather than a conservative estimate," it said.

Readers can download the Digital Backlash summary from Warc's Toolkit 2016, in which ad fraud is discussed along with issues such as viewability and ad blocking.

Data sourced from WFA: additional content by Warc staff