Lessons: Pitfalls and Fraud in Online Advertising Metrics

How does online advertising become less effective than advertisers expect and less effective than measurements indicate? The current research explores problems that result, in part, from malfeasance by outside perpetrators who overstate their efforts to increase their measured performance.

Pitfalls and Fraud in Online Advertising Metrics

Benjamin Edelman

Harvard Business School

INTRODUCTION

A century after retail pioneer John Wanamaker wondered which half of his advertising spending was wasted, advertisers have reason to think that a solution is within reach. Modern online advertising placements purport to track which users see which offers, who clicks, and who buys—a road map for vastly improved targeting, greater efficiency and, one imagines, reduced cost.

Despite these high hopes, the short-run reality is challenging. This paper, in fact, identifies four key challenges:

  • Some perpetrators intentionally drain advertisers’ budgets. When fraudsters manipulate advertising systems, their efforts...

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