Dubbing Ad Fraud As ‘Organized Crime’, WFA Suggests Solutions

ad fraud

Numbers indicate that ad fraud has become a serious issue for marketers globally. It is estimated that ad fraud is likely to exceed USD 50 billion globally by 2025. Given the current structure of the industry, the only true victims of the situation are marketers. Agencies, vendors and media owners, albeit unintentionally, still benefit from fees and commission when fraud occurs.

To help marketers reduce their exposure to ad fraud, the World Federation of Advertisers (WFA) has issued its first set of guidelines. The advice is designed to assist marketers in taking practical steps to ensure that as little as possible of their advertising budget falls victim to ad fraud.

WFA’s Compendium of Ad Fraud Knowledge for Media Investors is compiled in conjunction with the Advertising Fraud Council, which is a collaborative research and advocacy initiative curated by Botlab.io and with Botlab.io itself, a research foundation focused on researching ad fraud, user rights violations and other malicious practices in the advertising technology.

The document warns that there is no silver bullet to eliminate ad fraud and says that even with all the recommended counter measures in place, an advertiser could still suffer from single digit percentile exposure.

The document identifies four key areas where action can be taken:
#1. People & Technology: Brands need to develop in-house expertise to support vendor selection, work with cyber security partners to help understand common threats and demand full transparency of investment, including full disclosure of the websites being used to promote their products or services.

#2. Education & Communication: Brands need to set clear expectations of what they demand from their partners. They should set appropriate metrics that, where possible, relate back to business outcomes. They should also encourage open information sharing related to preventing ad fraud.

#3. Standards: Brands should avoid run of exchange buys in favor of databases of safe sites. Advertisers that need to hit digital investment targets may have to accept that these will not be achievable without exposing themselves to high levels of fraud.

#4. Governance: Contracts with agencies and vendor partners need to be revised to ensure that there are clear penalties for misallocating spend to ad fraud related inventory, where preventing it could be reasonably achieved. Those elements of the ad tech chain that have benefited from fraudulent activity in the form of commissions and fees should be requested to return them to the advertiser.

Making these changes will require brands to show leadership and work closely with the ecosystem partners to drive change. The WFA believes that this is essential to ensure that more budget does not get siphoned off to what it dubs as “organized crime”.

While it might be obvious that social spam-sites, providing no opportunity for advertising effectiveness, are a danger, it’s also possible to identify ad fraud among premium publishers, typically in the form of sourced traffic.

“Advertisers are the sole victim of ad fraud and the WFA wants to equip them with the tools to minimize their exposure. There is much that advertisers can do to improve the situation in terms of setting new standards, contractual changes and increased transparency, but ultimately behavior change is required across the industry,” said Stephan Loerke, CEO, WFA.

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