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?

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

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. 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. 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. 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. Subject Matter
Experts
- 13 -
Augustine Fou

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. 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. 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. 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