Programmatic marketing is growing quickly, but managing the associated ad fraud is one of the biggest challenge for advertisers.

1. Managing Programmatic Marketing
In The Face of Ad Fraud
Prepared by Tim Bourgeois
November 29, 2016

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Session Background
It is estimated that the programmatic display advertising marketplace in the
U.S. will total $22 billion this year. These kinds of media buys will account for
more than two-thirds of the entire U.S. display marketplace.
The popularity of programmatic makes it all the more important for marketers to
understand what the technology can and cannot do--especially in an online
marketplace plagued with ad fraud. This session will clarify the misconceptions
and mysteries that surround programmatic, and tell you how it can work as part
of your marketing strategy.

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About me

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About Me: East Coast Catalyst & ChiefDigitalOfficer.net

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About Me: Client Experience

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About Me: East Coast Catalyst Capabilities
STRATEGY
• Corporate and business unit digital strategy
• Digital marketing audits and
roadmaps
• Vendor and technology selection
• Reputation and executive coaching
CREATIVE | UX | DEVELOPMENT
• Identity and branding
• Communication strategy
• Mobile App design and development
• Website design and development
• Information architecture, wireframes,
user flows, audience definition
• User testing and heuristic reviews
• Animation, video, and games
DIGITAL MARKETING
• Search marketing (paid and organic)
• Content marketing
• Social media marketing
• Email marketing
• Mobile marketing
• Display advertising and rich media
DIGITAL MARKETING OPTIMIZATION
• Conversion optimization
• Digital platform optimization
• Digital project management
• Analytics and reporting
• Interim CMO / VP-Marketing solutions
• Event planning and production (via
ChiefDigitalOfficer.net)

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What is programmatic, anyhow?

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Definition
“Programmatic media buying is broadly defined as the use of
technology and algorithms to effect the sale, purchase, and delivery of
advertising, (think: the Google Display Network, RTBs, and PMPs).
eMarketer has gone so far as to claim that ‘programmatic is
extremely efficient and unparalleled in its ability to pair rich audience
data with ad inventory and targeting.’”
“Marketers weigh the pros and cons of programmatic”
Digital Content Next | October 11, 2016

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Global Digital Ad Market Totals ~$175B

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Global Digital Ad Market by Medium

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US Digital Ad Market Totals ~$72B

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Media Growth Flat-ish, Except Digital & TV

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US Digital Ad Market by Format

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Programmatic Accounts for 50%+ of Display

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Programmatic Headed for 80% Share

16. 163/15/2017 :: Page 16
May, 2015
Programmatic 90%
Direct 10%
Programmatic 50%
Direct 50%
20162015
Instagram switches on
self-service ads
High Growth Platforms > Programmatic

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What is the impact of ad fraud?

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Global Cost of Ad Fraud Estimate

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Trade Associations Are Weighing In
“The level of criminal, non-human traffic literally robbing marketers'
brand-building investments is a travesty. The staggering financial
losses and the lack of real, tangible progress at mitigating fraud
highlights the importance of the industry's Trustworthy Accountability
Group in fighting this war. It also underscores the need for the entire
marketing ecosystem to manage their media investments with far
greater discipline and control against a backdrop of increasingly
sophisticated fraudsters.”
Bob Liodice, ANA President & CEO
AdWeek| January 19, 2016
Others weighing in: other associations & non-profits, industry and business
press, and vendors with media buying and auditing solutions.

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Why is digital ad fraud so widespread?

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The Primary Culprit: Bots
“Automated software programs known as bots, the primary vehicle for ad fraud, infected
a range of advertisers, which reported that bots represented 3% to 37% of the
impressions for their ads. That's up from last year, where bot percentages ranged from
2% to 22%, according to ANA.”

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A Variety of Fraud Tactics

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Rapid Expansion of New Territories

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Insanely Complicated Digital Advertising Ecosystem

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What’s a marketer to do?

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1. Determine How Much is at Stake
Company Revenues Digital Spend* Potential Fraud**
$10,000,000 $187,500 $9,375
$25,000,000 $468,750 $23,438
$50,000,000 $937,500 $46,875
$100,000,000 $1,875,000 $93,750
$250,000,000 $4,687,500 $234,475
$500,000,000 $9,375,000 $468,750
$1,000,000,000 $18,750,000 $937,500
$5,000,000,000 $93,750,000 $4,687,500
$10,000,000,000 $187,500,000 $9,375,000
* Digital spend estimated at 25% of marketing budget; marketing budget assumed to be 7.5% of revenues
** Assumes 50% of digital is on display, and 10% is fraud
A typical company with $100M in sales can expect to be impacted
by approximately $93,750 in digital ad fraud, making it impractical
for a company spending less than $1M/year on digital display
advertising to allocate resources to fraud.

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2. Follow ANA Guidelines
• Be aware and involved
• Understand the programmatic supply chain and request inventory transparency (especially
programmatic video buys that tend to have higher CPM and higher fraud levels)
• Request transparency for sourced traffic
• Include language on non-human traffic in terms and conditions
• Use third-party monitoring to ensure compliance with anti-fraud policies
• Require media quality measurement vendors to demonstrate effective anti-fraud technology
and provide measurement transparency
• Announce your anti-fraud policy to all external partners
• Support the Trustworthy Accountability Group
Source: Association of National Advertisers

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“Trust But Verify”
“We trust our agencies. It's not something
we take for granted, because it's a trust-but-
verify approach.”
Marc Pritchard
Global Brand Officer, P&G
AdAge| March 6, 2015

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3. Learn to Live With It
• You Won’t Be Alone. Among the most experienced users of
programmatic—U.S. advertisers—only 3-in-10 survey
respondents say that marketplace quality is a ‘very serious’
issue (source: ExchangeWire), while more than 90% of
respondents in EMEA and APAC (less experienced users)
believe that’s the case. Even with major media outlets like the
WSJ and NYT keeping issues in the news, experienced
marketers know that a tactic like programmatic is going to
continue to generate favorable ROI for the foreseeable future.
• Focus on a Communication Strategy. A big fraud-related
challenge for marketers is addressing internal questions at their
companies, so getting prepared to address the issue up-and-
across the organization can pay big dividends. When doing so,
rely on quantitative metrics that support the use of digital
advertising – warts and all – within the context of the overall
marketing mix. This includes creating conversion- and
acquisition-based reporting that measures marketing
performance across key tactics (digital, print, radio, events,
etc.). Get people thinking about the big issues, not the noise.

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Tim Bourgeois
East Coast Catalyst
300 Summer Street, Boston, MA 02210
617-314-6400
www.eastcoastcatalyst.com
@ECoastCatalyst
@ChiefDigOfficer
Tim Bourgeois | tbourgeois@eastcoastcatalyst.com
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Q & A