October 16, 2013

Alarming Online Sleaze Factor

If they gave awards for reporting on the advertising industry (and why not, they give awards for everything else) this year's award should go to Mike Shields of Adweek whose work on the corruption and fraud in the online ad industry has been outstanding.

This is by far the biggest advertising story of the year, and no one but Mike seems to be interested in it.

His latest piece, The Amount of Questionable Online Traffic Will Blow Your Mind ran a few days ago and should be required reading for anyone who buys display advertising.

The article asserts that
"...the online ad industry is facing a swelling crisis, one defined by fake traffic, bogus publishers and invisible Web visitors... bogus ad inventory, as it turns out, is rampant. In fact, according to numerous sources across the ecosystem, fake traffic is essentially systemic to online advertising—it’s part of how the business works."
Mike reports that the world of online advertising is so screwed-up, corrupt, and incomprehensible that at times it is impossible to know what you are buying and who you are buying it from...
"...According to (independent trading desk) Digilant COO Nate Woodman, the situation is so ungovernable that the agency has found instances where it’s ended up buying impressions from itself."
The problem is that no one wants to kill the golden goose. Naive, clueless advertisers are getting stuck with billions in worthless, nonexistent "advertising."
"John Snyder, CEO of the keyword-targeting firm Grapeshot, says he’s lost business because his company won’t sell bad inventory. “We’ll hear, ‘Your competitor got great clicks,’ but all on two sites and it was all fraud. But it’s these optimization algorithms that find those clicks.' "
The fraudulent practices aren't just limited to banner ads...
"While the display market has seen dicey practices growing for a while now, the challenge of bad inventory is suddenly escalating in video..."
Is anything changing? Says Woodman (of Digilant)...
“When we try to tighten things up, our measured performance goes down...We need to fix this as an industry,” he adds. “Somebody needs to give a shit.”
Last month, we ran a post about this subject that speculated that as much as $9.5 billion in online advertising is either fraudulent or invisible.

Unfortunately, nobody is going to "give a shit" until somebody goes to jail.


Cecil B. DeMille said...

The heart of the problem is that the online ad biz has convinced people that clicks are what's worth paying for, not actual results. Change that and all of this takes care of itself.

Sean Peake said...

It's called wire fraud.

uglymugagency said...

It's not just large advertisers who are getting scammed. I've had small business clients seek my help with testing the validity and worth of a variety of sites to advertise on. More than 1/2 of the sites prove to be worthless.

And the biggest targets for this phony audience number scam? Realtors. The poor bastards are so desperate to get clients they'll toss money at any website that promises them "targeted" prospects.

Hell of a thing. Then again the anonymity of the web is the perfect media for scams and fraud.