January 14, 2015

The Difference Between Waste And Fraud

According to the Association of National Advertisers, $6.3 billion of advertisers' money will be stolen by online ad fraud this year. Globally, Solve Media puts the number at $11.6 billion.

According to the Interactive Advertising Bureau about 1/3 of online ads paid for by advertisers never appear before a human being. Google puts the number at 56%.

According to Forensiq, just one average bot-net can produce 1 billion fraudulent ad impressions a day. No one knows how many average bot-nets there are. Or above-average ones.

Like all the "metrics" related to online advertising, no one can agree on a damn thing. What everyone does agree on, however, is that the amount of fraud is staggering. As Rance Crain, editor-in-chief of Advertising Age magazine says,"...there is massive fraud in the digital marketplace."

But there is another fraud being perpetrated that no one is talking about.

It is a soft fraud committed by those tacitly accepting the criminality. I'm talking about advertising agencies and marketing officers.

They are quietly complicit with the creeps that are corrupting our industry. They pretend they are concerned by corruption while they cavalierly pooh-pooh it.

The soft fraudsters always starts with a chuckle and a recitation of the famous quote from John Wanamaker, "Half my advertising is wasted, I just don't know which half." And then they pretend that this corruption and criminality is part of the waste Wanamaker was talking about.

It is no such thing. The willingness of advertising agencies, marketing officers, pundits and "experts" to pretend that the billions of dollars being stolen is, ho-hum just part of the waste we've always had, is a lie.

This type and level of corruption has never existed before in the ad business. The insouciant dismissal of it is inexcusable.

Once the crooks have stolen half your advertising budget with fraudulent traffic, fraudulent impressions, fraudulent clicks, and fraudulent websites, what's left of your budget is still subject to the waste of inattention that Wanamaker talked about.

Online advertising is growing too fast. Too many people are making too much money. When this happens, no one wants to kill the golden goose.

The advertising industry is heading for big trouble. It needs to start taking this seriously instead of appointing committees and pretending it's just an annoyance we can "manage."

There is a difference between waste and fraud. It's time for the ad industry to stop pretending.


Kram said...

'This type and level of corruption has never existed before in the ad business. The insouciant dismissal of it is inexcusable.'

I strongly recommend you read Turner's 'The Shocking History of Advertising'.

Cecil B. DeMille said...

What I learned today: you can "pooh pooh" something cavalierly. Astoundingly amusing.

How many of us have raised our hands on this already? I have. How many of us have been assured by the people in charge that "We're okay – none of that goes on with our placements"? I have.

Until clients insist on reform, agencies will do nothing differently. Agencies do not change meaningfully from within. Not anymore. They chase dimes with dollars and smile and nod and "Sure, we'd be happy to place those banner ads on boydstoast.com."

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Jonathan Peterson said...

Huzzah. Sitting on the publishers' side of that fence, it's really frustrating to see all the money that's being made in ad tech to use optimization strategies, programmatic, viewability, and such to cut into our ad revenues (which actually get plowed into the content that brings eyeballs) when the same technology spending COULD be getting rid of fraud instead.

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Glyn Musica said...

Well, lets talk about measurability in the offline space shall we? Its the big arse ad agencies creaming the brands for their money..as alway down at the bottom is where we actually understand shit!