The year ahead for ad fraud, by mFilterIt’s Amit Relan and Dhiraj Gupta

Ad fraud is on the rise, and 2022 will see it innovate further, write Amit Relan and Dhiraj Gupta of mFilterIt.

By Amit Relan, director and co-founder, and Dhiraj Gupta, chief technical officer and co-founder, mFilterIt

1. Ad-spend drainage on walled gardens will increase by 10-12 per cent

The World Federation of Advertisers (WFA) predicts that ad fraud will become the biggest market for organised crime by 2025, worth about $50bn. Walled gardens (well-known platforms such as Google and Facebook) globally encompass an overall spend of $360bn, which constitutes up to 80 per cent of the overall traffic on the web.

Major banks and financial institutions across the globe are reporting an average of 17 per cent ad fraud on walled gardens and up to 30 per cent on programmatic. If the numbers are crunched, there is no doubt that campaign costs can come down by 25-35 per cent on an average where fraud is detected and eliminated. In other words, brands can reach an average of 10-15 per cent more with ad traffic and get targeted audiences where they reinvest their saved costs on new campaigns. Not only is ad fraud causing brands to waste a lot of their critical digital marketing spends, it is also preventing brands from reaching out to the critical mass of consumers.

2. While brands will focus on performance campaigns, fraud on performance campaigns will see an overall rise

Another common misconception among brands and advertising agencies is that performance campaigns are free from fraud as they are targeted campaigns. They believe that although media campaigns may face issues of ad fraud, performance campaigns are free from the clout of malicious publishers supplying invalid traffic.

Many performance marketers still insist they are immune to ad fraud. They say it is because they don’t pay for ad impressions (CPM – cost per thousand) or even for clicks (CPC – cost per click). They only pay upon success – for example, the sale happened (affiliate revenue share) or the mobile app got installed (cost per install, CPI). Of course, by not paying for the ad impressions or clicks, they avoid ad fraud and click fraud, but that doesn’t mean they are still not the victims of fraud – like attribution fraud or app install fraud.

Examples of fraud detection on sophisticated performance campaigns come from many OTT (over the top) and e-commerce players. Google and Facebook restrict themselves to CPM and CPC campaigns, which makes it very difficult for advertisers to actually judge the performance of the campaign. With conversions as low as 3-4 per cent, often these OTT and e-commerce players don’t know that the problem of low conversion is actually due to invalid traffic. In both cases, events are the major criteria to determine the success of the campaign. The completion of registration on OTT platforms and the sales happening on e-commerce apps or platforms constitute major pay-out events in the overall funnel. The average fraud coming out of performance campaigns is around 25-40 per cent. One of the major reasons for a high fraud rate is that almost all the traffic received on performance campaigns is from affiliates, according to our data.

We at mFilterIt understand that there is a direct correlation of about 70-80 per cent between invalid traffic and conversion rates; our numbers show that conversion rates actually go up to three times when the problem of ad fraud is treated. To put it in context, this number is over and above the costs saved on advertising, which is up to 40 per cent.

3. Viewability as a metric will be outdated and a more down-the-funnel approach will take over

More and more brands are waking up to the fact that viewability as a metric is not translating into business.

Value is being measured in terms of down-the-funnel metrics, as impressions and clicks don’t deliver the right conversion results. Advertisers are increasingly demanding more tangible proof of effectiveness for campaigns that run on viewability matrices. While most ad fraud companies are delivering meaningful top-of-the-funnel awareness, it’s impossible for them to drive optimisation in viewability campaigns.

Brands will now use the ‘post-click analysis’ method to measure the effectiveness of their marketing campaigns.

Take the example of the fast-growing ed-tech industry. It survives and grows on lead conversions. When brands stop their analysis of viewability and clicks, lead fraud picks up. Sophisticated bots are now actually able not only to reach the webpage but also able to fill up leads and submit forms.

As a result, improved metrics focused on ad representation and user interaction (device, browser touch, scroll events, etc.) instead of archaic rules like bounce rates or CTRs, etc. are set to gain prominence. Viewability will reduce in priority and be used for media optimisation only. Companies and their brand campaigns will increasingly move towards a more measured approach to performance metrics and lower funnel ROI to drive efficiency and optimisations.

4. Brand safety will be in the spotlight

Just to put things in perspective, a recent study conducted in Singapore suggested that seven out of 10 customers believe that ad placements on misinformative content are a brand’s doing. Another study revealed that one out of three potential customers disengages because of brand safety issues.

Cases of brand safety in 2022 will rise with more fake websites and disinformation sources taking the spotlight. There will be renewed effort across all brands and industries to ensure that brands are being associated with relevant and trustworthy content.

For example, we at mFilterIt uncovered more than half a million cases of domain infringements including fake websites, usage of unlicensed brand logos, fake distributorships and typo-squatting across geographies and industries. Brands will have to work with brand safety solution providers to not only protect their reputation online but also protect the revenue lost due to these cases.

Your ads on unsafe videos will actually perform poorly and degrade the ROI of your campaign in general. This means that by protecting your brand you also get the benefit of better campaign performance and improving the ROI of your campaigns. Brands will embrace the ‘relevancy approach’, where ads are placed on relevant content on video streaming platforms such as YouTube, and they will actually deliver better conversions because of relevancy and contextual filters. Targeting not only the right audience but also the right channels, social media and influencers is what the relevancy approach aims to do. Needless to say, it automatically delivers better results and improves conversions to the tune of one-and-a-half times.