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Online Advertising’s “Big One” Problem

One of the central plotlines running through the 2006 film Fast Food Nation – Richard Linklater’s dramatization of the non-fiction bestseller by Eric Schlosser, who co-wrote the screenplay alongside Linklater – focuses on Don Anderson, a newly-hired VP of Marketing at the fictional Mickey’s, a just-barely-legally-distinct-from-McDonald’s chain of burger joints.

Looking to investigate reports of abnormally high “fecal coliform counts” in the patties used to make Mickey’s flagship burger, Anderson travels to the (fictitious) city of Cody, Colorado to visit the (also fictitious) Uni-Globe Meat Packing plant, “where every single Big One patty in the entire country gets made.”

In one of the film’s pivotal scenes, Greg Kinnear (as Anderson) sits opposite Bruce Willis (as Harry Rydell; an “executive VP out of the Chicago office” with nebulous function but obvious authority). During a lunch meeting at a non-descript restaurant – the two dine on burgers, of course – Anderson confronts Rydell about what he’s learned during his trip: unskilled migrant workers mangled by equipment; falsified health and safety testing, combined with artfully deceptive public tours of the UMP facility; production lines rushed to the point that “every day” at the gut table, the contents of a cow’s digestive tract winds up pouring out over its carcass.

Harry,” Anderson implores, “there’s shit in our meat!

“There’s always been a little shit in the meat,” Harry responds matter-of-factly, still chewing on his hamburger. “You’ve probably been eatin’ it your whole life.”

I find myself reminded of that scene as I sit down to write this, the inaugural blog-post for my new digital marketing firm.

Nearer to the beginning of my career, I probably would have identified more with Kinnear as Anderson than with Willis as Rydell. But these days, having spent the past six years working on both the buy-side and the sell-side of the digital advertising industry, I feel as if I’ve become Harry Rydell. Don (the newbie marketing director) may know what’s right from what’s wrong, but Harry (the old hand) knows what is.

I’m not saying that I could fill an entire TED Talk with what I’ve learned while working in this industry. What I’m saying is, if I did ever present a TED Talk, then “Ad Tech Nation” would absolutely make my shortlist of potential titles.

“You’ve Probably Been Eatin’ It Your Whole Life”

According to eMarketer, digital ad spending reached $192 billion globally as of 2016. That same year, global losses due to online ad fraud were projected to hit $7.2 billion, based on a 2017 study by the Association of National Advertisers and cyber-security firm WhiteOps.

To put that into perspective, the total value of the global black market for small arms and light weapons is estimated at about $1 billion annually.

2016 also saw the World Federation of Advertisers predict that – based on then-current trends – within the next decade, online ad fraud “will be second only to cocaine and opiate markets as a form of organised crime”. That WFA report, the (incredibly-titled) Compendium of Ad Fraud Knowledge for Media Investors, remains one of the best primers on the issue of ad fraud that I’ve personally come across, and ought to be required reading at every trade school currently flogging their own “Digital Marketer” certificate program.

“Hell, if it weren’t for me, there wouldn’t be no Big One”

Back to our movie. Still at their meeting, Kinnear (as Anderson) threatens to reveal what he’s learned to the higher-ups at Mickey’s. Bruce Willis (as Harry) launches into a monologue with shades of Colonel Jessup; you want me on that wall, you need me on that wall.

“You know what, Don?” he begins, “you should be thankin’ me, instead of doin’ all this complaining. I negotiated a Hell of a good price with U.M.P. Okay? I negotiated a great price for your fuckin’ meat…I’d like to see you go and find a supplier that will sell you Grade-A chuck at fourty cents a pound, I’d like to see that.”

Publishers, for their part, have been aggressive in combatting ad fraud – as the last link in the programmatic supply chain, they face the greatest loss exposure in the digital advertising ecosystem. Sophisticated buyers in the market (major brand advertisers, demand side platforms, etc.) have been making efforts as well, partnering with various third-party vendors to block and/or detect fraudulent inventory.

Yet despite the best efforts of many in the industry, the most recent Bot Baseline report by WhiteOps/ANA found that “today, fraud attempts amount to 20 to 35 per cent of all ad impressions”. While the report claims that total financial losses due to fraud have been in decline (even while overall digital ad spending has exploded in recent years), fraudulent inventory still represents a significant portion of all ad impressions sold and purchased online.

Of course, there’s one key group that often gets left out of these discussions, and that group is: most advertisers. The majority of businesses advertising online – heck, most marketing agencies, for that matter – simply don’t work with the budgets and the volumes necessary to justify paying for third-party fraud detection. There’s a simple explanation for why the total cost of ad fraud is going down; those with the biggest wallets have found ways to limit and avoid paying for fraudulent inventory.

The rest of us, meanwhile, face the same risks as larger buyers when we advertise online. But we do so with far fewer tools to overcome them. In other words, it isn’t the big brands who are being impacted most by ad fraud; it’s small to mid-sized businesses who often see the largest share of their media budgets spent on buying fake impressions, generating fake interest from an audience of fake users.

“Just cook it, that’s all you need to do.”

Not all hope has yet been lost. Industry initiatives such as ads.txt have helped legitimate publishers to curb ‘domain spoofing’ and other forms of unauthorized selling. More than 40% of the top 1000 websites now include an ads.txt file in their root domain (similar to how webmasters use a robots.txt file to guide search engine crawlers).

Ads.cert, an evolution of the ads.txt initiative, is currently in beta and expected to be ready for adoption sometime later this year. Ads.cert aims to increase transparency between buyers and sellers by using public key cryptography to prevent any tampering with, or modification to, a publisher’s original bid request as it travels through the supply chain. While the benefits of this approach are obvious for both buyers and sellers, ads.cert will almost certainly take longer than ads.txt to see widespread adoption by the industry, as it also depends on programmatic buyers/sellers implementing the latest version of the OpenRTB protocol (OpenRTB 3.0), which is not backwards compatible with previous versions.

“We all have to eat a little shit from time to time.”

The scene between Don and Harry occurs at near-exactly the halfway mark of Fast Food Nation‘s runtime, but we don’t see much more of Greg Kinnear until after the credits have already started rolling. After his meeting with Harry, Don checks out of his hotel and flies back home. His character disappears from the film’s narrative, while the focus shifts to tell the stories of others. In spite of all he’s learned in Colorado, the newest Vice-President of Marketing at Mickey’s remains silent.

Ad fraud has been described as an “existential threat” to online advertising, and combating it is a responsibility shared by every legitimate player in the ecosystem.

On a macro-scale, industry-wide adoption of ads.txt and ads.cert looks like the most promising path to removing bad actors from the programmatic landscape (don’t talk to me about blockchain-based solutions; this is a serious blog, for serious people).

For major brands and other large-scale buyers, third-party verification remains a viable tactic, while some have moved to exclusively purchasing ads.txt-authorized inventory (Google enabled this option within their premium ad server last year, and is working to make this setting the default by August; still no word on when/if a similar option will become available to buyers through Google Ads).

As for the rest of us, the fight against ad fraud requires careful planning, analysis, and optimization. It requires us to look at not just top-line metrics on campaign performance, but to understand where those campaigns are winning impressions, how users are interacting with those impressions, and studying “post-click” engagement metrics from those users who do click-through to your website.

Your advertising agency might boast about the phenomenal CTR’s and super-low cost-per-click they’re delivering for your campaigns, but if those ‘clicks’ aren’t translating into a measurable impact on the overarching goals of your advertising (attract qualified leads, drive ecommerce sales, generate on-site engagement, etc.), then what good are they really doing for you?

Ultimately, it’s small to mid-sized businesses who need to be most vigilant (and most vocal) in combating ad fraud today. Theirs are the campaigns most vulnerable to hijacking by online fraudsters, and it’s their media spend – in fractions of a penny at a time – which makes its way into the hands of criminal and terrorist organizations worldwide.

There’s always been a little shit in the meat. You should find out where yours is coming from.