We are now going to discuss one of the biggest questions that arise around the topic of ad fraud: Why does it exist in the first place?
As with most big problems, a combination of factors contributes to an environment that makes the problem possible and persistent.
In the case of ad fraud, it’s a big problem for a number of reasons: the open nature of the programmatic advertising marketplace, the fact that ad fraud is technically not illegal, and lastly, misaligned incentives across the entire supply chain, leading to inertia and passive treatment of the problem.
“Despite the allure of programmatic advertising, it’s increasingly difficult to argue with the idea that it’s a dead end: it wouldn’t be the first technology (or company) that made sense on paper but failed because of the lack of proper incentives for those involved.” — Ben Thompson, tech analyst at Stratechery”
Ad Fraud Vs. The Advertising Ecosystem
The programmatic advertising ecosystem is based on being open. This means that any advertiser or publisher should be free to participate in the marketplace.
It’s an extremely democratizing concept, but it also creates an opportunity for bad actors to join the party and pollute it with not only a lack of quality, but in some cases, outright deception. It’s the double-edged sword of open ecosystems.
Because the barrier of entry for new players is so low, anyone can sell and anyone can buy. This is a good thing for smaller advertisers, agencies and publishers — but it’s also beneficial for bad actors.
The alternative to open ecosystems, however, is closed platforms (e.g., Google, Facebook, LinkedIn, Twitter), also known as “walled gardens.” Closed platforms come with their own trade-offs: decreased competition, and therefore innovation, leading to fewer choices for marketers, which is never a good thing.
Ad Fraud Is Not Illegal
One of the biggest reasons why fraud is so rampant is simply that it’s not technically illegal.
Unlike credit card fraud, nobody is going to jail for ad fraud, and it’s not exactly the sort of activity that elicits a crackdown from law enforcement, which means there is significantly less risk involved. And yet it’s extremely lucrative.
So, imagine a bad apple is weighing their options, and on one hand there is credit card fraud, which has modest rewards and very high risks, or ad fraud, which is very lucrative and very low-risk. It’s a no-brainer.
Something else to keep in mind is that the higher the payoffs, the higher the levels of fraud.
Preventing Ad Fraud and Ad Injections is a never-ending task, requires ongoing technical development and BI to compete with the advanced fraud and injection methods out there. Here at Wingate Media we have developed a set of tools allowing your to gain more on your display traffic, the capability of blocking different injections is allowing our team to simply reduce your eCPL by hundreds of percents and more.