Is Fraud the Real Culprit for Wasted Ad Spend?
When I recently listened in on a webinar that featured my CMO Steven Wolfe Pereira, along with Joshua Lowcock, Chief Digital Officer at Universal McCann, that talked about the importance of having a Connected Customer Graph, Joshua mentioned something ad fraud I found extremely interesting.
What is “ad fraud”? It’s the invalid traffic where bots are clicking or viewing digital advertisements on websites rather than actual people. And it’s wasting advertisers’ marketing budgets by the billions each year.
In a recent story on CNBC.com, it’s estimated that ad fraud cost brands $12.5 billion in 2016 and agency group The&Partnership projected that figure to climb another $4 billion this year. That’s a stunning number, and has resulted in brands, large and small, re-thinking their agreements with media suppliers that are programmatic.
And the statistics back up why they’re doing it. In the same article, The&Partnerships’ research showed that programmatic buying had a global invalid traffic rate of 29%, which translated into $7.8 billion in wasted marketing spend. When the ads were bought directly from publishers, the invalid traffic rate dropped to 12%.
But according to Joshua, the heart of the problem is not so much “fraud” as it is “identity”.
“There’s a lot of talk in the industry around ad fraud,” he said. “… It’s not ad fraud that’s the issue, it’s the lack of industry focus on identity and understanding audiences.”
In other words, brands need to veer away from a scattershot approach to digital advertising, trying to reach broad audience profiles. By switching to a more targeted strategy that’s based on trusted customer data that authoritatively identifies them, ad fraud become much harder to pull off. And with less fraud, there’s less waste. And with less waste, marketing budgets are more efficient as the messaging become more effective and relevant.
So how do you identify customers, confidently? Make sure you are using authoritative data that has been verified and tied to a single user ID. Individual attributes are only useful when they are brought together to form a 3D view of your customer that’s consistently refreshed and up-to-date.
To listen to the on-demand version of the webinar with Steven and Joshua, you can click here, and to learn more about how trusted customer identity can make a difference for your brand’s advertising, please read the paper we recently published, “How Strong is Your Customer Graph?”