Online ad fraud (and what you should know about it)

Advertising fraud Online ad fraud (and what you should know about it)

Published on 03.10.2019 by Valerio Stallone, Research Associate, Zurich University of Applied Sciences (ZHAW)

Is online ad fraud a real danger or simply scaremongering? It’s difficult to determine how much ad fraud there is in Switzerland due to the lack of consensus amongst market players in the advertising ecosystem. The various forms of online ad fraud will be presented at Connecta.

Digital communication and online advertising are the areas in which there is the most investment by Swiss companies. Net expenditure on online advertising in 2017 totalled CHF 2.1 billion (Advertising statistics). In 2018, however, it was just under 550 million although Stiftung Werbestatistik omitted search engines and social networks (persönlich.com).

The quality of the advertising environment is defined by three variables: brand safety, viewability and ad fraud. Brand safety is about maintaining the reputation of the advertiser although it is common for advertisers to battle for the best placement of ads even within unsuitable environments. Viewability means displaying an ad on the user’s screen. The focus is on combating poor viewability and thus the incorrect billing of views. Ad fraud refers to the discrepancy between paid-for views and actual views. Companies running advertising pay for ad delivery which does not reach the intended end users. This results in commercial damage since the desired advertising effect is not achieved and part of the media budget goes to fraudsters (IAS Insider).

Identifying the types of ad fraud

The types of ad fraud are categorized using the triggers for ad fraud (e.g. malware, bot traffic, URL hacking) and on the basis of the metrics affected (views, clicks and actions/leads). Valerio Stallone, by contrast, advises using categorization that looks into the affected step of the conceptual flow of the digital advertising ecosystem.

Figure 1: Digital advertising conceptual flow

Based on <a href="http://www.iadisportal.org/digital-library/the-digital-advertising-ecosystem-visualization-%C2%96-literature-review" target="_blank">Stallone & Klaas, 2019</a>
  • Step i) web requests: forms of fraud that counterfeit views using bots or real people.
  • Step ii) HTML and ad frame delivery: forms of fraud that place counterfeit, concealed ad frames, some of which may be entirely invisible.
  • Step iii) ad request and user data delivery: forms of fraud that present user data as better than it is – sometimes to increase its attractiveness for CPM bids, and other times to exploit people’s willingness to purchase
  • Step vi) auction data delivery: forms of fraud affecting the transfer of auction data.
  • Step xvi) clicks: forms of fraud that create counterfeit clicks using bots or real people.

Valerio Stallone speaks on this topic at Connecta in Bern and will present more information on related research at the Institute for Marketing Management at ZHAW.

Valerio Stallone, Research Associate, Zurich University of Applied Sciences (ZHAW)

Valerio Stallone is bringing his ten-year professional experience in digital business with him: Geschenkidee.ch, DeinDeal.ch, Webrepublic AG, SELFNATION and most recently, Marketing Director Europe at Ava Women. In his present role at ZHAW, he researches digital marketing and focuses on the online advertising ecosystem, ad operations, and blockchain applications in marketing.

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