Ad fraud taking over a quarter of brands’ budgets, warns TrafficGuard

This article was first published in Which-50.

Australian marketers’ campaigns are being hindered by sophisticated ad fraud but most brands aren’t even aware it’s happening to them, according to Luke Taylor, founder and chief operating officer of TrafficGuard, a Perth-based company that uses machine learning to detect and prevent ad fraud.

“Everyone in advertising knows about ad fraud, however, most aren’t aware it’s happening to themselves,” Taylor tells Which-50.

“It’s difficult to detect without the proper tools. Due to the lack of visibility and awareness, companies don’t realise how much more effective their advertising performance could be with fraud mitigation and ad quality assurance.”

A complex and often opaque online advertising ecosystem makes it hard for businesses to see exactly where campaigns are suffering, Taylor says. He warns many brands have been lulled into complacency on ad fraud.

“Legacy brand ad fraud solutions are perceived as an agency tax that brands have to pay to work in particular channels. These legacy solutions don’t demonstrate value to the brand, which means many treat fraud prevention as a tick box exercise.”

Reported ad fraud rates vary widely. Advertising industry associations claim it is rarely higher than five per cent while ad fraud vendors warn it can be above 30 per cent. Taylor puts the discrepancy down to varying methodologies and sample sizes, but insists TrafficGuard has detected fraud in “all channels in the ecosystem”, meaning marketers need comprehensive and updated solutions.

He says the fraud rate can indeed be as high as 30 per cent.

“We are able to detect invalid traffic across all digital channels – including what might be considered premium channels like Google Ads. Wherever there is money in digital advertising, there is ad fraud. All channels and all geographies.”

Taylor says his 30 per cent figure comes from TrafficGuard’s own data and statistical analysis which is then checked against other sources. But he declined to elaborate on specifics like client sample size, saying it was not necessarily a good indicator and methodologies varied.

“What if it was one client that had 99 per cent of the population? You can’t make statistical sense of the data by looking at the number of clients.”

Taylor says methodologies for calculating fraud are different based on the country, channel, device, type of ad engagement.

TrafficGuard announced last week that it is making its Pay Per Click fraud detection tool free to assist organisations that may be struggling with COVID-19 induced cuts to marketing budgets. The tool, which shows where and when fraud is occurring, will remain free and organisations can upgrade to automatically filter it out and mitigate fraud in real-time.

Learn more: The world’s first free fraud protection for Google Ads

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Adtech Inquiry Needed To Reign In Google And Facebook

Australia’s consumer and competition regulator is embarking on a landmark inquiry into the online advertising ecosystem, following its Digital Platforms Inquiry which uncovered an opacity many in the industry have been frustrated by for years.

“The ACCC’s goal is to protect choice, competition and consumer privacy, all currently at risk of compromise in today’s adtech landscape,” Taylor says. “It’s hard for new businesses to compete in the media landscape as they get pushed out or acquired by the bigger players.”

Taylor is referring to Google, Facebook and Amazon, the American tech giants which hoover up around two-thirds of all the money spent on online ads.

“From an advertising demand perspective, businesses have limited options to access audiences outside these walled gardens. Google, Facebook, Amazon have absolute control over the types of businesses that may advertise with them.”

According to Taylor, the dominance of a few players who now control most of the information data for online browsing, shopping and social media means the ways data is used in advertising are “extremely complex”.

The ACCC inquiry, currently seeking submissions, is essential for ensuring the regulatory response doesn’t have the effect of entrenching the tech giants further, Taylor says.

“The ACCC needs to build a baseline of understanding about the digital media landscape in order that Australia is equipped to put the right measures in place to protect competition, choice, and consumer privacy.”

Taylor acknowledges that whatever the result it is unlikely Australia will be able to reign the multinationals in on its own. But he sees a broader movement growing.

“The efforts of ACCC are Australia’s contribution to face the mounting global pressure to control Google, Facebook and Amazon. It is this global pressure that is going to lead to change.

“It is great to see the ACCC taking an active step to address the various problems that stem from a lack of transparency in the digital media landscape.”

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