If you get off the New York City subway on Canal Street, it isn’t long before you’re approached by someone selling fake goods. Preeminent among them are the watch salespeople, but it’s not hard to find fake bags, jewelry, luggage, or just about anything else that has a supposed high value at a very low cost (which can be negotiated lower if you press the seller). I racked my brain to come up with some other example of consumers knowingly buying fraudulent goods but I am unable to do so. Oh – except for one: programmatic advertising space in media.
In December 2014, AdWeek reported that, according to an Association of National Advertisers and WhiteOps study, digital advertising was projected to take in $43.8 billion in 2015, and $6.3 billion would be based on fraudulent activity. The average bot level for display ad campaigns throughout the study was 11%, but for programmatic ad buys that number rose to 17% (55% more). Bots account for 11% of display ad views and 23% of video ads and up to 50% of publisher traffic is bot activity, just fake clicks from automated computing programs. They estimate that between 3% and 31% of programmatically bought ad impressions were found to be from bots, with an average of 17 percent.
Despite the fact that everyone buying digital ad campaigns knows that they might be buying fake goods, a study from the Association of National Advertisers and Forrester finds that 79% of marketers have made programmatic ad buys within the past year. (The growth is staggering: In 2014, the number was 35%.).
“While programmatic buying indeed offers benefits, it suffers from complexity and a lack of transparency,” said Bob Liodice, president and CEO of the ANA. “And that is wasteful. The industry — and marketers in particular — would greatly benefit from a rethink of the entire digital supply chain.” Ya think? What’s interesting isn’t that many advertisers are moving programmatic buying in-house where, in theory, they can have more control and better oversight or are taking other steps to deal with fraud: it’s that a significant number aren’t doing so.
Like the shoppers on Canal Street, any marketer who is buying programmatically without asking a LOT of questions and taking actions to increase transparency is knowingly buying fake goods. Are you?