Friday, August 18, 2017

Legitimate publishers need to fight back to the online menace of ad fraud that is out of control. While we are faced with an overreaction legislation with the CASL act that prevents companies from doing business our federal and provincial governments is taking a blind eye to all ad fraud that is more of a problem than spammers. (Note: The email industry polices itself with the higherst ethical standards btw).This report by Dr. Augustine Fou, an independent Ad Fraud Researcher (see bio below) suggests that ad networks and open exchanges is just a front for the ad fraudster to bilk advertisers for their marketing dollars and the ad tech companies are skimming 40% off the top of ad budgets. I guess our politicians are in over their head when it comes to this issue.



It was found that on good publishers websites 75% were real people and 2% bots, on ad networks it was 17% and 30%, and on open exchanges it was 3% and 72%. The lure of cheap advertising in an auction format by the ad networks and open exchanges can be delivered as they do not reach real people and so the costs are lower as they do not have to pay writers for the content. What a large scale scam that is being done on the ad and media industry. I guess the old saying you pay for what you get is very true in programmatic buying networks. 


The latest sales report from Procter and Gamble suggest this is true that when they cut out digital in their media plan sales went up by 2%. P&G was the first major advertiser to call out the industry for their questionable or even criminal business practices.


JP Morgan Chase also saw this when they took their programmatic buying in-house when they compared the results of advertising on 400,000 websites per month and then cut back to 5,000, there was no difference in the campaign’s results. The conclusion was that they were not reaching real people when they were advertising on the 400,000 sites (only 12,000 had positive results btw out of the 400,000).


It is time we remind advertisers that digital is not what it claimed to be by the ad tech community. Unfortunately the simple fact the people are reading more on their smartphones does not mean this will be the holy grail to product sales success by advertising in a mobile ad network. According to the report 43% of traffic is fraudulent.


Unfortunately this confidence scam has become reality for some marketers and Facebook flooding the market with a $2 CPM is putting legitimate news publishers like the National Post, Toronto Star and Globe and Mail at a huge cost disadvantage in the marketplace that has cause these organizations to lay off staff. The problem is ad fraud is hard to detect according to the report.

To keep it simple ad networks should be banned from all media plans (that includes Facebook and Google), I have done this with my media buying clients and only buy direct from credible brands, even though they have higher CPMs in the $15-$20 range at least I know I am getting real people, ok in this case 75%. But my buys rely heavily on traditional like radio and I have noticed increased demand for magazines in print and digital with my publishing clients versus web display.

So all you legitimate publishers out there share this artcile with your ad clients and ad agencies to show how they have been scammed. I will be doing this also with my network.

The full report is available at this link on Dr Fou's Linkedin site

This opinion was written by Martin Seto



About the researcher: Dr. Augustine Fou is an industry-recognized thought leader in digital strategy and integrated marketing, and former Chief Digital Officer of Omnicom's Healthcare Consultancy Group, a $100 million agency group serving pharma, medical device, and healthcare clients. Dr. Fou has over 20 years of management consulting experience and hands-on experience in creating and optimizing marketing across traditional and digital channels. Dr. Fou teaches digital and integrated marketing at Rutgers University and NYU. Dr. Fou completed his PhD at MIT in Materials Science and Engineering at the age of 23. He started his career with McKinsey & Company and previously served as SVP, digital ..



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This guest blog is for an exchange of stories from members of the publishing industry be it a magazine, newsapaper or digital only publisher to help foster change and innovation in the digital age. These stories will inspire the industry with ideas to help the industry prosper and keep it relevant with readers and advertisers. If you will like to contribute your story contact Martin Seto 416-907-6562 or
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