Click fraud: a bane of contention in the digital ad ecosystem

An influx of emerging technologies such as analytics, automation and artificial intelligence (including chatbots) has altered advertisers’ strategy. Digital mediums have surpassed traditional ones, forming a significant chunk of advertising budgets. As per an EY report, Reimaging India’s M&E sector, advertisers in India have shifted spends to digital, that contributes to 17% to the total advertising budget in 2017. This is expected to grow to 22% by 2020. While these numbers present opportunities for the advertisers, they attract fraudsters as well.

Are bots your viewers?

Advertisers’ investments toward digital ad buying, search marketing and social media are expected to generate high returns. However, one of the key challenges in deriving a high “click through rate” is ensuring that the clicks are genuine and not bots. The incidence of “click fraud” has become alarming in the digital advertising industry and media reports suggest that advertisers have lost close to $16.4 billion to fraudulent traffic and clicks in 2017.

“Click fraud” leads to an inflated number of ad views to generate higher revenue through the “cost per click” or “cost per impressions” model. This could be perpetrated by advertising networks, publishers and even competitors. While advertising networks and publishers may have vested financial interests as their revenues are linked to the number of clicks, competitors may resort to spamming to exhaust the advertiser’s budget. In some cases there has been a marked difference between the clicks garnered and the actual conversion percentage, leading to unsuccessful media campaigns. This rendered the allocated budget futile.

Measuring advertising effectiveness

The digital ecosystem is highly dynamic, with the amount of content consumed through online or mobile channels constantly on the rise. Models to measure the efficacy of the advertiser’s digital strategy are also evolving to suit consumer, business and campaign needs. The standard “cost to click” or “cost to impressions” models may not work for mature, high investment and targeted campaigns, especially when advertisers are growing wary of rising incidences of fraud.

Advertisers with low digital spends, fluid KPI and focused on “brand awareness” campaigns can get lured by the number of likes, clicks and impressions. For instance, a luxury car maker launched a mega digital campaign for its latest model. The response received through search marketing, social media and influencer campaign was very positive. But close evaluation after the campaign ended showed the traffic comprising primarily as “bots”. These were channelled through developing countries in the Indian subcontinent and South East Asia, with a majority arising from little known click farms in Bangladesh. Ultimately, the campaign had little result to show at the end as the sales remained fairly flat.

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