This isn't being 'buried' it just isn't that interesting. All of the money the client gives to the agency gets spent, some goes to the agency, some goes to the networks, some goes to the content providers. That isn't news at all.
Fraud is rampant. Also not new, although it is also also pretty easy to spot and block.
Almost nobody pays per 'impression' because, well that went out of style about the same time Yahoo! banner ads did.
Eventually the advertisers are going to pay for performance, and to do that they are going to have to fix the way they do advertising so that their ad, leads to their landing page which identifies who delivered the ad. Then they are going to pay based on whether or not the person who landed on their page actually buys something (service, good, or subscription). No money, no ad payment.
Most companies other than Amazon really aren't set up for that, and Amazon won't do it yet because, as far as I can tell, they aren't being forced too.
Its a shame that "affiliate" ads like the ones they let bloggers use have 100X there ROI of "CPC" ads and yet they have convinced the bloggers they can pay then a nickel and they should be happy when Google gets $13 - $23 for the same result.
I started building this system out of disgust but never finished it. It isn't that technically difficult, but it does have a lot of moving parts, and it does require infrastructure on the advertisers web site which can create durable transaction records. Some day I think.
It's not at all obvious that advertisers are going to pay for performance, where I assume you mean buy ads on a cpa basis.
There's risk, and someone will bear, and get paid to bear, that risk. If advertisers buy on a cpa basis, they pay more for the privilege.
And frankly (imo) that's all for small to medium advertisers anyway. Bigger advertisers buy 3 month ios and, if you don't perform, don't reup. My experience at a large DSP is this: no-one comes in as a big account; they're all grown. You get $50k for 3 months and told to demonstrate performance. If you do, your account managers call up and demand 3-5x the money. Wash rinse repeat. You do get $3-$5mm/year accounts, but they all started under $100k/3 months. And in any case, all DSPs / ad networks will be measured on a cpa basis. Don't perform, and next quarters ios don't materialize. They're just not sold cpa.
If you aren't aware, btw, there are huge fights about attribution - last view is ridiculous but what most people use, leading to all sorts of gaming behavior particularly in light of cookie churn.
I heard of (large) brand advertisers where marketing managers bought fraudulent clicks on their own campaigns to "guarantee" success of these campaigns, for internal politics/career reasons. These advertisers probably like it the way it is, and keep their offline marketing colleagues in the dark.
> Eventually the advertisers are going to pay for performance, and to do that they are going to have to fix the way they do advertising so that their ad, leads to their landing page which identifies who delivered the ad.
I've setup a system that tracked that.
The result was a 95% drop in payments for referrals.
> Eventually the advertisers are going to pay for performance, and to do that they are going to have to fix the way they do advertising so that their ad, leads to their landing page which identifies who delivered the ad. Then they are going to pay based on whether or not the person who landed on their page actually buys something (service, good, or subscription). No money, no ad payment.
This already happens. It's referred to as an "acquisition" and "cost-per-acquisition" (CPA) is a fairly standard term in the advertising industry these days.
However, it doesn't necessarily involve money (e.g. a car company might define an acquisition as someone signing up for a test drive).
Spent some time a few years back working in web analytics and my experience was similar to what ChuckMcM describes above - advertisers were relatively sophisticated in general and wanted to pay for performance rather than impression. There are certainly agencies/networks that will waste you're money in advertising if you're not paying attention in digital or traditional media but controlling fraud wasn't terribly difficult. Lots of advertisers would run their own beacons to check and make sure they were getting the audience they were sold. The thing that made them the most nervous was when they couldn't audit their campaigns and the person measuring the audience was the same one selling it.
> Its a shame that "affiliate" ads like the ones they let bloggers use have 100X their ROI...
Sounds like an incredible market opportunity.
What are the companies that are building ad marketplaces targeting high performing affiliate bloggers which demonstrate their value better to advertisers, and share a higher proportion of profit with the bloggers?
Are there fundamental issues trying to scale up a business like this? Not everyone can spin their own custom 'sponsership' packages like DaringFireball, but there is a lot of good blog content out there.
I remember seeing some bespoke ad networks in the designer space, can't think of their name off-hand. Had the feel of a high-end web ring, if that's not an oxymoron.
> Eventually the advertisers are going to pay for performance,
That assumes that you can actually measure performance or attribution. This is far from a solved problem. As such many publishers are reluctant to sell on this basis.
Trivial rebuttal:
User clicks on ad, buys product. Who's to say that ad caused the sale? Maybe they've seen that particular ad or a variant on dozens of different publisher sites. Or even better, maybe the true product awareness was driven by an offline interaction (billboard or word of mouth).
In the general case, you simply cannot measure direct attribution or performance with any real sense of confidence.
Old story. For non-brand advertising this is easily solved by down funnel tracking. Any marketer worth their salt tracks to the 'ultimate goal' and will avoid the shadier networks by looking at overall results. End of the day it comes down to a ROMI metric. It doesn't matter if 50% of the impressions are fake as long as the total investment pays off. For brand marketing I follow the networks that show DM performance as this shows some level of quality.
The tricky part is what to do when it doesn't pay off.. This isn't and has never been my primary line of work - but I can't say that every campaign I ran was profitable, even though the ones that were extremely profitable did make up for those.
Isn't click fraud basically solved by the free market?
I mean, as more and more bots create fake clicks and impressions, the value of the traffic itself is reduced. This will lower the CPC and CPM and you'll still be able to buy traffic at its free market value. If the traffic becomes worthless, no one will be willing to pay for it.
Advertising fraud is basically arbitrage. The fraudsters are inflating the numbers but someone is still willing to pay a specific value for the traffic they're receiving. If a specific market is more prone to fraud, its because the amount publishers are paying is below its actual value.
It's "solved" for advertisers who can measure ROI, at least short-term. It's unsolved when the success metric for the campaign is not easily measured, like brand awareness. It's also not solved for the publishers not engaging in arbitrage or fraud who earn less and less per impression. Let it play out unchecked and the bad actors will kill the market by driving all the legitimate suppliers out of business: if ad rates are driven so low that content sites can't pay their staff with the ad dollars, they'll either go out of business or exit the market (i.e. erect paywalls, return to direct ad sales instead of participating in exchanges, etc).
The solution is better analytics. Any market player who can tell the difference between real and fake clicks will be better off than anyone depending on the market to somehow magically save them from increasing fake clicks by decreasing CPC and CPM.
Yes. I've seen certain areas where CPMs are falling, falling, even as reported traffic is rising. Such sites do whatever it takes to boost traffic some more. They also tend to cycle through a lot of "chief revenue officers" every 18 months or so.
It's a nutty way to run a business, but in the short-term it can pay the bills for lots of folks.
Google's the most open about the click fraud problem. They'll show you all the fake clicks you received but aren't being charged for if you customize the columns of your AdWords reports to add these two:
A lot of the traffic they charge for on the display/content network is still awfully iffy. I get spikes of traffic from blogspot blogs that didn't exist the day before all the time. They won't exist a week later. How likely is it that a new blog with a single uninteresting post suddenly has tons of traffic interested in clicking my ads? Not very.
My concern isn't that Google is being "open" about click fraud on their network advertising, which I think they are. But what about the fraud on Google service sites themselves. It at that point is no longer in Google's self interest to be as strict in their "open" reporting; it's ~90% of their revenue.
So, it becomes an ROI game, which as long as ROI is strong they can keep their rates up while keeping their profits climbing. Then again, Google's top line has been shrinking recently, so it is possible they are doing something about it, and it is hurting them. That or it's the general shift in advertising to focus on mobile where it's much harder to get engagement.
PPC campaigns feel like a shell game to me often times. Agency switching among advertisers is staggeringly high as people hunt for higher ROI.
The worse point for junk clicks is mobile display - particularly in app. Id never advise RON campaigns here without super tight monitoring. I've never been sure if it's more fraud or 'well placed ads'. I'm guessing the latter as kids apps seem to be the highest offender for mobile display.
@dangrossman I build white lists rather than a black lists for companies where I handle their marketing for display on mobile. Not sure if your offering something like this in Improvely but I imagine it would be of value to a bunch of clients. Advertising networks will hate you!
I work for an AdTech company. One of our selling points is that we track much time users actively spent on our ads (= ad is in viewport + tab is active + user has moved the mouse or scrolled in the past 20 seconds). If we consistently see a source of traffic spending < 30 secs, then we manually start digging into the logs.
If you're a brand/marketer, I recommend two easy things to increase your ROI: (1) Make sure you are not being charged for GoogleBot traffic. Seriously, for frequently updating sites, self-advertising GoogleBot can account for up to 10% of all impressions. Ad Networks can easily filter that traffic out. (2) If you're paying per impression, work with partners that charge on viewable CPM.
Are there seriously ad companies that aren't filtering out common bots by UA in 2015? That seems unlikely but would be very disturbing if true.
Second, I think simple tests like "time spent on ads" as a trigger is an extremely simplisitc, inefficient and likely inaccurate way of determining "potentially not human." The systems here are very complex, designed to mimic randomness within humanesque constraints.
This article is a mess. The author states, "An entire industry—billions of dollars and thousands of jobs—is at stake," then goes into a completely different rant, "why is nobody talking about this?"
Over half the images are incomprehensible or offer no insight.
Including an unintelligible graph without an explanation to why it's necessary is bizarre. Even more so writing headers like "Responses to the scandal" and dropping in a stock photo of a gavel. It's like a pull quote, but even lazier.
There is some value in this article,
>Hoffman, the retired ad agency CEO who I quoted at the beginning, puts it better than I can:
All I can say is, every now and then I used to request a few grand from a popular network that I won't name but you probably know which one it is... about click fraud, inconsistencies (which I was not making up at all). Every single time,. no questions asked, I was given the full amount requested...
Now I'm not saying that means anything... but it always felt a bit odd like... yes yes we know how bad it is, take your money and shut up and keep buying those ads
Has anyone ever attempted to correlate the claimed activity with actual human behavior? You'd essentially survey a sample of people's online habits, extrapolate to the larger population, and compare that with a similar sampling/extrapolation of reported clicks and impressions. My guess is that the fraud rate would actually be closer to 90%. But as others have pointed out, the market eventually catches up and discounts the watered-down traffic.
I'm the author -- and I'm completely amazed. Thanks to whoever submitted this, and thanks to all the upvoters! I'll be going through the comments and responding when necessary. Feel free to AMA!
Oh, there seem to be a lot of interesting stories here from people who worked for ad companies and related firms. Feel free to post your comments on the original Moz article -- I'm sure the community there would love to hear about it.
The smarter players measure and target accordingly. The rise of RTB and 3rd party companies or your own JS solutions let you cherry pick what you want, or you simply bid much lower (if at all) on traffic you consider not valuable.
This is mostly a problem for unsophisticated players and exaggerated hype originating from players that support tracking view ability, etc.
>This is mostly a problem for unsophisticated players
Aren't most customers of online ads unsophisticated users? The solution could of cause be to let a professional online ad company run your buying, but then you still don't know what they're doing with your money.
I believe that most of the people are running their online ad buys as if they where bus stops ads. That might be wrong to, but that's where the business needs to start.
Just a stylistic note, I found the word alleged to be a bit overused in the first part. A source of a quote in the article is given as: an interview given by "Jack Marshall, an alleged reformed fake web traffic buyer". How about an interview by Jack Marshall, who says he is a reformed fake web traffic buyer...
Hello! I'm the author. I just needed to use "alleged" a lot because I was citing second-hand -- though credible -- information and did not do any independent research. I could not verify anything myself, so I needed to make sure that the point was clear.
Moz is not a disinterested party. They sell services to promote marketing that doesn't involve paid media.
I am in the paid media business, and I am not disinterested either as such. I feel strongly that advertising is the lesser of evils of the alternative is marketing messages buried deep in content and social spam.
Hello, I'm the author of the Moz piece and just wanted to respond. (No, I do not work for them -- I'm just a contributor.)
1. They do not sell marketing services. They sell marketing software.
2. I pitched my article to them, and they were very skeptical about the topic at first. Obviously, the issue can come across as very conspiratorial and sensational. But once I showed them all of my credible sources and citations and explained everything in-depth, they decided to publish the piece.
3. Again, I cannot speak for Moz, but my sense is that they will publish anything that they perceive to be very helpful and interesting for their audience -- digital marketers. They more that they do so, the more that their brand will grow among their audience and the more that people will visit the website to read the good articles.
I don't know anything about advertising but sometimes I watch TV late at night and I see ads for various local and national companies and I always wondered how they ever could verify that they actually are getting the air time during the time periods and channels that they are paying for, it seems like the type of thing that could easily be either intentionally or unintentionally messed up. It seems like it could be something that could be automated, a system that would listen and or watch all the channels and log the adds for the companies that subscribe to the service to insure that the broadcasters are giving the time they say they are. There is probably already something like that out there, does anyone know if there is such a thing?
In my experience, buyers are usually not sophisticated enough to have this discussion. Often, syndicate salespeople don't understand the issue either. Nobody else in the value chain is incentivised to educate them about the issue, so it doesn't happen.
I founded, ran and sold a digital advertising company in the video space. We sold through various means including networks, direct sales and quasi-direct sales where we would engage a local syndicate to sell on our behalf. These were usually major digital publishers that used to be print publishers.
These people are moving a _lot_ of the volume in this industry. They're battling widespread redundancies and falling budgets. They are not attracting the cream of the crop and are in an unfamiliar industry (tech).
I'm not even in the marketing business but I tend to have a lot of fun with the people calling up trying to sell adwords packages... I know I have won if in the end they say "ok, actually that's more of a question for the tech guys in the back room...." when I ask them incredibly basic questions about their methods.
Guess it's so easy to sell to clueless business owners that taking 10 minutes to learn about the crap they are peddling isn't even worth it.
I'm sure fraud & waste exists in all mediums of advertising
$7 billion over meany years, while it seems like a lot, is still just a small amount of the total advertising online market
The figure may still be exaggerated and more research is needed. It could include things that are mistankingly called 'fraud' but instead if a misunderstanding of terminology
In a free market, online advertising fraud would depress prices as advertisers pay less due to worse results. If advertisers were getting 100% human traffic, rates would go up, making the ads more expensive.
So in the long-run it balances out. But on an individual level it sucks getting scammed.
In the mid 00's I was working for a cashback/incentive site. Basically we would give monetary incentive to members of our site to complete whatever each specific ad was measuring. It could be signing up for a newsletter, or registering an account at some site. Poker websites would pay well for new users.
The whole scheme was of dubious value for the advertisers, obviously. The ad networks were happy to have us, though.
That is the fear, certainly. But I don't think so. I am thinking that advertising will become more aligned with the content, and ad-publisher relationships will become more organic. Now, I'll also readily admit that I think cooperatives are the future of business, so I can see where people wouldn't agree with my crystal ball vision of the future of advertising.
[+] [-] ChuckMcM|10 years ago|reply
Fraud is rampant. Also not new, although it is also also pretty easy to spot and block.
Almost nobody pays per 'impression' because, well that went out of style about the same time Yahoo! banner ads did.
Eventually the advertisers are going to pay for performance, and to do that they are going to have to fix the way they do advertising so that their ad, leads to their landing page which identifies who delivered the ad. Then they are going to pay based on whether or not the person who landed on their page actually buys something (service, good, or subscription). No money, no ad payment.
Most companies other than Amazon really aren't set up for that, and Amazon won't do it yet because, as far as I can tell, they aren't being forced too.
Its a shame that "affiliate" ads like the ones they let bloggers use have 100X there ROI of "CPC" ads and yet they have convinced the bloggers they can pay then a nickel and they should be happy when Google gets $13 - $23 for the same result.
I started building this system out of disgust but never finished it. It isn't that technically difficult, but it does have a lot of moving parts, and it does require infrastructure on the advertisers web site which can create durable transaction records. Some day I think.
[+] [-] omarchowdhury|10 years ago|reply
[+] [-] x0x0|10 years ago|reply
There's risk, and someone will bear, and get paid to bear, that risk. If advertisers buy on a cpa basis, they pay more for the privilege.
And frankly (imo) that's all for small to medium advertisers anyway. Bigger advertisers buy 3 month ios and, if you don't perform, don't reup. My experience at a large DSP is this: no-one comes in as a big account; they're all grown. You get $50k for 3 months and told to demonstrate performance. If you do, your account managers call up and demand 3-5x the money. Wash rinse repeat. You do get $3-$5mm/year accounts, but they all started under $100k/3 months. And in any case, all DSPs / ad networks will be measured on a cpa basis. Don't perform, and next quarters ios don't materialize. They're just not sold cpa.
If you aren't aware, btw, there are huge fights about attribution - last view is ridiculous but what most people use, leading to all sorts of gaming behavior particularly in light of cookie churn.
[+] [-] Maarten88|10 years ago|reply
[+] [-] pstrateman|10 years ago|reply
I've setup a system that tracked that.
The result was a 95% drop in payments for referrals.
[+] [-] jackgavigan|10 years ago|reply
This already happens. It's referred to as an "acquisition" and "cost-per-acquisition" (CPA) is a fairly standard term in the advertising industry these days.
However, it doesn't necessarily involve money (e.g. a car company might define an acquisition as someone signing up for a test drive).
[+] [-] chuckcode|10 years ago|reply
[+] [-] zaroth|10 years ago|reply
Sounds like an incredible market opportunity.
What are the companies that are building ad marketplaces targeting high performing affiliate bloggers which demonstrate their value better to advertisers, and share a higher proportion of profit with the bloggers?
Are there fundamental issues trying to scale up a business like this? Not everyone can spin their own custom 'sponsership' packages like DaringFireball, but there is a lot of good blog content out there.
I remember seeing some bespoke ad networks in the designer space, can't think of their name off-hand. Had the feel of a high-end web ring, if that's not an oxymoron.
[+] [-] jgalt212|10 years ago|reply
That assumes that you can actually measure performance or attribution. This is far from a solved problem. As such many publishers are reluctant to sell on this basis.
Trivial rebuttal:
User clicks on ad, buys product. Who's to say that ad caused the sale? Maybe they've seen that particular ad or a variant on dozens of different publisher sites. Or even better, maybe the true product awareness was driven by an offline interaction (billboard or word of mouth).
In the general case, you simply cannot measure direct attribution or performance with any real sense of confidence.
[+] [-] JOnAgain|10 years ago|reply
[+] [-] Gustomaximus|10 years ago|reply
[+] [-] newman8r|10 years ago|reply
[+] [-] CaveTech|10 years ago|reply
Advertising fraud is basically arbitrage. The fraudsters are inflating the numbers but someone is still willing to pay a specific value for the traffic they're receiving. If a specific market is more prone to fraud, its because the amount publishers are paying is below its actual value.
[+] [-] dangrossman|10 years ago|reply
[+] [-] greglindahl|10 years ago|reply
[+] [-] GCA10|10 years ago|reply
It's a nutty way to run a business, but in the short-term it can pay the bills for lots of folks.
[+] [-] dangrossman|10 years ago|reply
http://i.imgur.com/sW1stNL.png
A lot of the traffic they charge for on the display/content network is still awfully iffy. I get spikes of traffic from blogspot blogs that didn't exist the day before all the time. They won't exist a week later. How likely is it that a new blog with a single uninteresting post suddenly has tons of traffic interested in clicking my ads? Not very.
[+] [-] partiallypro|10 years ago|reply
So, it becomes an ROI game, which as long as ROI is strong they can keep their rates up while keeping their profits climbing. Then again, Google's top line has been shrinking recently, so it is possible they are doing something about it, and it is hurting them. That or it's the general shift in advertising to focus on mobile where it's much harder to get engagement.
PPC campaigns feel like a shell game to me often times. Agency switching among advertisers is staggeringly high as people hunt for higher ROI.
[+] [-] Gustomaximus|10 years ago|reply
@dangrossman I build white lists rather than a black lists for companies where I handle their marketing for display on mobile. Not sure if your offering something like this in Improvely but I imagine it would be of value to a bunch of clients. Advertising networks will hate you!
[+] [-] papercruncher|10 years ago|reply
If you're a brand/marketer, I recommend two easy things to increase your ROI: (1) Make sure you are not being charged for GoogleBot traffic. Seriously, for frequently updating sites, self-advertising GoogleBot can account for up to 10% of all impressions. Ad Networks can easily filter that traffic out. (2) If you're paying per impression, work with partners that charge on viewable CPM.
[+] [-] nkozyra|10 years ago|reply
Second, I think simple tests like "time spent on ads" as a trigger is an extremely simplisitc, inefficient and likely inaccurate way of determining "potentially not human." The systems here are very complex, designed to mimic randomness within humanesque constraints.
[+] [-] throwaway3453|10 years ago|reply
Over half the images are incomprehensible or offer no insight.
>https://upload.wikimedia.org/wikipedia/commons/c/cb/Clickpat...
Including an unintelligible graph without an explanation to why it's necessary is bizarre. Even more so writing headers like "Responses to the scandal" and dropping in a stock photo of a gavel. It's like a pull quote, but even lazier.
There is some value in this article,
>Hoffman, the retired ad agency CEO who I quoted at the beginning, puts it better than I can:
>http://adcontrarian.blogspot.co.il/2013/06/the-75-billion-ad...
Even the author suggests to read this one instead.
[+] [-] newman8r|10 years ago|reply
Now I'm not saying that means anything... but it always felt a bit odd like... yes yes we know how bad it is, take your money and shut up and keep buying those ads
[+] [-] vannevar|10 years ago|reply
[+] [-] sjscott80|10 years ago|reply
I'm the author -- and I'm completely amazed. Thanks to whoever submitted this, and thanks to all the upvoters! I'll be going through the comments and responding when necessary. Feel free to AMA!
Oh, there seem to be a lot of interesting stories here from people who worked for ad companies and related firms. Feel free to post your comments on the original Moz article -- I'm sure the community there would love to hear about it.
[+] [-] lessthunk|10 years ago|reply
This is mostly a problem for unsophisticated players and exaggerated hype originating from players that support tracking view ability, etc.
[+] [-] mrweasel|10 years ago|reply
Aren't most customers of online ads unsophisticated users? The solution could of cause be to let a professional online ad company run your buying, but then you still don't know what they're doing with your money.
I believe that most of the people are running their online ad buys as if they where bus stops ads. That might be wrong to, but that's where the business needs to start.
[+] [-] logicallee|10 years ago|reply
[+] [-] sjscott80|10 years ago|reply
[+] [-] reilly3000|10 years ago|reply
I am in the paid media business, and I am not disinterested either as such. I feel strongly that advertising is the lesser of evils of the alternative is marketing messages buried deep in content and social spam.
[+] [-] sjscott80|10 years ago|reply
1. They do not sell marketing services. They sell marketing software.
2. I pitched my article to them, and they were very skeptical about the topic at first. Obviously, the issue can come across as very conspiratorial and sensational. But once I showed them all of my credible sources and citations and explained everything in-depth, they decided to publish the piece.
3. Again, I cannot speak for Moz, but my sense is that they will publish anything that they perceive to be very helpful and interesting for their audience -- digital marketers. They more that they do so, the more that their brand will grow among their audience and the more that people will visit the website to read the good articles.
[+] [-] zw123456|10 years ago|reply
[+] [-] bjterry|10 years ago|reply
[+] [-] davidbanham|10 years ago|reply
I founded, ran and sold a digital advertising company in the video space. We sold through various means including networks, direct sales and quasi-direct sales where we would engage a local syndicate to sell on our behalf. These were usually major digital publishers that used to be print publishers.
These people are moving a _lot_ of the volume in this industry. They're battling widespread redundancies and falling budgets. They are not attracting the cream of the crop and are in an unfamiliar industry (tech).
[+] [-] newman8r|10 years ago|reply
Guess it's so easy to sell to clueless business owners that taking 10 minutes to learn about the crap they are peddling isn't even worth it.
[+] [-] paulpauper|10 years ago|reply
$7 billion over meany years, while it seems like a lot, is still just a small amount of the total advertising online market
The figure may still be exaggerated and more research is needed. It could include things that are mistankingly called 'fraud' but instead if a misunderstanding of terminology
In a free market, online advertising fraud would depress prices as advertisers pay less due to worse results. If advertisers were getting 100% human traffic, rates would go up, making the ads more expensive.
So in the long-run it balances out. But on an individual level it sucks getting scammed.
[+] [-] geon|10 years ago|reply
The whole scheme was of dubious value for the advertisers, obviously. The ad networks were happy to have us, though.
[+] [-] taberiand|10 years ago|reply
[+] [-] codezero|10 years ago|reply
[+] [-] stickfigure|10 years ago|reply
[+] [-] alttab|10 years ago|reply
[+] [-] anti-shill|10 years ago|reply
[+] [-] fapjacks|10 years ago|reply