Addressing Ad Fraud and Brand Safety in Today’s Digital Landscape

Namely, companies want to know that their advertising is reaching the appropriate audience(s) and that statistics detailing the reach of advertising on different platforms are accurately reported. During this time of change for advertisers, to protect brand reputation, it is important that ads are placed on websites and platforms that align with a brand’s image. Given this, a key component of protecting a brand involves policing the digital landscape.

Here, we provide some background on digital advertising before providing additional information regarding various types of ad fraud, best practices, and some industry initiatives.

How are Ads Delivered in the Digital Landscape?

There are three primary players in a digital advertising transaction: the Advertiser, the Media Company, and the Agency. The Advertiser may work with an Agency to place advertisements on a digital platform owned by a Media Company (otherwise known as a publisher). In agreeing how best to advertise a product, the parties agree upon various terms including:

1. How the Advertiser will be updated regarding changes to a website.
2. The target audience. This considers consumer profiles that include age and income ranges, geolocation, and other information used to compile a profile. The targets can be created by targeting those based on keywords searched, interested, demographics, and may also target those who previously visited a site to create a bit of a “reminder” to go back and make that purchase.
3. Where ads can and cannot be placed. For this, the parties must consider objectionable content, the design of the website, competitors and more to provide ad placement that is both relevant and separate from content that is contrary to the brand.
4. General terms such as payment, term, etc.

All of these terms, however, are largely focused on two things: targeted distribution of advertising and money.  Of course, there are cookies and pixels and technology on the back-end making all of this work, but the first question remains, where’s the money?

In short, the money is in the metrics and can fluctuate based on the effectiveness of a Media Company’s placements and reach. An advertiser may measure the success of a digital advertising campaign in a few ways, some of which include:

• The “click-through rate,” which counts the number of people that click on an ad.
• Impressions, which counts the number of times an ad is displayed. As noted above, payment is based largely on impressions. For example, an advertiser may agree to pay cents to dollars per “click” a user makes on their advertisement. The more popular the platform and the better a media company is able to guarantee meeting a target audience using user profiles, the more expensive a placement is likely to be. Conversions, which refer to the number of people who complete the task that was the goal of the ad. For example, e-mail listserv sign-ups or requests for information.

For 2019, digital ad revenues were approximately past $100 billion. Advertisers are spending in the tens of thousands monthly on digital advertising. In short, the digital economy is booming. However, where there is a boom, fraud often follows.

What is Ad Fraud?

Ad fraud is deliberate activity that prevents advertising from being delivered to the appropriate audience at the appropriate time and placement. This type of fraud comes in various forms, including:

• Hijacking. This activity isn’t just for plane movies on television. A hacker can use malware to place ads for one advertiser where another advertiser’s ad should sit. Similarly, the cookies that send back information on an ad can be hijacked and injected with false information. This type of activity creates fraudulent statistics and results in payment without productivity.
• Click Fraud. This is exactly what it sounds like. A person—often using a bot—will have an ad clicked on numerous times to skew the resulting statistics and falsify the effectiveness of the placement.
• Pixel Stuffing. This involves placing an ad on a space that is so small, the average user would never notice it. The fact that the user failed to notice it; however, does not stop the platform from receiving credit based on impressions. 
• Ad Stacking. This is exactly what it sounds like. Multiple ads are stacked on top of one another.
• Geo Fraud. This involves the masking of IP addresses to falsify where users originate. In selecting a demographic, location is important. By changing this information, fraudsters can get credit for poorly targeted ads.

All of the fraudulent activity noted above can lead to a brand paying more money than it should for an advertisement that is not served as it should have been. To combat this, brands need a strategy.

Fighting Back.

Given the misplaced revenue that can result from ad fraud, a brand needs a plan for how it will fight back against this type of activity. Some helpful tips are:

• Use technology. There are various technical tools available to assist with monitoring and auditing ad placement and success rates. Some tools can also help b removing fraudulent ads before they can be used to influence results.
• Select payment basis wisely. One way to avoid being defrauded by click fraud is to base payment on conversions and not clicks.
• Select your platform wisely. Some websites have better reputations than others. While this will also be reflected in the cost for ad placement, it may also be reflected in the validity of the results they provide.
• Carefully curate placement details. It is also important to be careful when describing the types of ads, webpages, platforms and competitors to be avoided with ad placement. Failure to carefully describe limitations and control placement may result in ads placed in non-effective locations.

With each step forward into the new digital age, digital fraudsters fight to push back progress by invaliding information provided to brands. Brands have the power to take control of brand image and to protect their dollars by carefully targeting digital ad revenue.

For questions regarding how best to work with Advertising Agencies and Media Companies, please reach out to Eva Pulliam or the Arent Fox attorney with whom you regularly work with questions