Say “No” to Digital Advertising. Why? Because of Ad Frauds

Digital analysts compare the online crimes with more traditional forms of crime such as drug peddling and guns smuggling. But they observe that it’s easier to steal ad dollars than to move drugs and weapons around.

By Rakesh Raman

You can’t stop those advertisers who want to live in a fool’s paradise and squander their money on digital advertising.

Most of them blindly trust their digital ad agencies or media buying agencies that are fleecing the advertisers day in and day out by providing false, fabricated data.

Market estimates suggest that today the total digital ad market is of about US$ 50 billion (including Web and mobile), which is roughly 12% of the total ad spending. But nearly one-third of the dollars spent on digital media are earned by fraudulent maneuvers.

A report by The Wall Street Journal estimates digital advertising revenues to touch $50 billion this year. But it says one-third of online traffic is bogus as marketers encounter fraudulent visitors and rampant fraud.

Digital analysts also compare the online crimes with more traditional forms of crime such as drug peddling and guns smuggling. But they observe that it’s easier to steal ad dollars than to move drugs and weapons around.

While it is still a fledgling segment in the online industry, the digital advertising frauds are already in excess of a whopping $15 billion in a year. There are various stakeholders in the burgeoning online crime syndicate.

The stakeholders in the online ad mafia are:

Ad Agencies – Most ad agencies cheat gullible advertisers by showing concocted data about their ad impressions and impact.

Ad Exchanges – They use software scripts, adbots or spybots to fraudulently improve the performance of ads in the CPC as well as CPM ad models.

Mobile Networks – They allow ad fraudsters to use their networks for m-spam (mobile spam). More than half of the ads delivered on mobile devices is by way of spam, which can’t help advertisers.

Social Networks – Social networks like Facebook, Twitter, and Linkedin tell blatant lies about the number of their active subscribers and the engagement levels. Actual data is not even a fraction of their claims.

Publishers – Online publishers who run news or other content sites are willy-nilly part of this uneasy arrangement, as they display ads delivered by deceitful ad agencies and ad exchanges.

Market Research Firms – They equip the dishonest digital ad agencies with armchair research findings and inflated data that is used to entice the advertisers.

Advertisers – As advertisers are financially supporting the online ad criminals, they are also part of this dangerous racket.

Let’s now discuss the modus operandi of the online ad thieves who are spoiling the market. Ad agencies are the biggest culprits in this dirty game. Instead of educating the advertisers, they prefer to fleece them.

As there is no reliable ad monitoring mechanism and impact measurement method, advertisers trust the agencies blindly. They are paying even for those ads, which are not being displayed. They are also paying for those mobile ads, which are delivered as spam without taking the consent from the mobile user.

Similarly, ad exchanges – mostly in connivance with digital ad agencies – are displaying the ads on those sites that are not relevant for brands. For example, to make a fast buck, ads are displayed on porn sites that attract high traffic.

While online auditing firms can detect the programmed frauds happening about a particular ad campaign, ad exchanges and digital agencies have gone a step further to conceal their thefts.

Now, they are employing armies of humans at cheap rates particularly in poor countries. They keep clicking ads or keep visiting various webpages where ads are displayed. This is to fraudulently increase the ad revenues under CPC or CPM ad models and consequently dupe the advertisers.

As regards publishers and social networks, there is not even a single reliable analytic service that can accurately measure the number of subscribers, traffic, or the engagement levels on their sites. These are actually their own false claims circulating in the market – on the basis of which advertisers are tricked into paying the higher ad rates.

For example, Facebook claims it has over one billion active users or something. These are only Facebook’s claims that Facebook and ad agencies use to extort more money from advertisers. There is no neutral, knowledgeable, and reputed agency that can vet Facebook’s claims. And the same is true for other site owners that provide inflated data about their sites’ performance.

Plus, the bogus online subscribers and fake social media followers are readily available on the web at cheap rates. Social networks and publishers buy them to impress the advertisers and earn more money from them.

And if advertisers are not ready to get educated and allow themselves to be deceived by the ad crooks, even God (if he or she exists) can’t save them. Lesson for advertisers: Do not spend even a single penny on digital, online, mobile ads. And use the money saved on creating good content around your brand and deliver it through free digital media properties including your own website.

This article is a sequel to my previous article “When Online Ad Crooks Invaded My Websites…” where I said I will discuss the modus operandi of the online thieves.

By Rakesh Raman, the managing editor of RMN Company