by Erik Sherman
When 19th century retailer John Wanamaker famously said that half of his advertising was wasted but he didn’t know which half, he was talking about effectiveness.
These days, many marketers could say half their marketing dollars were wasted even before anyone had a chance to see them.
Online advertising has developed a terrible reputation for good reasons. Fraud and waste burn through billions a year in wasted investment. Corporations are wondering how to make their ads pay off. The answer is with difficulty.
Layers of technology intended to create unwarranted advertising spending combine with byzantine labyrinths of service providers that are huge expenses for advertisers and publishers alike.
On the advertisers’ side, outright fraud is huge in scale, with an array of technologies intended to create false ad impressions, which advertisers pay for even though they get nothing from it.
Ads knock, nobody is there The fraudulent techniques include overseas click farms paying people to repeatedly click on ads, software bots that pretend to be consumers, and large numbers of ads jammed onto fly-by-night webpages to maximize charges. “Using all manner of data, people using fake bots, fake websites, fake attributions—[the fraud is] on the order of $30 billion annually,” said Roberto Cavazos, director or risk management and cybersecurity programs in the Merrick School of Business at the University of Baltimore.
Over the last few years, some big business names experimented, cutting back on digital ads to see what happened. Proctor & Gamble spent nothing on digital ads one year to see what happened. “They didn’t miss any sales,” Cavazos said. “There’s a lot of big players that have a sense things are not right.”
“I would say advertisers who are funding this system aren’t the only victims,” said Keri Bruce, a partner at law firm Reed Smith. “The publishers are victims here too because they’re not getting all of the dollars they should be…
Read More: How Companies Can Deal With Rampant Digital Ad Fraud