Piracy through the sale of counterfeit goods over the internet is rampant. While there is much controversy over the actual costs to brand owners whose goods are being counterfeited, there is no debate that marketers are inadvertently advertising on pirate sites and supporting counterfeiters.
The inadvertent advertising occurs largely as a result of the inability or failure of media buyers to police where their clients' advertising appears. In addition, counterfeiters are intercepting traffic to legitimate sites, diverting it, and selling counterfeit goods.
The result is wasted dollars spent by marketers and lost sales in legitimate goods. In this case, those wasted dollars are going into the pockets of criminals.
Both the White House and the FTC have expressed concerns and urged the marketing industry to find ways to police and eradicate the illegal activity.
In response, in late 2014 the ANA, American Association of Advertising Agencies and Interactive Advertising Bureau formed the Trustworthy Accountability Group (TAG) to broadly address ad fraud including piracy and malware -- code that is maliciously and often surreptitiously inserted into a website that disrupts or shuts down its operations -- (e.g., viruses, worms, and Trojan horses).
Among other initiatives, TAG is developing "Core Criteria for Effective Digital Advertising Assurance" and exploring the use of "Digital Advertising Assurance Providers" (DAAPs). DAAPs are independent companies that review and certify that programs used by marketers, media buyers and others in the ecosystem have adequate safeguards in place to address and prevent fraud, piracy, and malware.
In addition to exploring DAAPs as a preventative tool, it is imperative marketers ask their media buying companies what controls they have in place to insure their ads are not placed on pirate sites or other sites that fraudulently divert traffic. A marketer can also insist a blacklist be included on any insertion orders and request make-goods if ads are placed on those sites. Finally, marketers should ask their media buyers to audit companies in their supply chain where traffic on pirate sites might be facilitated.
Marketers should also be enlisting their media-buying companies to help protect them from bot fraud.
A 2014 study commissioned by the Association of National Advertisers and White Ops Inc. estimates that alarmingly high investments in digital advertising are wasted on non-human traffic. The study reveals that 11% of all display impressions and 23% of all video impressions are bots. The resulting costs are in the billions of dollars.
A Web robot or "bot" is a computer program or a set of coded instructions that automatically undertakes repetitive tasks on the Internet. Many of these tasks are critical to the smooth and effective operation of ecommerce because they complete tasks in nanoseconds that would take consumers hours to accomplish. Without bots, the Internet could not operate. But with the good comes the bad.
Bots can mimic human Web traffic and defraud marketers into paying for fake, automated non-consumer visits to websites and skew campaign reporting data. These bots are often not predictable and very difficult to discover, making them equally difficult to track and the corresponding fake data difficult to separate from the actual number of real consumer views. Many are operated by offshore criminal syndicates that siphon off marketer payments to media buyers for the non-human traffic they create. Another more subtle, but equally insidious consequence is that bots can target particular competitors in a given industry, adversely affecting their costs of advertising and corresponding profitability. These bots usually morph and move day to day. Detection and prevention is a serious challenge but not impossible.
Marketers need to contact their media buying companies and determine what they're doing to prevent bot fraud. Audits that pay specific attention to non-human traffic are critical tools. Marketers must also incorporate language in contracts pushing the liability to the media-buying companies who, in turn, can address the issue with their suppliers and advertising networks and publishers
There are ways to combat bot fraud, many being developed by consultants with lineage in cyber security and espionage. The Trustworthy Accountability Group may also be a resource to combat bots. While consultants and TAG continue to address the issues, marketers must be proactive and protect their investments by leveraging their relationships with suppliers and demanding accountability throughout the supply chain. As the industry moves towards viewable and viewed impressions which relate directly to consumer, eliminating bot activity will be critical.
Editor's note: This is the third in a series of pieces by Douglas J. Wood in which he puts seemingly unrelated yet converging developments about ecommerce accountability in perspective and explains why marketers need to prepare for unprecedented changes that lie ahead. Read Part One. Read Part Two.