When it comes to how much marketers lose to ad fraud, no one has a bleaker assessment than Augustine Fou.
How bleak? “Between 1 percent and 100 percent. There are no 0 percent fraud campaigns, that just means you’re not seeing it,” says the former marketer turned ad fraud researcher.
“I indict the big holding companies,” Fou says. “They are there to maximize their own margins and profits, and those profits are driven by the volume of ads that go through their systems.
“The people who do work at the media agencies are conscientious but, when they bring something suspicious to their bosses, they are told to shut up,” he says.
Marketers are also part of the problem, says Fou. “A marketer’s job is to spend it all,” he says. “The term I use is ‘FOFO,’ or ‘fear of finding out.’ Marketers literally do not want to know where there is fraud, so they buy reports that tell them there isn’t fraud. That’s why they are helping perpetuate the problem.”
What is your background?
I’ve been a digital marketer for 23 years. In 2012, I left Omnicom to get back to my own consulting practice, and I did analytics for my clients and saw some really strange things.
What was strange?
Thirty percent click-through rates. Fifty percent click-through rates. I’ve been in the industry long enough to know those just aren’t real—humans just aren’t that interested in your banner ad. I asked why that was happening and, long story short, it’s caused by bots that click on stuff. It’s fraud.
What did you say to clients after uncovering fraud?
A lot of times they didn’t know it was happening. They get monthly rolled- up reports from their agencies saying everything was cool, or that there was “so much engagement” on their campaigns. There are other problems, especially with young marketers.
We’re seeing a lot of young marketers come out and they control a lot of budget. For them, their entire career all they’ve seen is 20, 30 or 40 percent click-through rates. They haven’t been doing digital marketing for 23 years. I can tell them that I’ve been doing digital marketing longer than they’ve been alive. Some of these young people will see 30 percent engagement and say, “Let’s shoot for 40 percent.”
If CMOs get reports showing 40 percent click-through, then look at conversions or performance, wouldn’t they realize the numbers don’t add up?
What if they were actually considering the click-through-rates as performance? There are many brand advertisers that are focused on reach and frequency. They’ll say, “We don’t measure for performance because we can’t track the sales anyway.” So what they do instead is expand their reach. Those types of marketers are most subject to this fraud because they want more volume, and where do you get more volume? You get it through fraud because they are the ones filling that void.
Can you elaborate?
The number of humans spending more time on the internet, social media and mobile have all plateaued since 2013. Yet the number of ads continue to skyrocket. So there’s a disconnect between the number of ads being bought and sold in digital now to the amount of time a human could possibly spend on all of their devices at the same time.
How much is lost to fraud each year?
A very large amount. I won’t say a dollar amount because I don’t have complete data. But fraud is at an all-time high because there are other channels where fraud can’t be detected.
Most vendors are measuring fraud on web pages. But we are now seeing mobile apps cheating in broad daylight. There are keyboard apps, alarm clock apps, loading the same amount of ads in the background for every hour of the day. That’s just not normal.
What about those who say fraud is down?
When the ANA-White Ops report came out, it said that fraud was down. The ANA came out and quickly said, “We’re winning. Fraud is at an all-time low.” And that’s what gets carried through in the headlines. But the ANA doesn’t highlight the caveats in the White Ops report, so when I push back on the ANA-White Ops report, it’s an indictment on the ANA. White Ops did its job, but the ANA didn’t share its caveats.
[Editor’s note: Those caveats included the inability to measure “newer frontiers such as mobile, over-the-top streaming,” according to the White Ops report, which said that mobile video was only 29 percent measurable and the most measurable ad type was desktop, at 60 percent.]
Critics say you sell a doomsday outlook to bolster your own business.
I charge a retainer. It is the same amount whether I find 1 percent fraud, or 99 percent fraud. That’s different from the fraud detection companies, which get paid more based on how much they measure. In some cases, they staked their earnings on how much fraud they are going to find. I make money sharing my knowledge, and I teach my clients how to fish by showing them what to look for in their analytics. Fraud detection companies ... keep everything in a black box.
Give us a tip on how to fight fraud.
Turn off your ad spend.
Procter & Gamble stopped spending $200 million in digital and saw no change in business outcomes. Chase reduced the number of sites that showed its ads from 400,000 to 5,000 and saw no change in business outcomes. Turn off digital spend for a week, see if there’s a change. If not, leave it off for two weeks or three weeks.