Are Fraudulent Audience Metrics Killing Digital Advertising?

See, here's the tricky thing about digital: you can measure everything. Stuff that matters, stuff that's
irrelevant, stuff that's ridiculous. But it's all there.

Now some smart guys figured they could game this system, so click farms in Bangldesh - or Newark - cropped up to generate data. And other tricks of the trade emerged as the world convinced itself that the web had become the electronic equivalent of China in 1979: a vast, untapped market just waiting to be exploited by anyone with a slightly better mousetrap.

Who was really going to bother looking into this, they figured, because the net was The Thing and everyone was making money.

Well, except the advertisers, that is. And even they werent sure because trying to determine what works and what doesnt is still something of an art, even with all that data. But the lingering recession and the financialization of the economy conspired to put a crimp in this plan. That and relentless self-interest, that is.

Because the people controlling the money dont like spending it on items that dont generate a handsome return. They demand answers and accountability, at least from those using their money (resentful as they may be of those ingrates who attempt to hold them to the same standard). Until digital advertising can demonstrate it is producing such returns, its growth will remain below expectations. Which is why fraud-free advertising may become a featured benefit, not a moral aspiration. JL
 
Dean Harris comments in Venture Beat:

Digital media represents an industry where buyers routinely do not get what they pay for.
A few weeks ago, there was a piece in AdAge that spoke to the strategic advantages of selling online digital advertising fraud-free. It’s easy to be cynical about such an idea — it will never happen, people in the industry don’t want it to happen, it already should have happened — but that’s really missing the point.
Digital media represents an industry where buyers routinely do not get what they pay for. If you go into a bagel store and order a dozen bagels, you better damn well have 12 bagels (or maybe 13) in your bag when you get home. But digital media is a little different. Buy 10,000,000 impressions and you might get 7,000,000 impressions that actually can be seen by human eyeballs. To put it mildly, this makes your media buy less effective.
Fraud-free inventory versus standard inventory: which would you rather buy or sell? On the surface, more is better. There are billions of impressions available. Prices are coming down. And data can help us find unwanted impressions that really can be valuable. Many folks believe that low, low media prices reflect some degree of fraud built-in and that, ultimately, things will even out. But I don’t see it that way.
The Interactive Advertising Bureau estimates that 36% of all digital advertising impressions are fraudulent. These ads will never sell anything, nor will they influence anyone to feel better about your brand. But as a noted poet from Hibbing, Minnesota once said, the times they are a-changin’.
Today there is transparent technology that can help thwart online ad fraud in the time it takes for a hummingbird to flap its wings twice. This goes a long way in helping to realize the promise of digital media. It makes media buying more accountable. It gives marketers a stronger correlation between what they spend and what their media investments will yield, be it a brand lift or more direct sales.
Let’s say that 36% of the impressions you are buying are useless and you can eliminate them. The remaining fraud-free impressions will provide better results for your well-targeted marketing dollars. What will happen next is that those fraud-free sites, networks, or exchanges will perform better. And marketers will use them again instead of the those poorly performing fraud-laden options. Of course, better performing media can command higher prices and fraud-laden options will not.  To use an analogy derived from economics, it’s a virtuous circle. Invest in digital media. Get good results. Spend more on digital media. The equation is surprisingly simple.

Why Close Enough Is Not Good Enough

It’s clear that we have the technology and the resources to help solve the problem of online ad fraud right now. A larger question is, do we have the will and the moral imperative to do so? In my view, there is a shared responsibility to solve this massive problem. The long-term viability of our industry depends on it because a market that is built on the premise of “close enough is good enough” actually is constructed on a very shaky foundation.
It’s also clear to me that marketers want to know that their investments in digital media will yield results. Buying and selling media fraud-free will help both marketers and publishers yield more.