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Fraud & Security

  • Fraud & Security

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Online advertising has created unprecedented opportunities for marketers to reach and target consumers, prompting privacy concerns among consumers and regulators. The depth and scale of the digital ecosystem unfortunately also makes it an attractive target for fraud. 

The law and where it stands for Privacy

The United States Federal Trade Commission (FTC) has been involved in oversight of the behavioral targeting techniques used by online advertisers since the mid-1990s.

In the United States, digital advertising is regulated by federal, state, and municipal laws, as well as self-regulation. At the federal level FTC regulates the content of digital advertising and disclosures made in privacy policies through Section 5 of the FTC Act, which prohibits “unfair and deceptive acts or practices.” At the state level, a wide variety of laws address the requirement of a privacy policy, including privacy policies, mandatory data security safeguards, and notice requirements in the event of data breaches. Self-regulation, such as the Digital Advertising Alliance (DAA) Principles, supplements federal and state regulation and requires additional commitments from participating companies.

Industry Fraud

 

Advertisers and marketers expect that the online content they output is viewed by real users; however, ads are not always viewed by real people. Instead, machines imitate actions to collect a charge; this is known as traffic fraud – a form of fraud in which systems are infiltrated by groups that then generate false clicks, visits, or views to collect profits.

According to IAB, 36% of all web traffic is fraudulent. It is also important to note that viewability concerns do not necessarily correlate with fraud or otherwise malicious activities.  

This causes a number of problems including:

•    Wasted advertiser spend – a WhiteOps study predicts that 6.3 billion will be lost globally in 2015
•   The value of publisher inventory is reduced, even for the most legitimate publishers
•    Gives the industry a negative reputation and attracts bad press to the companies involved, even those held harmless
•    Complicates campaign performance metrics, making it harder to optimize campaigns

Who performs traffic fraud?

Types of Traffic Fraud Fraudster Robots Botnet Botnode Digital Marketing Guide

How to prevent traffic fraud

•   Use a third party verification service to ensure your ads are being delivered to real humans
•   Measure by ROI and define your audience by type instead of clicks and impressions – increased sales and actually reaching your target consumer cannot be faked
•   Pay attention to the URLs you are running ads on and make sure your third party verifier is also reviewing
•   Establish financial "what if" scenarios with your publishers in case traffic fraud does become an issue
•   Keep educating yourself on the state of fraud and what you can do to prevent it.