Beating Corruption Online

Corruption is like a ball of snow, once it’s set a rolling it must increase.–Charles Caleb Colton, sportsman and writer (1780-1832)

I was in grammar school at the tail end of the Cold War and remember the explicit fear that at any moment, life as I knew it could be over. In 1983, I remember watching the film “The Day After“, which is about a nuclear attack on Kansas City, MO, and plotting ways I’d escape or perish if such an event took place in my backyard.

Fast-forward a couple of decades. The Cold War is a distant memory and despite September 11, I’ve become somewhat naive about corruption and misrepresentation. So when my client recently asked about click and impression corruption, I instinctively wanted to defend our industry and state that this doesn’t really happen. Except that I knew it probably did, especially in the current economy. As a proponent of behavioral targeting, I realize corruption has an even greater potential to happen in this space as we advertisers give up some control of media transparencies.

For all the other Pollyannas, then, let me define what click and impression corruption entails. In simple terms, an advertiser buys a certain amount of impressions or clicks, and based on reports and billings, she’s reassured that her impressions and clicks ran as planned. However, the impressions or clicks didn’t run as expected. Either a server overcounted the impressions fraudulently or an interested party clicked on an ad to elevate clicks, increase costs, and/or drive an advertiser or a competitor out.

According to Click Forensics, more than 17 percent of Web ad clicks are fraudulent, putting click fraud at an all-time high. When I started in digital advertising 10 years ago, most deals were purchased on a CPC (define) basis, so this was a real concern. When digital began to stand on its own as a credible medium and with the advent of third-party ad servers and site-side auditing, click fraud became less of a concern.

Recently, Pesach Lattin, CEO of Vizi, the interactive advertising sales representation firm, vowed to fight fraud in interactive advertising as the company sees new online mob rings being created. In an attempt to highlight a fraud ring, Vizi posted a video on YouTube, in which an advertisement is loaded with over 1,000 different hidden ads in an attempt to create fraudulent clicks to various search engines. This practice is costing advertising networks millions of dollars; it also devalues your campaign and leads to inaccuracy in your analytics.

Last month, a Vizi newsletter stated that fraudulent practices are out of control and include advertisers inserting malicious code into banners to redirect visitors, to offer pornographic material, to inflate impressions, or to hack into ad-serving technology. The matter is so serious that it has been forwarded to the FBI for investigation and can have long-term effects on interactive advertising, particularly for mom-and-pop advertisers who really feel it in their pockets.

With so many behavioral targeting networks popping up in the last few months, I can’t help but be paranoid about how they conduct their business. Therefore, as you go about doing business, be mindful of the following:

• Monitor baselines (traffic and quality). Regularly look at reporting to ensure there are no unusual traffic spikes that can’t be accounted for. Also look at site traffic to see if bounce rates are higher than usual or for any other deviances in conversion data.
• Monitor traffic. Pay attention to your sites’ linking URLs. If you think something needs investigation, speak with the property, such as a fraud investigation team that can help you determine if fraud occurred and what the next steps are. Furthermore, if you detect fraud, you can look at IP addresses or ranges (or geographies) to see if there are any unusual similarities. For example, if your audience is predominantly in the U.S., 70 percent of your traffic coming out of India would be a clear red flag that something is awry.
• Discuss fraudulent activity with your partners. Find out what your media partner’s or potential partner’s position is on fraud and how they safeguard against it. They should have a position on this that can be shared from the beginning. If they don’t, you may want to wait until they have worked this out on their end before you enter into a contract.

Also, many companies are certified by the Media Ratings Council (MRC), which means they abide by a strict auditing process, including log reviews for suspicious clicks and removal of them from their reports. One final thing to keep in mind: fraudulent activity is more common in certain categories, such as finance or mom-and-pop competitive sectors where either rivals or affiliates are trying to drive up competitive budgets (or trying to increase their share).

Have you been a victim of fraudulent impressions or clicks? Share your story.

Join us for a one-day Online Marketing Summit in a city near you from May 5, 2009, to July 1, 2009. Choose from one of 11 one-day events designed to help interactive marketers do their jobs more effectively. All sessions are new this year and cover such topics as social media, e-mail marketing, search, and integrated marketing. Register 30 days in advance and get a $40 discount!