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Mobile engagement is automakers' best weapon to combat ad fraud

U.S.-based automotive advertisers will waste more than $540 million this year on fraudulent online and mobile ads, according to the latest Quarterly Bot Traffic Market Advisory report from Solve Media. Given that the auto industry is the second-largest online advertising buyer and wields tremendous influence over the digital advertising ecosystem, it has fallen to the industry to mobilize the advertising industry against fraud, some observers say.

?Mobile marketers need to find ways to build humanity and engagement into their plans to limit risk,? said Ari Jacoby, CEO and co-founder at Solve Media. ?With such a big investment in large-scale mobile advertising, we don?t see the bad guys backing off any time soon.?

Signs of fraud
The report said 22 percent of traffic to automotive-related sites is bots. Mobile traffic to automotive sites showed signs of fraud as well, with 13 percent acting suspiciously and 6 percent confirmed as bots.

Last year, fraud cost mobile app advertisers in general an estimated $1 billion, or 12 percent of the US mobile ad budget. Fraud tends to fall into two categories: bot-driven, which employs bot networks or paid users to initiate fake ad impressions and clicks, and placement fraud, which manipulates visual layouts of ads to trigger ad impressions and unintentional clicks from real users.

Mobile application publishers are seen as having an incentive to commit fraud since ad networks pay them based on impression count, click count, or combinations of both.

The auto industry is rife for fraud because so much money is invested in advertising and car buyers are particularly active in the mobile space. In 2013, 80 percent of car buyers spent an average of 18 hours online researching models and prices before purchasing, according to Google data. A Placed study indicated that 71 percent of consumers used a smartphone during the car buying process, including 63 percent who used one at a dealership.

As ad dollars increasingly shift into the digital realm, the automotive industry is projected to trail only retail in digital ad spending by 2015, according to eMarketer.

Mobile less afflicted
Curiously, Solve Media found that auto ad fraud is less rampant on mobile than on desktop ? just 6 percent on mobile versus 20 percent on desktop.

?We believe that it?s simply easier to run malicious programs from desktop computers than mobile devices,? Mr. Jacoby said. ?That said, not all of the traffic identified as mobile is in fact from a mobile device. Malicious hackers are increasingly writing code to masquerade as a mobile user in order to take advantage of lower security levels imposed on mobile users.?

Notwithstanding mobile?s smaller numbers, the threat is expected to grow as more eyeballs and dollars move to mobile devices. ?We?re not saying that the numbers will grow to 40 or 50 percent necessarily, but mobile marketers need to find ways to build humanity and engagement into their plans to limit risk,? Mr. Jacoby said.

?While many progressive automotive advertisers work to optimize their cost per conversion to a point that it makes financial sense, many digital ads are still bought on a CPM or CPC model, which can easily be gamed by bots committing fraudulent impressions and clicks.?

Favorably positioned
The industry?s spending power positions it to favorably influence the fight against auto-ad fraud, by becoming better informed about the quality of online traffic and striving to verify its audience?s humanity, Mr. Jacoby said.

Dick Bennet at ImServices, a provider of interactive advertising audit services that belongs to both the Alliance for Audited Media and the Mobile Marketing Association, said inefficient digital advertising has been a problem for 20 years.

?Just like with other media, publishers are always trying to expand their inventory to increase revenues,? he said. ?That?s business. There will always be new ideas to make money, and some of those ideas will be on a slipperier slope than others.?

Intelligent buyers recognize that a broad spectrum of publishing exists, ranging from the publisher who sells viewable ad space seen by real people with an accurately specified target audience, to the out-and-out fraudster who sells nonexistent or invisible inventory, or robotic traffic, Mr. Bennet said.

?Quality buyers recognize these different qualities and price inventory accordingly,? he said. Mobile measurement guidelines established by the Interactive Advertising Bureau, Mobile Marketing Association and the Media Rating Council require filtration or removal of non-human traffic.

Fraudsters follow the big-money trail in auto advertising.

MRC standards also call for a system of internal controls to ensure that measurements are accurate, reliable and consistent.

?If a guy can make an extra buck by pushing the envelope, he will,? Mr. Bennet said. ?Yes, innocent mistakes do happen, but let?s face it, greed is at the root of most evil. Some of these folks make a lot of money selling sleazy or fraudulent inventory.?

While quality agencies refrain from working with technology or inventory providers who do not participate in the IAB Quality Assurance Program, or who exhibit poor performing inventory, it is impossible to safeguard against violators, since agency trading desks may be participating in the wrongdoing, Mr. Bennet said. None has been certified or accredited according to IAB, MMA or MRC standards, he said. 

Follow the money
?The bad guys follow the money,? said Tobin Trevarthen, CEO and founder of business-development company Spatial Shift. ?The bad guys generally go to the easiest route possible...meaning less friction. So, if sites have not protected themselves with some kind of intelligence layer they will be susceptible to the scams and techniques deployed by the bad guys.?

Mr. Trevarthen also is the former vice president for business development of Anchor Intelligence, a predictive analytics start up in Silicon Valley that focused on solving click fraud and traffic from 2008 to 2010.

Jamey Power, whose family founded Westlake Village, CA, marketing research firm JD Power and Associates, said the industry has to be worried about the legitimacy of online and mobile advertising, given the bot inflated data. 

?Naturally businesses, dealerships or the major OEMs want to be efficient and not waste ad money so the industry needs to address the issue lest there be a backlash from the advertisers,? he said.

Final Take
Michael Barris is staff reporter on Mobile Marketer, New York.