Got Large Budgets You Need To Spend? Fraudsters Will Help You Spend It

Entertainment companies have to blow out their budgets before the launch date of a new movie. Fraudsters love that. They help out by generating enough quantities of ad impressions to absorb all that money — from display ads to video ads, mobile ads to CTV ad impressions. Whatever you need, they will magically create it for you out of thin air.

You get that those impressions are not seen by real humans right? There aren’t flocks of humans to go to websites, use mobile apps, and stream CTV a lot more to generate all those ad impressions on command, when you need them. But it is trivial for a botnet to deliver whatever quantity of impressions, usage, and streams you need to fulfill those media buys. The bots can make themselves appear to be whatever user (e.g. mobile vs Roku sticks), in whatever geolocation, on whatever site or mobile app you want to be buying.

The Covid-19 crisis caused many marketers to pause spend for a few months. Now they have unspent ad dollars they need to use up before the end of the year. We’ve already witnessed marketers lose their heads every year in Q4. Literally they “blow the top off” by lifting frequency caps, removing CPM caps, removing block lists, all so they can make sure they “spent it all” before the end of the year. They may even beg their agencies to make up something they could spend it on and pre-bill it so it shows up on this year’s books. If they couldn’t spend it all, they could lose their jobs or they could lose budget allocation next year. 

Damned misaligned incentives. Fraud loves you. 

But what’s worse this year is the confluence of the Covid-19 crisis, the elections, and Q4! There was pent up demand after several months of paused digital ad spending. The elections means much more money has been dumped into political ads; and all of those budgets have to be blown out before November 3. And Q4 is coming up where traditionally marketers have gone crazy with their digital spending anyway. Indeed this will be an extra special “White Christmas” for bad guys, one of the largest in recent memory. 

Already we are seeing surges in fraud. A new report from cybersecurity company CHEQ shows that political campaign spending in digital reaching nearly $3 billion in 2020. Their data also estimates that 1 in 5 clicks are not from humans, and greater than 10% of the spending is likely siphoned off by ad fraud. The use of VPNs or proxies to disguise users’ locations is also particularly prevalent; this is a way for fraudsters to disguise the bots and also to pretend that users are in the states or locations where the greatest spending is occurring — e.g. so called “battleground states.”

See: CHEQ “Bots and Ad Fraud in the U.S. Presidential Election 2020”

The surge in ad spending in CTV channels is equally at risk of ad fraud. Fraud rates have been estimated in the 20 – 30% range previously and the rate of fraud is likely to go even further up when the ad budgets have to be spent. Additional data from AppScience corroborates the rise in CTV fraud. “Bad actors are misrepresenting their activity by masking their locations with false IP addresses.” This is designed to siphon off ad budgets aimed at specific geographic locations. 

See: How Fraudsters Are Taking A Piece of the Presidential Ad Pie

And finally, data from White Bullet over the last 30 days observed that nearly a billion ad impressions went to sites that are “deliberately spreading disinformation” and “do not adhere to basic journalistic standards” as reviewed by NewsGuard’s pool of journalists. These sites were spreading fake news and making money at the same time from the overflowing political ad spending. Even ad dollars from political opponents end up on these sites without their knowledge. See: Joe Biden’s campaign has been unwittingly funding Breitbart all this time. Ad dollars from the following major advertisers and brands and their ads were screenshotted running on sites like Breitbart, The Gateway Pundit, American Thinker, Zerohedge, Russia Today, and many others. Many of these brands already pay for “brand safety” detection technologies. It does not appear that those services have stemmed the tide of ads funding misinformation, hate speech, and fake news.

Marketers, as we head into the final two months of the year, be extra cautious with your digital ad spending. At a time when other marketers are losing their heads so they can spend the rest of their dollars before the deadline of December 31, 2020, let them get ripped off by fraudsters making merry. This is a year when you don’t have to “spend it all.” The game has changed. Take a harder and closer look at your digital ad spending, and also the fraud detection and brand safety tech you’re paying for. Double verify what you can cut, because they are a waste of money and don’t work well anyway. Those cost savings drop straight to the bottom line — i.e. your profitability will be up, because you cut wasted spend.

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