What the Heck is Click Fraud? (And Why Financial Marketers Need To Care)

Is your financial institution getting fleeced when it runs online ad campaigns? Banks and credit unions are forking over huge amounts of money for "click fraud," and they don't have a clue. The problem is common, and the risks are real — particularly with online video. Here's what you need to know now.

“If we can’t fix fraud, all this other stuff doesn’t matter. This is the biggest threat we’re facing. We’ve got to work as an industry to find and drive fraud out of our business.”

The quote above came from an executive at a major bank, but the department he runs may surprise you. He isn’t a risk or security expert looking to identify patterns of credit card fraud. Instead, it’s Lou Pasklis, SVP of global media investment at Bank of America, speaking about how financial institutions are wholly unprepared to handle today’s online advertising world.

Nowhere are Pasklis’ concerns more prevalent than in online video, an industry that has significantly grown in popularity over the last several years. In rapidly changing industries, growth attracts unsavory and nefarious actors, in this case, schemers looking to defraud advertisers and publishers.

According to a report from Visible Measures, views for branded video reached 4.1 billion in 2015, a 19% increase in viewership from Q4 2014. Financial institutions like TD Bank have been spearheading the banking industry’s use of video, with initiatives like their “Surprise the Customer” campaign, which has generated more than 20 million impressions. With numbers like that, the allure of online video sounds promising, doesn’t it? Unfortunately, it is not all rainbows and butterflies. Digital video also suffers from significant ad fraud, with double the amount of bots affecting video ads than display ads, according to a study by White Ops and the ANA.

Digital video is growing, trendy, and lucrative, making it an ideal target for con artists. As such, there are three things marketers in financial institutions should consider before and during their forays into online video advertising.

1. Beware of Bots

Although video and display are completely different forms of advertising, they do have something in common: both are highly susceptible to click fraud, which is the most common digital scam around today, responsible for the loss of billions of ad dollars each year. In fact, White Ops and the ANA predict that advertisers will lose between $6 and $18 billion to click fraud in 2015 alone.

Click fraud takes several different forms, and occurs when bots visit sites and click on ads automatically. According to the IAB, over one-third of web traffic is non-human. Because it is still in a relatively nascent state, video is hit the hardest by fake traffic, with a whopping 25% of all video ad views found to be fraudulent. This invalid traffic is the result of internet surfers unknowingly downloading malware that hijacks their browsers, creates bots and visits sites.

Malware of this type can originate from a variety of sources. Publishers may be trying to make it seem like their site is highly-trafficked so they can lure advertisers into buying inventory at premium prices. Competitors may want to increase click-through-rates for pay-per-click campaigns, so they create bots to relentlessly click on items until the advertiser is forced to remove them for budgetary concerns. This doesn’t touch on the hacker with more nefarious intentions. For advertisers and publishers alike, the best way to avoid this is to closely monitor campaigns and watch for any abnormalities. Once detected, advertisers can apply a few different methods to remediate on their own, or hire on a third-party to help protect your campaigns.

2. The Great Viewability Debate

Viewability, an incredibly hot topic in advertising, is exactly what it sounds like — whether or not an advertiser’s ad is actually viewable on a site, and for how long. The problem is the number of definitions surrounding viewability.The MRC and IAB have come out with a standard that states a video ad must have 50% of its pixels in view for a minimum of two seconds; however, many advertisers disagree with this standard and believe it must be stricter in order to actually be effective.

In May 2014, the New York Times reported that 57% of all ads were unviewable. Although this number put a spotlight on the problem, the reality is that viewability was an issue far before the story came out. Developing technology to reduce the number of non-viewed impressions and introducing dynamic pricing that adjusts based on viewability should be among the industry’s highest priorities, and strides are currently being made in these areas. For example, earlier this year comScore lauched comScore Industry Trust, an initiative designed to “enable trusted programmatic transactions of quality advertising between buyers and sellers.” A key part of this initiative are the advertising metrics, called the “Trust Profiles.” These allow buyers to evaluate ad space quality and determine which sites have the most “viewable” ad impressions, or just as importantly, which have the most non-human traffic circulating through their space. The “Trust Profile” can then be inserted into programmatic ad buying software to ensure that only “high-quality” inventory is purchased.

3. Creating a Brand Safe Environment

Banks take significant, painstaking steps to ensure that they’re advertising on appropriate websites. After all, no one in the industry wants to see their logo on sites with unsavory images or messages. For example, imagine the reaction from someone like Jamie Dimon should he find out a Chase ad ran on an X-rated site. Programmatic buying and selling may be the future of advertising, but it is not flawless. Unlike the old days where a media buyer would directly contact a publisher about an ad placement, programmatic only requires advertisers to plug data into a network before it is sent to a group of targeted individuals.

That said, since the buyer is not directly interacting with the publisher, the buyer is often unaware of where their ads will end up. Sometimes ads end up on sites that do not reflect positively on the image of a brand, which can happen for any number of reasons. In some cases, advertisers may not have properly vetted the sites they’re placing ads on, which is particularly common in certain ad exchanges. In other instances, advertisers may be falling victim to ad injection, where their ads are being placed on a site and they don’t know it.

According to programmatic platform Yieldr, one-third of internet advertisers are concerned about their ads appearing on sites that aren’t brand safe. That number should probably be higher, since programmatic advertising is fairly new to financial institutions.

Because brands work tirelessly and invest heavily on creative, it’s imperative that brand messages only appear close to content that complements their image and message. Technology like iFrames can provide limited protection against this, but they only protect the content within them. However, fraudsters sometimes bury ads under several layers of iFrame, making it difficult for whoever is serving the ad to identify the actual page. Detecting the depth of iFrames and acting on data is crucial to creating a more brand-safe environment, and leveraging metadata to contextually scan pages and serve relevant ads is critical for ensuring that ads land in safe environments.

While banks have looked to capitalize on the dramatic growth and proliferation of online video, the growth in the number of ways in which advertisers can be defrauded has been equally staggering. Industry-wide, it seems as though every time one scam is eliminated, another pops up. To effectively navigate the ever-changing landscape, advertisers must perform due diligence to identify ad networks, exchanges and partners who are capable of protecting them from ad fraud and their brand from misuse.

Asaf Dan serves as VP of Operations at AnyClip and is responsible for Development Operations, Ad Operations and Data Analysis. Prior to his position at AnyClip, Asaf served as VP of Ad Operations for myThings, where he lead five teams: Project Management, Professional Services, QA, Studio and BI Analysts. He holds his M.S and a B.S in Computer Science from the Academic College of Tel Aviv-Yafo.

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