Marketers have always tried to find innovative ways to reach out and influence their customers. According to Magna Global, ad spend by marketers during 2018 was around $552 B and the numbers are rising every year. Channels and customer data available to make advertising decisions have exploded. Marketers are trying to uncover insights from huge data available from channels like connected TVs, social media, mobile apps, web, search, and videos to create highly targeted personalized ads for better ROI. In a recent TCS survey of the top 500 CMOs, 68% predict that by 2020, personalization of communication will be key to acquire new customers. But only 57% of content and customer platforms are automated to deliver on personalization. Personalized advertising will be one of the key strategies for customer acquisition. While this presents unique opportunity for marketers to have valuable interactions with customers in a scalable manner, the lack of transparency in the advertising ecosystem is a big challenge, resulting in ad frauds.
Advertising fraud has skyrocketed in recent years with more transactions conducted through programmatic buying and real-time bidding. Statista estimates that ad fraud will grow over 230% by 2022 to hit $44B. Fraud results from presenting false impressions, clicks, unauthorized inventory selling, domain spoofing, etc., by scamsters to gain money.
Causes for advertising fraud
Complexity of the ecosystem
What used to be a small ecosystem of marketer, agency, and the publisher has now become complex. We have intermediaries like ad exchanges, ad networks, demand and supply-side platforms (DMPs and DSPs), and data management platforms. This complexity along with cumbersome processes has resulted in less visibility and accountability of dollar invested. Out of every $100 spent, $50-60 is being charged by the complex group of intermediaries. With little visibility customers, publishers, and advertisers are at a loss. Advertisers have minimal control on placement and decision making based on value created by different intermediaries.
Technology security gaps
The emergence of new channels and formats for ad delivery has seeded several security gaps, which are regularly exploited by fraudsters. Bots, specifically created to take advantage of these loopholes, sit on innocent users’ devices and mimic human behavior by automatically browsing webpages and clicking on ads. Publishers are struggling to find new ways to detect and stop them. In-app advertising is also exploited as there are weak blocking controls. Since scamsters deploy new mechanisms frequently, no static solution will be future proof.
Lack of credible data insights
Marketers depend a lot on agencies to run their campaigns. They have little verifiable insights on data used to define requirements and performance from different media. The quality of reporting is weak and traceability is low resulting in incorrect campaign performance pictures for advertisers and bad experience for customers. The data is also scattered and presented in silos, which makes it difficult to analyze it across campaigns and improve advertising effectiveness.
How can this be addressed?
It is important to acknowledge that there is a problem and it is not limited to only big enterprises with a large ad spend. Technologies like Blockchain, AI, and Machine Learning, can help design solutions that can address this problem. Start with assessing your current advertising landscape by deconstructing and mapping the players, processes, data, channels, and technology. This will enable you to identify value gaps, arrive at a business case, and roadmap to close them and realize new opportunities. Assessing data is important as this will form the backbone of any new solution.
Supply Chain Visibility
Subsequently, identify and bring all operational transactions on one platform (using Blockchain), thereby providing visibility to ad inventories and how different parties are being paid. This will enable advertisers to track the media to spend the lifecycle accurately and optimize. Automation can enable the execution of outcomes like payments based on predefined logic. The consensus from all intermediaries to bring their operations on one platform is important here.
Campaign Performance Verifiability
According to one recent study, up to 13% of all desktop display ad impressions in H2 2018 were fraudulent. Robust data reporting will require campaign performance data to be collated from various sources. Machine learning and big data solutions can help weed out fake inconsistent data. This can then be published on a single platform that can be reconciled to verify view counts, signed views, clicks, and conversion data. All the metrics can be verified before a transaction is being made.
Customer Targeting and Privacy
Marketers can become more efficient by building customer profiles based on information willingly shared by customers. This improves communication relevance by verifying the genuineness of every user. Further, it can help to move consumers’ and advertisers’ data from current advertising platforms with multiple ownerships to decentralized networks (using Blockchain) where data will be encrypted and not accessible. Network participants can get insights from each other’s data by asking for it without getting the actual possession.
Unilever Japan recently announced a successful advertising campaign run on Blockchain with end-to-end operations across all players to reduce ad fraud and increase accountability. It independently reconciled participating players’ fees with agency and found it to be 100% accurate.
If your organization is seeking to transform advertising operations, drive personalization, and champion customer privacy then it is time to analyze the current advertising and marketing TOM (target operating model), governance, and network value. Identify the areas resulting in high leakage or has less visibility and high risk. Prioritize solutions based on speed and value. This will help to develop a transformation roadmap and build capabilities using innovative technologies. You can expect a simplified value chain and the reduced role of intermediaries, better targeting, and at scale relationship building with your customers. Your advertising dollars will work harder for you.
About the author(s)
Amar is a Lead Consultant for Customer Experience (CX) Transformation within our Consulting and System Integration practice at TCS. Amar is a seasoned Digital Strategy and Interactive Marketing Professional with diverse experience of over 11 years in leading transformational programs and designing innovative solutions powered by digital and cognitive for global brands.
Amar has proven track record in creating business and experience strategies supporting Digital Transformation. He has delivered numerous engagements leveraging Strategy Consulting and Design Thinking to solve complex industry and business-related problems. Amar has extensive experience in Marketing Automation, Digital Marketing, Advanced Analytics, Machine Learning and Marketing Optimization.