THE SECRET TO BEATING LOCATION AD-FRAUD
Advertisers will lose $42 billion of ad spend this year to fraudulent activities committed via online, mobile and in-app advertising. This is a 21% increase from the $35 billion lost to ad-fraud in 2018.
In recent months we have seen brands including P&G and Unilever declaring that enough is enough. They want more transparency and greater visibility over where ads are placed.
However, the conversation around location ad-fraud has been somewhat neglected. By 2022, location-targeted ad spend is expected to hit $38.7 billion in the US alone. Yet a significant chunk of that spend — anywhere from 30 to 80% — is being wasted on inaccurate, poor quality, and fraudulent location data.
Businesses that rely on the effectiveness of location-based advertising to drive customers to their door are being hit particularly hard. This is because they invest the most in location-based targeting. Automotive and retail industries, for example, use location data to drive foot traffic to their physical stores. They target users within close proximity to the stores with relevant mobile-based messaging to drive action.
Fraudsters have been taking advantage of the lack of attention location ad-fraud has been getting, implementing increasingly sophisticated techniques to con brands and agencies.
Lessons from the past
If we look back to when programmatic was introduced, brands and publishers saw it as a godsend at first. Brands could more easily identify and target their desired audiences, while publishers could more efficiently monetize their inventory.
However, as time went on, bad actors realised just how little oversight there was. Industry watchers and publications flagged how much money fraudsters were stealing from brands, but concerns were simply brushed off.
While this might seem like a strange thing for key stakeholders to ignore, the fact is that they were making big amounts of money from programmatic advertising . What was in it for them to shine a light on the problems with their own tools and practices? No agency employee or brand marketer wanted to be the first to raise their hand and say, “Oops. I may have wasted millions on fraudulent advertising and targeted the wrong audiences.”
Duplicating demand for transparency
Industry change didn’t happen until we saw high-profile scams like Methbot, and when brands started calling for action. The rallying call from P&G’s Marc Pritchard about the preposterous amount of money the business was wasting gave his peers the green light to start asking questions.
Today, we have verification and ad-fraud detection and prevention tools for every part of the digital ecosystem. We have regulation in place. And whilst it’s not yet perfect, it’s working. Now it’s time to do the same for location-based marketing and the data that supports it.
Taking pride out of the location data dilemma
Location data losses are more than enough for people to stay quiet out of fear of repercussions. However, the industry is still in relatively early days in terms of maturity, so no one should feel like it’s too late to start asking questions.
Suggesting that your team gets serious about location data quality isn’t an acknowledgement of a misstep. It is a proactive measure to get ahead of a growing problem. Do encourage openness and transparency now, before you get a call from a concerned client or boss.
And that call will come. The media and the industry are getting wind of location data shortcomings. Almost daily, business news outlets and trade publications are sounding off on location data tactics, privacy issues, and fraud.
Standing up to ad-fraud
Marketers, it is not your fault that bad data is on the market. But it is vital that you understand the complexities of location data collection and distribution. If you haven’t already, start interrogating how your partners source and verify the location data they are using to build your campaigns. How successful have they been at targeting your desired audience?
As time marches on and losses mount, it will become harder to raise your hand and admit you were complacent. So, let’s not wait for a Marc Pritchard equivalent to declare enough is enough. If change won’t occur until brands speak up, then let’s start that rallying cry right now.
By Warren Zenna – May 2019
Warren Zenna joined Location Sciences as President, US in 2019 to launch and position the company for success in the region. Warren spent 25 years in seminal executive roles at Havas, Publicis, iCrossing, IMC2 and Zeta Interactive. His primary mission is ensuring all marketing stakeholders who depend on location data are able to verify the validity of the data and maximize the value of their location-based investments.
If your organization uses location data, contact us to learn how improved accuracy and quality reduces waste and produces better marketing results and outcomes.