15 ms·

Banner “Fraud” Doesn’t Matter

66 points by nkurz 11y ago

Barraketh 11y ago
As someone currently working on fighting advertising fraud, the article premise is wrong. Specifically, there is a significant amount of wasted money that currently goes to fraudsters (usually through RTB exchanges). If we are able to eliminate all of them, then that wasted money will be left to split amongst the legitimate players, which is good for everyone. So yes, CPMs will go up, but the value of each impression will go up even more.
- matt_morgan 11y ago
  He does say that. He just doesn't trust you to get the price right. I.e., he believes that in "fixing" advertising fraud, the CPM will go up more than the value will go up.
JoshTriplett 11y ago
I can't help but wonder why all advertisers don't switch to payment by click-through-and-buy, rather than just by click or impression. You can't fake that.
- brandnewlow 11y ago
  Ad networks won't go for it outside of very specific and narrow use cases (high-end ecommerce) because they don't have control over the quality of the landing page, a crucial element in whether the user converts or not.
  - hamax 11y ago
    Exactly. Ad networks will optimize for cost per acquisition but won't charge based on it since they don't control that part of the pipeline. If advertiser's landing page is down for example, the loss shouldn't fell on the ad network.
    - moron4hire 11y ago
      It's not really a "loss" though. It's not like there is a significant marginal cost to serving static content.
      - hamax 11y ago
        Ad network can mean many different things. In case of facebook where their ad network controls the whole process (SSP + Exchange + DSP) they would only lose, besides the infrastructure cost, the opportunity to make money by serving another ad. But for the majority of ad serving world it's not that simple. If you're for example a DSP and buy ad impressions from exchanges via real time bidding, you have to pay for the impression even if you can't charge the advertisers for it. So you lose money twice. You don't serve another ad which would make you money and you have to pay for an ad that won't be paid for by the advertiser.
        moron4hire 11y ago
        Meh, crocodile tears. If they shouldn't have to pay in the rare case that my site is down, then I shouldn't have to pay in the more-common-than-not case that there is no real person behind the click. And note that I have an incentive to keep my site up, whereas they apparently have no incentive to keep click-fraud down, evidenced by the fact that it's more than 50% of the case.
- lazyjones 11y ago
  Because most advertising isn't for quick one-time online purchases.
- calbear81 11y ago
  It doesn't matter how you decide to buy/pay for your impressions because it gets normalized by their ad system to an effective eCPM (revenue per 1000 impressions). Let's say you only want to pay via a "click-through-and-buy", after a certain number of impressions and clicks they will have a benchmark for how much in commissions were paid. They take that number, divide by impressions/clicks, and then have an eCPM to rank you by. If the eCPM achieved by allocating impressions to your campaign is less than via traditional CPM or CPC based buys then you will get lower allocation and thus the system optimizes you out of inventory.
- Programmatic 11y ago
  That seems like a harder thing for the advertisers to measure than impressions or click-throughs and incentivizes the sponsor of the ad to lie about units sold.
kjjw 11y ago
"Honestly, at first when that article got posted I thought you were going to talk about something else: like maybe how the entire dream of the internet is a bit of a fraud for advertisers in general." Dream of the internet (presumably they mean dream of the web) was not initially one of advertisement.
- cokernel 11y ago
  > dream of the web This phrase always reminds me of Abigail's WWW Dream: http://www-users.cs.york.ac.uk/susan/int/abigail.htm http://www-users.cs.york.ac.uk/susan/int/abigail.htm
- anon1385 11y ago
  It's interesting to look back on how idealistic the early web was: http://www.arachnoid.com/freezone/ http://www.arachnoid.com/freezone/ I think it's actually still the case that the best quality content on the internet isn't on commercial sites.
- moron4hire 11y ago
  I'd really like to know what he meant by that. I have a feeling I'm not going to like the answer.
ErikHuisman 11y ago
Banners might be awesome but banner fraud isn't. Banner fraud is funding the people we want off the internet. So it still needs to be fixed.
- dmarti 11y ago
  Exactly. Ad fraud is not just a waste of energy (like TV ads playing to no viewers). It supports bad stuff on the Internet at the expense of good stuff. * Ad fraud is now the number one malware payload. * Low-quality impressions show up on copyright infringement, comment spam, and other problem pages. * When advertisers buy programmatically on markets that include both legit and fraudulent inventory, publishers pay for fraud in the form of lower CPMs. More in response to the original article: http://blog.aloodo.org/posts/thank-you-for-supporting-fraud/ http://blog.aloodo.org/posts/thank-you-for-supporting-fraud/
stevenh 11y ago
Where can we read the confessions he's responding to?
- deleted 11y ago
  [deleted]
jcrei 11y ago
Banners these days are good for "Brand awareness" and not good for generating traffic for a website or to deliver actual actions on a site (purchase, sign-up, etc). Having said that, it is also true that banner fatigue is a real thing, and that lots of people already "tune out" of the traditional banner areas on sites.
sudioStudio64 11y ago
I detest advertising. It's literally designed to undermine reason and supplant critical evaluation of ones needs and priorities. As for web advertising, maybe I was the last person on the planet to figure this out but sometime late last year the web just became unusable on most popular news sites. Popover ads that come up before you can read the content and multiple large ads inline with the content and that "no mans land" on the right. I seriously hope there is a way to make MS Edge default to the "reading view".
- SyneRyder 11y ago
  Advertising & pop-ups on popular news websites are great! Because they remind me that news sites have zero (or near zero) value, and I should be getting back to work instead of wasting time reading them. If they really had value for me, I'd be signing up for a paid subscription & then they wouldn't have to run ads. Some advertising is good. I am so glad that Harvest advertises. I know I saw it repeatedly advertised on Daring Fireball, so I was aware of it by the time I needed something like it, and I'm super happy with it.
- moron4hire 11y ago
  No, people want to buy things, and there are a lot of things competing for their attention. Advertising, at its most basic, is just how we inform potential customers that we even exist. Yes, some (a lot? Most?) advertisers get way out of hand. But advertising is not itself evil. It's a tool that may or may not be misused.
  - sago 11y ago
    > It's ... designed to ... supplant critical evaluation of ones needs.... > No, people want to buy things That's rather the point. The desire to buy things is driven not by critical evaluation of need, but by psychological trickery that falsely associates buying stuff with a whole range of actual needs. If ads promoted critical evaluation of a person's needs in relation to available products, that would be a different thing entirely. It is quaint, but I can't help think naive to suggest that the core of advertising is informing customers, and the psychological trickery is 'misuse'.
gergo_v 11y ago
Disclosure: I also work for a company that specializes in fighting advertising fraud. I think this is either willful ignorance or a complete misunderstanding of the fraud ecosystem. It's not about click through rates by a long shot. But since the OP's main argument seems to be how the bigger ecosystem of online advertising already accounts for fraud, let's take that further. With this attitude, he's effectively saying that: - They're okay with indirectly sponsoring the spread of viruses and trojans (rationale being: it's cheap!) - They're okay with paying some dudes with some smart scripts (eg. the fraud mechanisms) the same amount of money as hard-working content creators and publishers - And they don't care enough about the budget either. Accountability is apparently a fairy tale in this context? The industry is under heavy fire regarding this subject as it is, and I'm not sure whether this attitude is going to further the conversation.
TomGullen 11y ago
If you've got a team of smart people willing to drop $500k on a banner campaign and you can accurately measure the results and it's still worth it with all the fraud, good for you. If you're a mom and pop store looking to spend $500 on advertisements they should be made aware there's a good chance they will be defrauded unless they know what they are doing.
- morley 11y ago
  I think the article's point is that, if you compare banners to physical billboards, then you have the same issue but the billboard still works. So even your theoretical mom and pop store is getting value out of the impressions.
  - moron4hire 11y ago
    There is no value to "impressions". Impressions != sales. Sales are the only thing we should be counting as value. Focusing on impressions is how we get click-fraud in the first place.
    - ryanworl 11y ago
      While sales resulting from ad impressions are important (i.e. direct response ads), wouldn't you also agree ads for establishing branding are important as well? The vast majority of ads for luxury cars, for example, aren't going to elicit an immediate purchase, but still provide value for the automaker down the line. Obviously the ads have to eventually lead to sales, but an immediate and trackable sale isn't always an option.
      - moron4hire 11y ago
        Startups aren't luxury car brands. If you're selling a product or service, I think you establish brand by making happy customers. That first requires a sale.
        11y ago
tempodox 11y ago
Methinks thou doth protest too much. This is wrong. It should be: thou dost protest too much. Just saying.
- tempodox 11y ago
  Oh, correcting grammatical mistakes is worth downvotes now? Off course, it's so much more positive to not comment errors. And that's not a typo.
nostromo 11y ago
This article talks a lot about how low click rates don't matter -- but that wasn't the issue brought up by the WSJ. The key take away is that, even if you ignore clicks, impressions are twice as expensive as your reporting suggests. http://www.wsj.com/articles/SB10001424127887324904004578537131312357490 http://www.wsj.com/articles/SB100014241278873249040045785371... > An astounding 54% of online display ads shown in "thousands" of campaigns measured by comScore Inc. between May of 2012 and February of this year weren't seen by anyone, according to a study completed last month. > Don't confuse "weren't seen" with "ignored." These ads simply weren't seen, the result of technical glitches, user habits and fraud.
soneca 11y ago
I am not in the online advertising business (one side or another), much less in the banner business. But that was a horrible, patronizing text to read. I couldn't pass the first half, which is sad, because it look like an interesting point. The author somehow felt that the ones talking about the problem with banners were being arrogant assuming that the buying industry didn't know that for ages, so his answer to this was: 'I will be even more arrogant, more patronizing than they ever could be!!'. Really, that was a boring read.
forgetsusername 11y ago
The fact that no user really enjoys banner advertising occupying their screen real estate, and that most of this advertising can be prevented from displaying with a simply installed browser plugin, makes the whole online advertising economy seem rather tenuous. And yet, some of the largest companies on the planet derive most of their value from it.
- jaawn 11y ago
  I don't think this is necessarily true. Attractive, non-animated banner ads are my "favorite" type of online advertising to encounter. Standard AdSense text ads are ugly and add so much clutter to the page because of the added text. If ads were usually like this, instead of resource-heavy Flash ads or ugly AdSense ads, I probably wouldn't use any ad blocking software. Static image banner ads are probably the only online advertising I have ever clicked or taken notice of.
_lce0 11y ago
There's a subtle difference measuring who saw a road billboard and a website banner. On the former you must spend your own resources, on the later it's paid from your visitors' wallet (internet connection + power + cpu time)
jaawn 11y ago
I hadn't considered this article's perspective before, but I think it is very compelling. A lot of commenters (and likely readers) are probably focusing heavily on the perceived impact of the "fraud" of reporting X amount of impressions and/or clicks, when only Y amount of them were "real." They feel like they are paying for X but only getting Y. I think the simple point this article effectively made is that ad companies have continuously reduced prices so that their clients are actually only paying for Y, or at least they are benefiting from a discount which observes the uncertainty. I think the basic assumption has been that, even though we know the total number of "impressions" is exaggerated, the number is correlated with the "real" number. So long as that assumption is usually true, this is no more a case of fraud than Airlines' reward "miles". To be fair though, larger clients who blanket the web with ads for a campaign have the advantage of spreading the risk over a large number of websites and times. The people most impacted by impression-based ad runs are those who can only afford the smallest campaigns.
- jgalt212 11y ago
  I like this analysis. And if you're clever, you can place your campaigns so that you minimize exposure to fraud, such that you pay for X and get X, while at the same time your banner ads are cheap because the market in general is wary of fraud. Of course, this lunch isn't totally free in that it costs time and money to avoid fraudulent placements and sites known to have low bot rates have ad space that trades at higher CPMs.
- stevesearer 11y ago
  Publishers should also attempt to learn how their readers interact with advertising as a way to better educate potential advertisers. Most of the advertising on my site is not for products available for online purchase and my readers are architects and designers looking for inspiration for future design projects. So whenever a company inquires about advertising I try to find out their goals - branding, online sales, etc... If it is to drive online sales, I believe it is my responsibility to let them know that those campaigns perform terribly. At that point, they can decide what to do, but at least they won't and shouldn't be surprised or feel taken advantage of if the campaign doesn't perform in a way I told them it wouldn't.
cowpig 11y ago
That's a lot of condescending language and he's basically trying to make the point that he doesn't care about banner fraud because most of the cost is shouldered by people who produce content and not the companies who are paying for advertising.

66 points by nkurz 11y ago

As someone currently working on fighting advertising fraud, the article premise is wrong. Specifically, there is a significant amount of wasted money that currently goes to fraudsters (usually through RTB exchanges). If we are able to eliminate all of them, then that wasted money will be left to split amongst the legitimate players, which is good for everyone. So yes, CPMs will go up, but the value of each impression will go up even more.

matt_morgan 11y ago
He does say that. He just doesn't trust you to get the price right. I.e., he believes that in "fixing" advertising fraud, the CPM will go up more than the value will go up.

JoshTriplett 11y ago

I can't help but wonder why all advertisers don't switch to payment by click-through-and-buy, rather than just by click or impression. You can't fake that.

brandnewlow 11y ago
Ad networks won't go for it outside of very specific and narrow use cases (high-end ecommerce) because they don't have control over the quality of the landing page, a crucial element in whether the user converts or not.
- hamax 11y ago
  Exactly. Ad networks will optimize for cost per acquisition but won't charge based on it since they don't control that part of the pipeline. If advertiser's landing page is down for example, the loss shouldn't fell on the ad network.
  - moron4hire 11y ago
    It's not really a "loss" though. It's not like there is a significant marginal cost to serving static content.
    - hamax 11y ago
      Ad network can mean many different things. In case of facebook where their ad network controls the whole process (SSP + Exchange + DSP) they would only lose, besides the infrastructure cost, the opportunity to make money by serving another ad. But for the majority of ad serving world it's not that simple. If you're for example a DSP and buy ad impressions from exchanges via real time bidding, you have to pay for the impression even if you can't charge the advertisers for it. So you lose money twice. You don't serve another ad which would make you money and you have to pay for an ad that won't be paid for by the advertiser.
      - moron4hire 11y ago
        Meh, crocodile tears. If they shouldn't have to pay in the rare case that my site is down, then I shouldn't have to pay in the more-common-than-not case that there is no real person behind the click. And note that I have an incentive to keep my site up, whereas they apparently have no incentive to keep click-fraud down, evidenced by the fact that it's more than 50% of the case.
lazyjones 11y ago
Because most advertising isn't for quick one-time online purchases.
calbear81 11y ago
It doesn't matter how you decide to buy/pay for your impressions because it gets normalized by their ad system to an effective eCPM (revenue per 1000 impressions). Let's say you only want to pay via a "click-through-and-buy", after a certain number of impressions and clicks they will have a benchmark for how much in commissions were paid. They take that number, divide by impressions/clicks, and then have an eCPM to rank you by. If the eCPM achieved by allocating impressions to your campaign is less than via traditional CPM or CPC based buys then you will get lower allocation and thus the system optimizes you out of inventory.
Programmatic 11y ago
That seems like a harder thing for the advertisers to measure than impressions or click-throughs and incentivizes the sponsor of the ad to lie about units sold.

kjjw 11y ago

"Honestly, at first when that article got posted I thought you were going to talk about something else: like maybe how the entire dream of the internet is a bit of a fraud for advertisers in general." Dream of the internet (presumably they mean dream of the web) was not initially one of advertisement.

cokernel 11y ago
> dream of the web This phrase always reminds me of Abigail's WWW Dream: http://www-users.cs.york.ac.uk/susan/int/abigail.htm http://www-users.cs.york.ac.uk/susan/int/abigail.htm
anon1385 11y ago
It's interesting to look back on how idealistic the early web was: http://www.arachnoid.com/freezone/ http://www.arachnoid.com/freezone/ I think it's actually still the case that the best quality content on the internet isn't on commercial sites.
moron4hire 11y ago
I'd really like to know what he meant by that. I have a feeling I'm not going to like the answer.

ErikHuisman 11y ago

Banners might be awesome but banner fraud isn't. Banner fraud is funding the people we want off the internet. So it still needs to be fixed.

dmarti 11y ago
Exactly. Ad fraud is not just a waste of energy (like TV ads playing to no viewers). It supports bad stuff on the Internet at the expense of good stuff. * Ad fraud is now the number one malware payload. * Low-quality impressions show up on copyright infringement, comment spam, and other problem pages. * When advertisers buy programmatically on markets that include both legit and fraudulent inventory, publishers pay for fraud in the form of lower CPMs. More in response to the original article: http://blog.aloodo.org/posts/thank-you-for-supporting-fraud/ http://blog.aloodo.org/posts/thank-you-for-supporting-fraud/

stevenh 11y ago

Where can we read the confessions he's responding to?

deleted 11y ago
[deleted]

jcrei 11y ago

Banners these days are good for "Brand awareness" and not good for generating traffic for a website or to deliver actual actions on a site (purchase, sign-up, etc). Having said that, it is also true that banner fatigue is a real thing, and that lots of people already "tune out" of the traditional banner areas on sites.

sudioStudio64 11y ago

I detest advertising. It's literally designed to undermine reason and supplant critical evaluation of ones needs and priorities. As for web advertising, maybe I was the last person on the planet to figure this out but sometime late last year the web just became unusable on most popular news sites. Popover ads that come up before you can read the content and multiple large ads inline with the content and that "no mans land" on the right. I seriously hope there is a way to make MS Edge default to the "reading view".

SyneRyder 11y ago
Advertising & pop-ups on popular news websites are great! Because they remind me that news sites have zero (or near zero) value, and I should be getting back to work instead of wasting time reading them. If they really had value for me, I'd be signing up for a paid subscription & then they wouldn't have to run ads. Some advertising is good. I am so glad that Harvest advertises. I know I saw it repeatedly advertised on Daring Fireball, so I was aware of it by the time I needed something like it, and I'm super happy with it.
moron4hire 11y ago
No, people want to buy things, and there are a lot of things competing for their attention. Advertising, at its most basic, is just how we inform potential customers that we even exist. Yes, some (a lot? Most?) advertisers get way out of hand. But advertising is not itself evil. It's a tool that may or may not be misused.
- sago 11y ago
  > It's ... designed to ... supplant critical evaluation of ones needs.... > No, people want to buy things That's rather the point. The desire to buy things is driven not by critical evaluation of need, but by psychological trickery that falsely associates buying stuff with a whole range of actual needs. If ads promoted critical evaluation of a person's needs in relation to available products, that would be a different thing entirely. It is quaint, but I can't help think naive to suggest that the core of advertising is informing customers, and the psychological trickery is 'misuse'.

gergo_v 11y ago

Disclosure: I also work for a company that specializes in fighting advertising fraud. I think this is either willful ignorance or a complete misunderstanding of the fraud ecosystem. It's not about click through rates by a long shot. But since the OP's main argument seems to be how the bigger ecosystem of online advertising already accounts for fraud, let's take that further. With this attitude, he's effectively saying that: - They're okay with indirectly sponsoring the spread of viruses and trojans (rationale being: it's cheap!) - They're okay with paying some dudes with some smart scripts (eg. the fraud mechanisms) the same amount of money as hard-working content creators and publishers - And they don't care enough about the budget either. Accountability is apparently a fairy tale in this context? The industry is under heavy fire regarding this subject as it is, and I'm not sure whether this attitude is going to further the conversation.

TomGullen 11y ago

If you've got a team of smart people willing to drop $500k on a banner campaign and you can accurately measure the results and it's still worth it with all the fraud, good for you. If you're a mom and pop store looking to spend $500 on advertisements they should be made aware there's a good chance they will be defrauded unless they know what they are doing.

morley 11y ago
I think the article's point is that, if you compare banners to physical billboards, then you have the same issue but the billboard still works. So even your theoretical mom and pop store is getting value out of the impressions.
- moron4hire 11y ago
  There is no value to "impressions". Impressions != sales. Sales are the only thing we should be counting as value. Focusing on impressions is how we get click-fraud in the first place.
  - ryanworl 11y ago
    While sales resulting from ad impressions are important (i.e. direct response ads), wouldn't you also agree ads for establishing branding are important as well? The vast majority of ads for luxury cars, for example, aren't going to elicit an immediate purchase, but still provide value for the automaker down the line. Obviously the ads have to eventually lead to sales, but an immediate and trackable sale isn't always an option.
    - moron4hire 11y ago
      Startups aren't luxury car brands. If you're selling a product or service, I think you establish brand by making happy customers. That first requires a sale.
      - 11y ago

tempodox 11y ago

Methinks thou doth protest too much. This is wrong. It should be: thou dost protest too much. Just saying.

tempodox 11y ago
Oh, correcting grammatical mistakes is worth downvotes now? Off course, it's so much more positive to not comment errors. And that's not a typo.

nostromo 11y ago

This article talks a lot about how low click rates don't matter -- but that wasn't the issue brought up by the WSJ. The key take away is that, even if you ignore clicks, impressions are twice as expensive as your reporting suggests. http://www.wsj.com/articles/SB10001424127887324904004578537131312357490 http://www.wsj.com/articles/SB100014241278873249040045785371... > An astounding 54% of online display ads shown in "thousands" of campaigns measured by comScore Inc. between May of 2012 and February of this year weren't seen by anyone, according to a study completed last month. > Don't confuse "weren't seen" with "ignored." These ads simply weren't seen, the result of technical glitches, user habits and fraud.

soneca 11y ago

I am not in the online advertising business (one side or another), much less in the banner business. But that was a horrible, patronizing text to read. I couldn't pass the first half, which is sad, because it look like an interesting point. The author somehow felt that the ones talking about the problem with banners were being arrogant assuming that the buying industry didn't know that for ages, so his answer to this was: 'I will be even more arrogant, more patronizing than they ever could be!!'. Really, that was a boring read.

forgetsusername 11y ago

The fact that no user really enjoys banner advertising occupying their screen real estate, and that most of this advertising can be prevented from displaying with a simply installed browser plugin, makes the whole online advertising economy seem rather tenuous. And yet, some of the largest companies on the planet derive most of their value from it.

jaawn 11y ago
I don't think this is necessarily true. Attractive, non-animated banner ads are my "favorite" type of online advertising to encounter. Standard AdSense text ads are ugly and add so much clutter to the page because of the added text. If ads were usually like this, instead of resource-heavy Flash ads or ugly AdSense ads, I probably wouldn't use any ad blocking software. Static image banner ads are probably the only online advertising I have ever clicked or taken notice of.

_lce0 11y ago

There's a subtle difference measuring who saw a road billboard and a website banner. On the former you must spend your own resources, on the later it's paid from your visitors' wallet (internet connection + power + cpu time)

jaawn 11y ago

I hadn't considered this article's perspective before, but I think it is very compelling. A lot of commenters (and likely readers) are probably focusing heavily on the perceived impact of the "fraud" of reporting X amount of impressions and/or clicks, when only Y amount of them were "real." They feel like they are paying for X but only getting Y. I think the simple point this article effectively made is that ad companies have continuously reduced prices so that their clients are actually only paying for Y, or at least they are benefiting from a discount which observes the uncertainty. I think the basic assumption has been that, even though we know the total number of "impressions" is exaggerated, the number is correlated with the "real" number. So long as that assumption is usually true, this is no more a case of fraud than Airlines' reward "miles". To be fair though, larger clients who blanket the web with ads for a campaign have the advantage of spreading the risk over a large number of websites and times. The people most impacted by impression-based ad runs are those who can only afford the smallest campaigns.

jgalt212 11y ago
I like this analysis. And if you're clever, you can place your campaigns so that you minimize exposure to fraud, such that you pay for X and get X, while at the same time your banner ads are cheap because the market in general is wary of fraud. Of course, this lunch isn't totally free in that it costs time and money to avoid fraudulent placements and sites known to have low bot rates have ad space that trades at higher CPMs.
stevesearer 11y ago
Publishers should also attempt to learn how their readers interact with advertising as a way to better educate potential advertisers. Most of the advertising on my site is not for products available for online purchase and my readers are architects and designers looking for inspiration for future design projects. So whenever a company inquires about advertising I try to find out their goals - branding, online sales, etc... If it is to drive online sales, I believe it is my responsibility to let them know that those campaigns perform terribly. At that point, they can decide what to do, but at least they won't and shouldn't be surprised or feel taken advantage of if the campaign doesn't perform in a way I told them it wouldn't.

cowpig 11y ago

That's a lot of condescending language and he's basically trying to make the point that he doesn't care about banner fraud because most of the cost is shouldered by people who produce content and not the companies who are paying for advertising.