Why Dealers Need to Be Wary of Digital Ad Fraud

How ad fraud affects dealerships' goal to advertise only to in-market shoppers

The digital advertising world continues to grapple with ad fraud. White Ops, a digital advertising security firm, reported that advertisers are estimated to have lost $7.2 billion globally in 2016 because of fraud and its associated costs.

Various types of ad fraud—including spoofing/laundering, hidden ads, clickjacking, and fake websites (among others)—are prevalent, and routinely affect advertisers across all industries and programmatic advertising types.

There is no such thing as fraud-free digital advertising. As more and more ad dollars move from off-line mediums to digital, the measurability of advertising impact increases, as does the possibility of fraud. Fraud manifests itself in a variety of ways.

Meanwhile, all dealerships want to advertise only to in-market shoppers. Understanding who is in-market is quite challenging because it requires deciphering human versus non-human traffic.

Non-human traffic obfuscates both advertising and website performance, thus manipulating the data used to make key business decisions.

Combating fraud

Although fraud will never completely be eliminated, there are ways to combat it. In the auto industry, as in many other industries, the battle is being waged on the technology front by trying to identify real users who engage with automotive websites.

According to the 2016 Imperva Incapsula Bot Traffic Report, which tracks the growth of non-human internet activity, more than half of all website traffic is generated by automated software, commonly referred to as bots. This artificial element creates a challenging advertising environment for dealers because of the need to differentiate between a bot and a human.

Combating the onslaught of automated noise starts with identifying the right digital advertising partners to ensure all parts of the supply chain are taking a stance toward eliminating invalid traffic from the ecosystem.

What happens when an ad is clicked?

The key to identifying real users is to analyze impressions-level user events, and then analyze those events to categorize user behavioral traits.

For example: Do users browse your website for several minutes after clicking an ad, or do they leave your website after a few seconds?

These traits can be used to influence how future impression purchase decisions are made, and can help dealers understand how these events generate sales. Continuous data-driven analysis on shopper behaviors ensures ad dollars are spent efficiently.

What do users do before clicking?

Dealers and their advertising partners also need to have a quality filtering system in place to ensure they are reaching real and relevant users. This starts with the highest-quality signals, such as users who have shown interest in a vehicle or have inquired about vehicle financing.

Another critical element of reaching the right audience involves reviewing the demographic information of the websites where impressions are placed. For example, dealerships probably do not want to advertise on websites aimed at children, because children almost never purchase vehicles.

Ultimately, dealers should strive to understand the patterns of their impression traffic: where it’s being served, what time of day it’s being served, how users who have seen the ads are interacting with the advertiser’s website, the number of times an advertisement is shown to a single user, and the post-click website behavior of the user.

Anti-fraud programs

Other anti-fraud programs and resources are available that can put a dent in the costs of ad fraud.

For example, the Trustworthy Accountability Group (TAG) was formed to improve the quality of digital advertising by increasing transparency. TAG has created a registry of trusted partners using a combination of industry guidelines and best practices.

When additional digital advertising businesses further embrace transparent business practices via TAG and other sources, the quality of advertising across the industry will increase.

Although anti-fraud efforts continue to gain ground, the fraudsters will surely adapt and find new ways to infiltrate the ad systems. Therefore, digital advertisers—and the anti-fraud community—must continue to innovate to create a more protected ad ecosystem that is able to stay a step ahead of fraudulent activity.

Eric Mayhew is the senior director of product management advertising at Dealer.com, a Cox Automotive brand operating websites of 62% of U.S. franchise car dealerships.

Eric Mayhew

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