As the marketing landscape continues to evolve, marketers have no shortage of issues to worry about. Demanding, tech-savvy consumers and an ever-growing number of channels and devices make it harder than ever to engage the right people with the right message, at the right time. A dangerous enemy to a marketer’s success is ad fraud – it not only eats away at revenue, but also breeds expenses without any counter value.
Businesses could lose $16.4 billion to online advertising fraud in 2017 (Source: CNBC.com)
Bot-fueled ad fraud, which is designed to mimic the activities of human browsers, is perhaps the most common. This so-called invalid traffic was estimated to cost advertisers $12.5 billion in 2016, and is expected to increase by another $4 billion this year. For marketers, the proliferation of online fraud greatly impacts advertising ROI, since falsified clicks cost money without yielding any engagement, conversions or revenue.
Beating Ad Fraud with Better Metrics
Given the severity of the problem, marketers need to find new ways to combat the rising threat of advertising fraud. At Nielsen, we’ve long been proponents that the best way to fight fraud is to change the way marketing and advertising effectiveness is measured. Today, much of the industry still relies on metrics like impressions and click-through rates, which are particularly susceptible and easy mimicked by malicious bots and fraudsters. While bots can easily imitate a legitimate user clicking on an ad, they can’t mimic complex human behaviors, such as making a purchase or buying a subscription. By leveraging multi-touch attribution and switching their focus to lower-funnel metrics like revenue, marketers can draw a direct line between the digital ads they serve and their impact on their business’s bottom line. Since marketers will naturally want to reallocate budget to those channels and tactics that are most effective at driving revenue, they can begin to filter out fraudulent placements while improving marketing performance overall.
A New, People-Based Approach to Fraud Prevention
While focusing on bottom-line metrics is still a powerful way to reduce a marketer’s susceptibility to fraud, there may now be an even better way: people-based marketing.
People-based marketing represents an industry shift from targeting cookies to targeting real people across channels and devices using a persistent identity. The practice is built on underlying consumer IDs, which are unique to each individual and integrate user-level IDs across different platforms, data sources and devices (e.g. third-party cookie IDs, device IDs, CRM IDs, offline IDs, etc.) to create enriched consumer profiles.
So, why is the notion of people-based marketing and persistent IDs so important in the fight against ad fraud? Because people-based marketing ensures that you are reaching real people, instead of wasting time and money on ad bots that are only posing as real people. Moreover, when these robust consumer profiles are used to feed the attribution process, marketers receive an unparalleled view of marketing and advertising performance by audience segment. With visibility into which channels and tactics influence a specific audience, marketers can effective optimize budgets across consumer touchpoints while delivering coordinated messages and experiences that maximize conversions, revenue, and other desired business outcomes.
In today’s digital advertising ecosystem, everyone is susceptible to fraud. But with its challenges comes opportunity. By adopting a people-based approach, you can not only minimize uncertainty and loss due to advertising fraud, but also deliver more relevant and personalized experiences that drive bottom-line business results.
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