Click fraud continues to plague online advertising, but many just want to sweep it under the rug. Radar Research managing partner Marissa Gluck calls it "the dirty little secret of the online ad industry that no one wants to talk about."
Perhaps that's because data released Thursday in a study conducted in July reveals that more than half of ad impressions and 95% of clicks in online ad buys were fraudulent. Gluck compiled and analyzed the findings published by ad optimization company Mpire, Seattle, Wash., with help from its AdXpose technology.
Nearly all the fraudulent traffic was hidden behind numerous layers of nested I-Frames -- ad units pulling ad content from other sources that can hide URLs and in-view data. The test shows significant impression fraud and URL padding in standard run-of-network (RON) online ad buys.
"There's an enormous amount of budgetary and impression waste taking place because of click fraud," Gluck says. "Ad networks, which have traditionally been seen as suspect, need to eliminate click fraud if they want to be taken seriously by advertisers."
Many of the sites in these exchanges use multiple layers of I-frames, which further complicated efforts to track campaigns. Sites are able to hide fraudulent traffic behind numerous layers of nested I-frames, leaving advertisers blind to in-view data, according to the study.
Mpire believes the default trafficking behavior of many RON buys is to include fraudulent and well-known botted sites. Gluck writes in the study that not all marketplace or exchange traffic is bad, but rather simply includes nefarious inventory that ad networks could block, but for some reason do not.
The report states that most campaigns are automatically optimized based on CTR and/or eCPM -- so this fraudulent traffic, if left unchecked, will dominate contracted volume. Gluck believes it would only take a little bit of effort to exclude these sites to reduce or eliminate click fraud.
The tests were conducted with two types of campaigns. The first was a managed campaign where ads were served to reputable sites, pre-approved by the advertiser to reduce concerns surrounding fraud. The second was a run-of-network (RON) campaign.
The buys were delivered in July on more than 20 million impressions to ads from 53 advertisers. These impressions were filled by the initial nine ad networks through downstream daisy-chaining on at least 45 additional ad networks on more than 100,000 sites.
Mpire also conducted a test directly on a top-ten ad network, with the goal of proving the power of referrer and fraud data to unlock the hidden value of horizontal networks. The impressions were bought on a CPM-basis, rather than on a CPC or CPA basis. The revealed that while 50% of the impressions were never within view of a user, the click and impression fraud volume was significantly lower than on the exchange-based buys.
Before optimization based on Mpire's data, there was an in-view-to-impression ratio of just 53%. After optimization, traffic generated by bots nearly disappeared and user engagement improved dramatically. Overall, the in-view-to-impressions ratio rose to more than 92%, post-analysis and implementation, according to the study.
