4 Keys to Developing a Fraud-proof Programmatic Campaign

Soo Jin Oh
Marketing News
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Key Takeaways

​What? Programmatic ad spending will hit $33 billion by the end of this year, but the cost of fraud will be great. 

So what? Even though fraud is an issue, programmatic ads are too valuable for marketers to ignore. 

Now what? Be smart about  programmatic buying. Be wary of unrealistic click-through rates, and avoid fraud-heavy times such as between the hours of 12 and 4 a.m.

​Aug. 30, 2017

Soo Jin Oh, vice president of client strategies and solutions at Cox Media Group’s Gamut​, gives marketers advice on how to avoid fraud in programmatic advertising​

Programmatic advertising is growing; some estimates forecast that programmatic ad spend will hit $33 billion by the end of 2017. The technology’s popularity among marketers is warranted, as it increases efficiency, empowers their ability to scale and provides them with access to data and tools for precise targeting and effective tracking across multiple channels. 

Even with all of its current glory, programmatic technology remains challenged by the persistence of fraud. Fraud is a problem facing all aspects of the marketplace with no easy solution in sight, but this lingering challenge is no reason to deter budgets or faith in programmatic execution. The remedy in the current landscape is to face fraud head-on.  

Campaigns that test different strategies to eliminate fraud throughout the process will undoubtedly perform better. A digital campaign’s best defenses are strategic measures that find how the fraud manifests. Some of these tactics can only be done in optimization, not in campaign design. Here are four key tactics to take into consideration. 

1. Avoid Optimizing Toward an Unrealistic Click-through Rate  

When marketers execute a campaign programmatically, they may see a negative impact on performance by optimizing too aggressively toward high and unrealistic CTR. High CTR is a hotbed for fraud, ripe with bots that generate clicks from non-human traffic to collect money. This fraud is particularly prevalent when marketers are not using pre-bid targeting to block fraud. 

If you see inventory where the CTR isn’t realistic for certain environments, exclude those sites or alert the supply side platform so they can investigate them further. For example, if a standard desktop banner is performing at greater than 0.2%, it should raise caution. 


 Understanding Programmatic Digital Advertising


2. Don’t Be Bid Happy

Some people might try to avoid fraud by increasing the bidding price. However, a high bid price alone does not eliminate fraud. Fraudsters are clever; they’ll raise floor CPMs to attract buyers who are willing to pay the price (pun intended), but haven’t done their due diligence in detecting and blocking fraud. This is especially true when a campaign is optimizing toward clicks, which may be fraudulent (see previous point) or during high-demand periods when the industry is rushing to deliver campaigns, such as at the end of the month or the end of quarter. Buyers who optimize for clicks and increase the bid price to win more to satisfy volume needs end up exposing themselves to more fraud. 

3. Deliver Impressions Wisely 

Even in digital campaigns, timing matters. Fraudulent activity is more prevalent in the late hours and impressions delivered at those time frames are therefore more susceptible. Fraud typically begins surging around 12 a.m., peaking at 4 a.m. and then slowly declines until 8 a.m. when it reaches steady levels that are maintained throughout the day. 

Programmatic campaigns can be designed to focus more on time frames with less fraudulent activity. Applying a tool like hour parting, which allows you to restrict the hours your campaign is active, is especially helpful for conversion-based campaigns where you know your audience isn’t likely to convert during late hours. This fraud-reducing strategy also applies for month-end and quarter-end periods. Marketers should try to evenly pace ad delivery or slightly front-load it in the beginning of the month or quarter. Doing this will also help marketers win real impressions at an efficient price as there’s less competition there. 

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4. Leverage Pre-bid Targeting 

Vendors like Integral Ad Science and Double Verify provide pre-bid segments that offer predicted likelihood of fraud. By purchasing these segments with a low probability of fraud, buyers can mitigate their exposure for a small CPM charge. One of the values to executing programmatically is benefiting from robust data points. This probability is based on actual history of known fraud. But beware, layering in too much pre-bid targeting can limit delivery dramatically. Testing continuously is critical. 

Fraud is an unfortunate consequence of the programmatic marketplace, but to succeed in this channel, you do not have to surrender to it. If you understand the roots of fraud and the factors that cause it to exist, you can use programmatic technology tools to execute a campaign that avoids fraud. 

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Author Bio:

Soo Jin Oh
Soo Jin Oh is vice president, client strategies and solutions at Cox Media Group’s Gamut.
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