Procurement Should STEP IN to Help Fight Ad Fraud The document outlines five things procurement can do to help fight ad fraud: 1) Don't buy low cost media and insist on quality publishers with real human audiences; 2) Insist on reports with line item details to know where ads are running; 3) Use continuous fraud detection as a "smoke detector"; 4) Optimize media towards reaching humans; and 5) Focus on business outcomes rather than metrics that can be faked. The author, Dr. Augustine Fou, is an independent ad fraud researcher who earned a PhD from MIT and previously worked at American Express and Omnicom crafting his expertise in digital marketing fraud investigation.

1. Procurement Should
STEP IN
to Help Fight Ad Fraud
January 2018
Augustine Fou, PhD.
acfou@mktsci.com
212. 203 .7239

2. January 2018 / Page 1marketing.scienceconsulting group, inc.
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Five Things Procurement Can Do
1. DON’T buy low cost (CPMs) media – real human audiences are
very scarce and good publishers have those visitors; extreme low cost
CPMs can only come from fake sites and ad fraud; smaller quantity and
higher quality (sites, ads) are better
2. Insist on reports, line item details – know where your ads ran
(brand safety and compliance); if ad exchange won’t tell you, don’t buy
3. Use continuous fraud detection – bad guys will always have better
tech; use fraud detection as a “smoke detector” and then dig deeper
4. Optimize media towards humans – increase spend on media
sources that have high humans to get your ads in front of humans
5. Focus on business outcomes – any quantity metric, and even some
quality metrics can be faked by bots; focus on media channels that
produce real business outcomes

3. January 2018 / Page 2marketing.scienceconsulting group, inc.
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Review agency contracts
http://www.ana.net/content/show/id/industry-initiative-media-transparency-report
2016 Assoc. of National Advertisers Media Transparency Initiative: K2 Report
Results of the study were delivered by K2 in a comprehensive report. Among the key findings:
• Numerous non-transparent business practices, including cash rebates to media
agencies, were found to be pervasive in the U.S. media ad buying ecosystem.
• There were systemic elements to some of the non-transparent behavior. Specifically, senior
executives across the agency ecosystem were aware of, and mandated, some non-
transparent business practices.
• There was evidence of non-transparent practices across a wide range of media, including
digital, print, out-of-home, and television.
“marketers prohibited from getting placement reports (where the ads ran)”
“marketers could not review CPM prices paid by agency”
Is agency acting as “principal” or “agent”?

4. January 2018 / Page 3marketing.scienceconsulting group, inc.
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Insist on reports, w/ line-item details
Line item details
Overall average
9.4% CTR
“fraud hides easily
in averages”
“line item details
reveal obvious fraud”

5. January 2018 / Page 4marketing.scienceconsulting group, inc.
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Insist on continuous fraud detection
102,231 sessions
0 sessions
goal event – no change

6. January 2018 / Page 5marketing.scienceconsulting group, inc.
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Corroborate with analytics teams
click on links
load webpages tune bounce rate
tune pages/visit
“bad guys’ bots are advanced enough to fake most metrics”

7. January 2018 / Page 6marketing.scienceconsulting group, inc.
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Actively scrub bots/fraud in-flight
Launch Week 3 onwardWeeks 1-2
Initial baseline
measurement
Measurement after
first optimization
After eliminating several
“problematic” networks

8. January 2018 / Page 7marketing.scienceconsulting group, inc.
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Measure for humans, not just bots
Lower quality paid sources
mean higher cost per human
acquired – like 11X the cost.
Sources of different
quality send widely
different amounts of
humans to landing pages.

9. January 2018 / Page 8marketing.scienceconsulting group, inc.
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Shift budget to real conversions
Organic sources
have more humans
(dark blue)
Conversion actions (calls)
are well correlated to
humans; bots don’t call

10. January 2018 / Page 9marketing.scienceconsulting group, inc.
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What is Ad Fraud?

11. January 2018 / Page 10marketing.scienceconsulting group, inc.
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What is digital ad fraud ?
Ad Fraud = ad impressions caused
by bots, not seen by humans
Impressions
(CPM) Fraud
(includes mobile display, video ads)
Search Clicks
(CPC) Fraud
(includes mobile search ads)

12. January 2018 / Page 11marketing.scienceconsulting group, inc.
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How bad guys commit ad fraud
1. set up
FAKE SITES
2. buy
FAKE TRAFFIC
3. sell
FAKE ADS

13. January 2018 / Page 12marketing.scienceconsulting group, inc.
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Fake sites have no content, no humans
Identical sites
made by template
Alphanumeric
domains
So they can sell ad
“inventory” at low prices
Source: Sadbottrue.com

14. January 2018 / Page 13marketing.scienceconsulting group, inc.
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Beware mobile… MORE rampant fraud
Bad apps load impressions
in background, not in use
Source: Forensiq
Fake mobile devices install
apps and interact w/ them
Download and Install
Launch and Interact
“more money; less measurable”

15. “Let’s go fight some bad guys
together!”

16. January 2018 / Page 15marketing.scienceconsulting group, inc.
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About the Author
January 2018
Augustine Fou, PhD.
acfou@mktsci.com
212. 203 .7239

17. January 2018 / Page 16marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
Dr. Augustine Fou – Independent Ad Fraud Researcher
2013
2014
Published slide decks and posts:
http://www.slideshare.net/augustinefou/presentations
https://www.linkedin.com/today/author/augustinefou
2016
2015
2017

18. January 2018 / Page 17marketing.scienceconsulting group, inc.
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Harvard Business Review
Excerpt:
Hunting the Bots
Fou, a prodigy who earned a Ph.D. from MIT at
23, belongs to the generation that witnessed
the rise of digital marketers, having crafted his
trade at American Express, one of the most
successful American consumer brands, and at
Omnicom, one of the largest global advertising
agencies. Eventually stepping away from
corporate life, Fou started his own practice,
focusing on digital marketing fraud
investigation.
Fou’s experiment proved that fake traffic is
unproductive traffic. The fake visitors inflated
the traffic statistics but contributed nothing to
conversions, which stayed steady even after the
traffic plummeted (bottom chart). Fake traffic is
generated by “bad-guy bots.” A bot is computer
code that runs automated tasks.