Problems faced by Advertisers
The programmatic ecosystem has two main players: Advertisers and Publishers. We have initially understood the problems faced by publishers. Invalid Traffic causes brand damage to publishers. But the monetary damage caused to the advertisers is extremely high.
The demand side players bid on publisher inventories through different techniques; the most common being CPM. In this case, the advertiser becomes liable to pay for every thousand impressions which creates a grey area in terms of genuine and fake impressions. As important as a drop of water is in building an ocean, so is an impression in eating up the budget of an advertiser.
The main objective of an advertiser is to ensure a perfect alignment of the marketing goal with the campaign results. Thus, every impression that leads to no further activity can create a huge burden on the marketing spending of a brand. Moreover, even if an impression is genuine, who guarantees that the segment leading to these impressions is the most appropriate? Let us look at these challenges in detail.
1. Frauds
There is no rocket science involved in understanding that advertisers are also susceptible to fraud apart from the publishers. Some noteworthy frauds faced by advertisers are:
a) Click Fraud: These frauds occur in the case of the CPC advertising technique. Every click generated on an inventory creates an obligation for the advertiser to pay. Thus, invalid clicks resulting from bots, malware and click farms (humanoid versions of bot traffic) can break the advertisers back financially. Unusual inflation of clicks and multiple actions from a single source are some ways to identify click fraud.
b) Impression Fraud: As seen previously, in the CPM advertising model, impression frauds are the most common. It involves an impression being counted even when the ad is not rendered or being played without a genuine human impression. Paying for non-human impressions is the biggest challenge an advertiser faces when there is no mechanism with the advertiser in any campaign to determine the non-human impressions.
c) Install fraud: As the name suggests, in the case of an install campaign, a fraudulent source may generate fake installs of the apps. Every time an install is made, the advertiser pays for it which is collected by the fraudster who takes the credit for such invalid installs.
d) Subscription fraud: The IVT actors make use of the pay-per-subscription model to carry out this fraud. The fraudsters may subscribe to an app or any other service without the customer’s authorization and knowledge. This creates a charge on the advertiser using a pay-per-subscription model without gaining a genuine conversion.
e) Lead fraud: An advertiser may not pay for impressions or conversions but may choose to open pockets when a lead is generated from a specific campaign that has the potential to be converted. Lead generation forms like signups can be illegally filled by fraudsters based on sophisticated data collection techniques used to gather information about different types of consumers. By paying for fake leads, an advertiser falls prey to lead fraud.
2. Faulty segmentation
A DSP is to an advertiser what an SSP is to a publisher. Demand Side Platforms connect advertisers to the publishers with valuable inventories that can attract the target customers to the advertiser’s campaign. However, there are chances of the segmentation criteria being misunderstood. This may result in an advertiser paying a premium amount for a publisher’s inventory which focuses on a particular niche but does not form a part of the advertiser’s target market,
When the campaign is not directed towards the right crowd, it may generate cold impressions that exhausts the advertiser’s budget with less effective results.
3. Lack of knowledge of publisher reputation
In the case of Real-Time Bidding, the publisher that bids the maximum amount wins the auction. Hence, the advertiser’s ad is displayed on the inventory possessed by such a publisher. What is missing here is knowledge about the reputation of such a publisher. A publisher, unknowingly, might be receiving a lot of invalid traffic on the inventories. When the ads are displayed in such contaminated spaces, the advertiser stands a chance of losing an exorbitant amount of money.
