Digital Fraud, Procurement and the NewFront

Q In determining what media companies you include in your digital media buys how great a concern are fraudulent impressions and clickthrough rates18 only include sites that guarantee minimal or no fraud58 say fraud has a major or considerable impact on decisionmaking24 say fraud has somewhatlittleno impact on decisionmakingDo these stated amp8220realitiesamp8221 conform to the actual practices that digital media sellers are experiencing in the field Only 5 of advertiser and agency execs say amp8220there is too little information to factor fraud into our plansamp8221 even though this is the most likely reality at most agencies todayBased on several recent interviews my takeaway is that agency and client executives believe the industry is responding appropriately and meaningfully to fraud while in fact it is far more pervasive and universal than they understand Beating fraud is being compared to playing whackamole amp8211 stop it here and it just pops up over there Industry efforts to manage and control fraud are being compared by many to efforts during prohibition to control bootlegging Itamp8217s too ubiquitous and too difficult to track and controlA few years ago Googleamp8217s Eric Schmidt argued that fraud was built into pricing a comment that was roundly criticized But just as John Wanamakeramp8217s comment that only half his advertising worked but it was okay because it did work and was cheap fraud is built into the pricing and isnamp8217t actually being managed as aggressively as buyers planners and clients believeQ How large a role do clientsamp8217 procurement requirements have in influencing your digital media buying decisions Procurementbased pricing decisions have15 Significant influence on digital pricing and buying decisions39 Some influence on digital pricing and buying decisions36 MinimalNo influence on digital pricing and buying decisions10 Donamp8217t knowAgain I question how much actual understanding many agency buyers and planners those in the trenches actually have of the influence procurement has on the guidance they receive from clients A more likely reality is that a majority of those claiming procurement has minimalno influence are actually in the amp8220Donamp8217t knowamp8221 categoryWhile media and advertising are an emerging responsibility for supply chain management at major marketers there are few companies today where every expenditure is not subjected to pricing controls Procurement officers are packaging advertising with other business expenditures that have subjective and qualitative variables and are developing new models to assess yeartoyear pricing shifts in these categories Itamp8217s reasonable to believe that 85 of advertisers are somehow factoring procurementbased models into their advertising budgeting process Itamp8217s also reasonable to believe that most media agency execs and those who are dealing daytoday with media sellers have very little understanding of the supplychain management techniques and procurement realities that are clearly beginning to dominate our business and will play a primary role in the major media reviews that will have a huge impact on the business in the next few years

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Digital Fraud, Procurement and the NewFront

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Jack Myers

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