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The online advertising landscape – Q&A with Dr. Augustine Fou

Hosted by Bart Burggraaf

With the growing digitization of advertising comes perils of ad fraud and instances of over-information. These can paralyse marketers in their decision-making. As advertising across all online channels is projected to exceed 60% of global adspend for the first time in 2022 (GCC Business News), marketers must pay close attention to the industry’s development to uphold integrity in their business practices.

To facilitate this, our agency partner Bart Burggraaf interviewed Dr. Augustine Fou, a cybersecurity and ad fraud researcher and industry thought leader. They discuss ideas on online advertising, the fundamentals of the publisher business, and how marketers can better prepare themselves in the everchanging digital landscape.

The below interview has been edited for length and clarity, and the views expressed are the interviewee’s and do not necessarily reflect those of MediaGroup.

BB: Dr. Fou, please tell us a little about who you are and what you do.

AF: I am a digital marketer of 25 years. I currently study ad fraud and help marketers audit their digital campaigns for fraud and for effectiveness.

Advertising fraud is a scheme that prevents ads from being delivered to the audiences or places that brands intended them for. Instead of reaching potential customers, these ads end up served to bots, and fail to generate the awareness, traffic, leads, and conversions they were meant to generate. At the end of the day, both advertisers and brands suffer.

BB: Can you tell us about the fundamental differences in practice between ‘good’ and ‘bad’ publishers over the last ten years, and the effects this has on the digital landscape?

AF: Good publishers who have held the line and resisted the temptation to cheat by buying traffic have all been harmed over the last ten years – both by revenue declines, as buyers chased low-cost ads available on programmatic exchanges, and margin compression.

Fake publishers have thrived in the last ten years because they use bots and ad fraud to make high margin revenues. You can’t force people to click on ads, but bots can give you a 100% click-through rate. These publishers set up fake sites, buy fake traffic, and sell fake ads at low CPMs – for example, at a $3 CPM instead of mainstream publishers at $30 CPM.

BB: How do you see the online advertising business changing over time? And how do you see your role in this?

AF: Online advertising has been around for more than two decades, and the ad fraud crisis began ten years ago and is still happening now. I call this period the ‘lost decade’ of digital marketing.

Since 2012, advertisers large and small pouring their ad budgets into digital have focused on high ‘performance’ with low prices and large quantities of ads. As humans are not reliable, many began using bots to create impressions and get traffic, and this has propelled the industry into a bot-fuelled landscape.

Bad publishers get away with their behaviour easily because the digital advertising space goes largely unregulated and advertisers love to buy huge quantities of ads, well beyond what is possible due to human activity. Trade associations are also not helpful when they tell everyone fraud is low, don’t worry, keep buying.

In the networks of fraudsters and those who turn a blind eye to these bots generating fake impressions, we realise that ad fraud is not a tech problem but an incentives problem. This situation is projected to continue as long as all parties involved are sufficiently incentivised and the operation remains profitable – which it will probably always be.

My role is to demystify ad fraud by explaining its mechanics on a technical and socio-cultural level to make digital advertising better, and to help educated people buy real ads from real publishers that have real human audiences.

BB: To an advertiser overwhelmed with information, what would you recommend they focus on?

AF: Simplify, simplify, simplify. If something sounds too good to be true, then yeah, it’s all fabricated by ad tech companies to sell you something. A fancy dashboard and too much information is meaningless if there are no sales.  

Digital marketers often mistake the quantity of metrics that are easy to collect and report – such as impressions, clicks, and traffic – as the success of a campaign. However, not many are familiar enough with how bots and ad fraud to determine how well their campaigns are truly doing.

The only thing advertisers should focus on is outcome. Did the digital marketing drive sales or other outcomes? If not, then no matter how fancy it sounded, the campaign didn’t do anything, and you’ve wasted money on it.

BB: With tracking becoming more and more difficult through regulation and data noise, how can companies track the results of their advertising?

AF: For many years, marketers have been sold on the idea that microtargeting would help them improve their marketing. But tracking is useless anyway, because the ad targeting derived from website visitation patterns are inaccurate and do not yield incremental outcomes. By focusing all your ads and digital budgets on the 1% that have purchased from you before, you neglect the other 99% and miss out on potential sales.

You also can’t track campaign performance through the quantity of ad-clicks alone, because bots can skew this kind of face-value data. You should dig deeper and see where an ad was clicked, what was clicked on, and whether it was a human or a bot clicking, before going for any optimisations.

Most of all, it is important to just go back to good, basic digital marketing and just look at outcome and whether business objectives are met.  

Let’s summarize

As the online advertising industry expands, more and more advertisers will tout their services for the lowest prices while promising the best performance. Digital marketers should always stay vigilant and educated, as while bots can give you all the impressions and clicks you desire, they simply cannot convert, and relying on vanity metrics will get you nowhere.

Dr. Augustine Fou is an independent researcher who helps clients identify and remove fraud impacting their marketing campaigns. He has taught at NYU and Rutgers University, and he is an industry-recognised contributor for Forbes with bylines in many digital publications. You can access his work on his LinkedIn profile.

MediaGroup is a data-driven marketing agency for mid- to enterprise-level companies that want to overhaul their client acquisition funnel. As a full-service agency, our strategies include SEM, social advertising, content creation, video and programmatic advertising, and more. We are also a global agency with offices in Switzerland, Denmark, Poland, the UK, Australia, and Hong Kong. For a consultation or an audit, please contact us.

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Bart Burggraaf

Partner (NL)

Bart is a Partner at MediaGroup. In the agency, he primarily works on SEO, client strategy, new business and staffing. Before working at MediaGroup, he managed global marketing at Citibank’s Margin FX business and worked on online marketing for Saxo Bank in Copenhagen. Bart has lived in 7 countries over the years but is originally Dutch.

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