How to Fix Ad Fraud (and Why Publishers Should Pay) Industry Needs to Make Digital Advertising Accountable

A great piece by Charlie Fiordalis, Managing Director of Digital for Media Storm

Appeared in Ad Age May 30, 2014

The prevalence of digital advertising fraud is a huge threat to our industry and can no longer be ignored. As an industry, we need to take immediate steps to make digital advertising fully transparent and accountable. If not, the future looks bleak for digital advertising professionals, as trust will erode and growth will cease.

Why the current industry perspective isn’t helping:

Most articles about digital fraud focus in on a number. And I understand why — the numbers are huge ($6 billion according to some reports) and stats are easier than solutions. According to another recent report, more than one-third of online ad traffic is fraudulent, and that doesn’t even touch on the two additional issues of viewability and brand safety, which are arguably equally as important.

But statistics aren’t going to solve the problem. We need to stop celebrating the problem and actually do something about it. I admit it, I was in denial. I’d been following the articles hoping it was exaggeration and rationalizing that someone else would clean up the problem. But I couldn’t shake the feeling that it was true: that the very foundation of digital advertising — the belief that we’re creating a better, more accountable medium — was very, very ill.

So what’s the real solution?

One word — accountability.

About eight months ago, Media Storm started working with the leading third-party advertising fraud prevention agencies and began deploying solutions across campaigns. By creating accountability and complete transparency in all aspects of media and recommended bot-traffic, viewability and brand safety protection, we have been able to proactively prevent non-human, non-viewable traffic and ensure that we’re serving impressions in brand-safe environments.

That’s encouraging, but it isn’t a solution, and I think both the buy side and sell side can agree that it is in everyone’s best interest to actually solve the problem. That leaves two very big questions to be answered:

  • Who can actually solve the problem?
  • How should we pay for it?

Who will have to make the changes?

Making this happen will require action from three major industry factions: the buy side, the sell side and the IAB.

From the buy side, we have to provide full transparency to our clients. This involves working only with partners who provide full transparency and implementing protection to ensure that all traffic comes from humans. And yes, this will mean refusing to work with publishers who don’t sell “real” traffic with implemented protection and who don’t sell based on viewability verification with brand safety measures.

The sell side should work directly with a third party to remove fraudulent impressions and sell with third-party verification guaranteed on bot protection, viewability and brand safety.

Lastly, in order to have a marketplace based on new rules, we’ll need the IAB to update its standard terms & conditions (T&C) that we all utilize as a base in buying and selling online advertising. The T&C update will need to establish fair rules to conduct business only on “real” traffic and to sell on viewability and brand safety.

The cost of accountability and who will have to pay for it:

All along, the buy side has operated with the assumption that we are getting what we have purchased. Ad fraud is a threat to that assumption, and I think the responsibility for direct payment should come from the publishers. There, I said it. Someone had to.

I realize this may not be what the publishers want to hear, but they can look at it as a form of insurance on their side. And though advertisers shouldn’t directly pay for the “insurance” as a separate line item, I think the general industry would understand if some cost has to be passed on as the cost of technology/product development. It is business after all.

The time is now: Let’s make digital media truly accountable

Media overall operates under the trust that what you buy is what you get. For example, we can verify the placement in TV, out of home and print. But in digital, especially with programmatic audience buying, the “proof” often sounds something like this: “You won’t see it directly because you aren’t in the target audience, but we assure you that it’s running and here are our reports.”

If we don’t clean this up now, ad fraud will erode the trust in digital and damage the overall industry (even more than it already has). As TV moves more from spots to addressable inventory, this threat is amplified. Digital is an accountable medium, and we need to embrace that accountability. I believe that there is a higher ground and a higher accountability for every dollar that moves to digital from other media.

So join me in this fight to maintain industry credibility, won’t you?

Asian American’s that are Shaping the Media World

May is Asian Pacific American Heritage month.  It struck me that Asian American’s have and are playing an increasingly prominent role in shaping our media industry.   What’s even more impressive is they’ve achieved a career in media, despite overcoming their Tiger Parents disappointment in them not becoming doctors or working in the family business!

So here’s my list of Asian American Media Mavens.

connie chung geri wang

Hall of Fame News Broadcaster

Connie Chung broke through the news broadcasting ceiling by co-anchoring CBS Evening News all the way back in 1993.  It’s a rarity these days not see a female presenter on national or local TV news channels, thanks to Ms Chung.

 

Shrewd-ist Ad Sales Exec

Geri Wang, President of ABC Sales. This Upfront, look for Geri to beat out some CPM increases from Agency Media Buyers.

 

william hung Reality Media All Stars

This has to be a tie.  American Idol hopeful William Hung was the first reality star that most fellow Asian’s would rather forget.  His “She Bangs” performance helped foster American Idol notoriety and YouTube fame.  But we at least were able to move on and progress, when America saw its first Asian American  reality show winner when Yul Kwon managed to be last Survivor standing on the island.

 

jerry yangBest of Asian American Media Tech Geeks

… at the top of that tree are Jerry Yang founder of Yahoo!, Steven Chen co-founder of YouTube, not to mention some budding new tech-preneurs such as Brian Wong, the youthful founder of Kiip.  Also, I’m a fan of David Shingy, technically not American, an Aussie who’s definitely a forward thinker for the industry.  Try to if you can, get the chance to hear him speak.

 

lingmindyActresses that make us laugh most

I met Lucy Liu at last year’s CBS Upfront party, currently starring as Watson in the delightful Elementary.   But it was the Queen’s NY native role in Ally McBeal that to me was a break out for Asian American’s on television.  The producers of that show chose not to type cast the sultry Asian mistress or kung fu kicking villian, but quirky Ling, surely the most interesting character on the show.  I loved Mindy Kaling in the office and the delectable The Mindy Project.  And I really like little known comedy Sullivan and Son, that just starting its second season on TBS this week, whose lead character is Asian.  But the real star is Jodi Long who plays his Korean mom who probably breaks every rule in the PC Asian playbook, but leaves me laughing out loud.

 

danielBest Asian Hunk

According to my wife, Daniel Dae Kim.

 

Most powerful Media Owners in the Future

The arguably the most powerful Asian American’s that may inherit the media world might be two teenagers … Grace & Chloe Murdoch, Rupert Murdoch and Wendy Deng’s two daughters, who potentially could inherit a significant portion of NewsCorp and  21st Century FOX empires.

 

Most Innovative Media Client (and Hardest Partier)

Babs Rangiah, Vice President, Global Media Innovation & Ventures for Unilever who has helped to bring innovative media campaigns for Axe and Dove.

Cosmopolitan Magazine Innovates with it’s L’Oreal Sponsored Cover

 

Cosmopolitan magazine is causing a bit of a stir with its upcoming May issue cover. No, it’s not promoting a risque sex survey or planning to scoop Vogue with a Kimye cover of its own. Rather, the publication has the audacity to feature a pasted-on cover for its subscription copies, sponsored by L’Oreal Paris. The extra cover was produced by the edit staff and includes a tease about a L’Oreal contest alongside actual unpaid editorial cover lines. Traditionalists are asking, “Is this a blurring of the lines?”Fashionista raised the question of whether Cosmo had possibly violated The American Society of Magazine Editors’ guidelines.

Are they kidding? Right now, the publishing world should be challenging convention. It needs to. The media industry is being disrupted and the traditional business model isn’t keeping up. Newspapers have been decimated. The magazine business isn’t far behind. According to the Association of Magazine Media, ad pages have fallen a staggering 40% in the past five years. This despite the fact that magazines are showing increased readership when measured across print and digital channels. The magazine publishing industry doesn’t have an audience issue — it has a revenue issue.

For publishers to survive and thrive, they need to find more ways to attract marketing dollars. I applaud this initiative by Cosmo’s publisher Hearst and kudos also to L’Oreal for picking it up. The magazine industry has to find more creative and commercial ways to monetize its assets.

Just providing eyeballs for ads isn’t enough, because in media, there’s no shortage of them.

Total television viewing hours continue to climb. The supply of online display ad impressions appears almost infinite. Time spent with social media is now over three hours a day, up from nothing seven years ago. And the increased access to media via mobile is adding to the daily media diet. As a result, the value of the ad impression is diminishing.

Magazines have assets that brands want. Magazines have insight into what engages readers. They know how to continue to stay relevant and current. They create content that people notice and share. They provide ideas. Finding new ways to tap into and integrate with this content is a whole lot more exciting for brands than interruption.

But will this turn off consumers?

Consumers get that someone has to pay for the content. Most consumers are savvy and pragmatic when it comes to advertising.

They know that advertising subsidizes their magazines. They understand that advertising by and large pays for their favorite TV shows, nearly all the content on the Internet, Google and Facebook, and even public radio.

Of course, if you ask a consumer if they want advertising, they will answer “no.” But the increased time consumers are spending with commercial media suggests that consumers accept the exchange.

Advertising is evolving. Consumers also know that the face of “advertising” is changing. We continue to add dozens of new formats. We now have: native ads, custom commercials on Jimmy Kimmel, Ford music videos on American Idol, sponsored stories, branded entertainment,unbranded content, viral videos, crowd-sourced content, influencer marketing, music/artist collaborations, mobile apps, in-game brand experiences, newsroom generated real-time messaging and value brand exchanges. Not only do consumers accept these newer forms of “advertising,” they are actually talking about them when they’re clever.

In the context of these added media channels, a sponsored cover seems tame.

Smart brands and publishers will always default to the reader’s point of view. I believe that most brands understand the importance of showing care in how they talk to consumers in these newer media formats. Crucial to this is respecting their time and intelligence. L’Oreal could have been more overt. But it appears they let the editors guide them. In today’s social-media driven world, they will quickly hear if things start to wrangle.

We all want a healthy magazine industry. For that to happen, magazines need to be more attractive for brands. Innovating and experimenting with new solutions can only be a good thing.

Chipotle’s Unbranded Entertainment Marketing Coup … Farmed & Dangerous

chipChipotle did something radical last month. The company introduced its very own TV series, airing on Hulu. The first three 22-minute shows in the four-episode comedy series, titled “Farmed and Dangerous,” are now available for viewing.

It’s another example of the Mexican restaurant chain challenging industry convention. In 2012, it picked up the Cannes Grand Prix for its animated “Back to the Start” two-minute music video, which ran to a Willie Nelson cover of Cold Play’s “The Scientist.” That ad promoted the story of Chipotle’s locally farmed ingredients.

“Farmed and Dangerous” takes branded content to another level by not including any branding at all in the show. Social Media Week organizers dubbed it Unbranded Entertainment. Chipotle and other advertisers placedcommercials in the show, but by not including branding in the show itself, the restaurant has taken a risk that few marketers would entertain.

But Chipotle’s chief marketing and development officer, Mark Crumpacker, said on a panel at Social Media Week, in which I participated, that he didn’t consider it a big risk at all. Citing McDonald’s significant marketing budget, which dwarfs his company’s, he said Chipotle couldn’t afford to rely on traditional advertising. The hope is that PR, buzz and social media will do much of the heavy lifting for the chain’s message.

This is an interesting, albeit untested, new broadcast model for marketing. We’ve already seen Netflix and Hulu create premium original content online to compete again broadcast and cable networks. Chipotle’s concept is to create an own original entertainment show that somehow presents its messge while it shares in the income of ads being placed on the show by other companies.

This model makes sense, of course, only if the right target audience, specifically Millennials, watches the show. What does the show have to do to succeed?

First, it has to be genuinely entertaining. Wisely, I think, “Farmed and Dangerous” is a satire. The lead character,Buck Marshall, played by Ray Wise, is head of the Industrial Food Image Bureau. Wise’s character represents big-business interests that attempt to put a positive spin on genetically engineered foods.

Second, the show must have a message that connects with audiences. The serious message here is about the importance of food safety and sustainable farming. These are issues that Chipotle has championed from the start and are a concern for a growing section of the population. Chipotle reasons that as more people are discussing these issues, more of them will choose its brand.

Third, the show needs to walk a fine line between offering pure entertainment and overtly pushing the brand. Cross that line, and marketing savvy Millennials will turn off. Chipotle has chosen not to make references to the brand in the body of the show.

Twenty-two minutes of content and no burritos in sight. Only a handful of brands would attempt this. But, get the mix of story and message right, and you have content that consumers will want to watch, talk about and share.