Fraud-free online advertising is nearly impossible – if P&G can’t do it nobody can

Agencies keep giving their clients reports on how 'fraud-free' their online advertising is – and it's all bullshit, argues Bob Hoffman

About a year ago, Procter & Gamble – the world’s largest advertiser – announced that it was killing its “precision targeted” advertising on Facebook.

This came after it had moved a third of its ad dollars on line and lost 8 per cent of sales revenue in a 12-month period. This week P&G had even more dramatic news.

They announced that they had cut over $100 million in online ads from their third quarter spending. According to The Wall Street Journal this “had little impact on its business, proving that those digital ads were largely ineffective”.

“Chief Executive David Taylor said in an interview that the digital spending cuts are part of a bigger push by the company to more quickly halt spending on items… that aren’t working.”

Referring to the problem of fraud in online advertising, P&G finance chief Jon Moeller said one of the reasons for the cut in online advertising was “we were serving (ads to) bots as opposed to human beings”.

One of the lessons here is that no one knows how much bot fraud there is. Agencies keep giving their clients reports on how “fraud-free” their advertising is. It’s all bullshit. If P&G can’t get fraud-free advertising, do you really think you can?

Despite the hysterical appetite for online advertising on the part of the marketing community, I still remain highly sceptical about its effectiveness for brand marketers. In fact, I’m getting more skeptical by the day.

A look under the hood

Recently some people who specialise in helping advertisers minimise ad fraud gave me a look under the hood of one of their projects. The project concerned an online retailer and a very large online media company.

The report was shocking. The advertiser was spending over US$1 million a month on pay-per-click advertising and at times was being overcharged by 60 per cent.

Dumb-guy blogger takeaway: You almost have to be a coder or a software engineer to get the full scope of what’s going on. Unless you can get your hands on the code, and know how to interpret it, you have no idea what you’re being charged for. At least I wouldn’t. The reports you get are highly unreliable. According to these people, at least half the head digital media honchos at agencies have only a superficial idea of what’s going on.

Maybe we’ll finally get a peak

Despite the fact that billions of dollars are being stolen annually from advertisers by fraudsters, in the United States no one has ever been prosecuted for click fraud. The first such trial begins this week in Brooklyn. Maybe we’ll finally get an ‘official’ look at how some of these creeps operate.


According to an article in the San Francisco Chronicle: “There is a growing sense that something should be done about the growth, largely unchecked, of tech giants and the impact they are having on the economy, employment, privacy, news (fake and real) and income inequality. The problem is, nobody knows what action should be taken.”

Bob Hoffman has been the CEO of two independent agencies and is the author of the Ad Contrarian blog


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