As CMOs Spend More on Mobile, Budgets Are Eaten Up by Fraud
What: Mobile Fraud: Marketers' Massive Hidden Threat, a Forrester Consulting "thought leadership paper" commissioned by AppsFlyer, looked at how CMOs are tackling the ever-evolving challenge of ad fraud, and the cost that ineffective prevention has for businesses.
Why It Matters: The study found that while investment in mobile ads is increasing, only one in five advertisers said they're able to systematically combat fraud with the right tools and expertise. Why aren't marketers taking this growing risk head-on?
For the study Mobile Fraud: Marketers' Massive Hidden Threat, Forrester and AppsFlyer conducted an online survey with 250 marketers whose companies spend at least $1 million dollars a month on digital advertising and found that mobile is attracting more and more ad spend: 70% of the enterprise marketers surveyed for this report are increasing their budgets for mobile advertising over the next 12 months.
But with ad fraud eating up a bigger chunk of many organizations' budgets, a more focused and deliberate approach to prevention is needed. Why aren't organizations doing more to better equip themselves to fight this growing threat?
Despite Risk of Fraud, Marketers Increasing Investment in Mobile Ads
The data from Forrester reveals that resistance to ad fraud is sub-par across the board, as 69% of marketers cite that at least 20% of their budgets are exposed to fraud on mobile web ads. But this doesn't correspond with lower investment in mobile ads.
According to the report, over the next 12 months, 70% of firms that spent over $1 million per month in digital advertising in 2017 said mobile ad spend budgets will increase in the coming year, and 39% of companies that spent over $5 million per month on digital advertising plan on increasing their budgets by more than 30%.
In the meantime, too many organizations are left completely vulnerable: the study found that only 19% of enterprise marketers claim to have systematic fraud prevention in place. The reasons for this are quite simple: a lack of access to transparent data and a lack of knowledge about programmatic buying.
Almost half (45%) said they lack the understanding of mobile ad frauds that exist and then lack the types of solutions that exist to combat those mobile fraud types, and 51% of marketers cite a lack of data transparency. Marketers also seem to believe that many distort data in this complex ecosystem for their own benefit, with 46% of marketers reporting that "players in the media buying ecosystem benefit from artificially inflated KPIs."
As a result, a huge slice of the market is left accepting fraud's impact as a given, unable to keep up with the way approaches to fraud evolve and become more difficult to shut down. But the study suggests that marketers know they must change their ways if they are to stay afloat: 92% of advertisers and agencies cited fraud prevention as a critical or high priority over the next 12 months.
CMOs Don't Think They Can Keep Up with Ad Fraud
The research from Forrester seems to suggest that many CMOs simply don't believe there is a way to keep up. Ari Rosenstein, Senior Marketing Director at AppsFlyer asserted that often, organizations "accept fraud as 'the cost of doing business' because they don't believe they can effectively protect themselves against all types of ad fraud." The data supported this assumption, as 40% of those surveyed agree that "those who try to combat fraud are faced with a fast-evolving problem which makes it hard to identify and often even just understand."
And since these CMOs are often ill-equipped in the data analytics department, they have a hard time even estimating how much of their budgets they are really losing to fraud, often estimating around 1-2% when the average, Rosenstein suggested, is more like 10%.
Mobile Enables Novel Approaches to Ad Fraud Prevention
The benefits of investing in a solid ad fraud prevention plan are varied: the study asserted that benefits include improved ROI, better campaign insights, easier optimization, and increased user engagement.
And luckily, Rosenstein argued, mobile is offering CMOs some of the most user-friendly, flexible fraud prevention tools ever: "As mobile fraud has continued to evolve — with the emergence of install hijacking, click flooding, device farms, DeviceID Reset Fraud, etc. — so have the technologies and processes to identify fraud." But CMOs must make fraud a significant priority through investing in data transparency and education for their teams.
Marketers 'Must Become More Educated' and 'Demand Increased Transparency'
A common practice is for marketers to turn to legacy technology tools and platforms for help instead of seeking experts: 48% of those surveyed reported using enterprise marketing software vendors for help with measuring and combatting fraud, and 38% reported relying on ad verification vendors. The suggestion is that CMOs should recognize that fraud prevention merits its own investment, and that specific expertise in fraud is necessary for fighting such a serious threat.
For 53% of marketers, a basic strategy is to assign fraud-related KPI's to their agency or ad networks. But the study reminds us of the importance of following up and ensuring that those KPIs are met. While 60% of advertisers and agencies cite better campaign insights from improving mobile ad fraud prevention, the study provides evidence that "prevention" must mean educating internal teams about the latest strategies in fraud prevention and asking for more information and collaboration from vendors. It is also essential that organizations add "independent, mobile-first tools" to their arsenals, the report suggests.
Those who are serious about lessening the impact that fraud is having on their business should be deliberate in pursuing a fraud prevention plan that works for their organizations. For AppFlyers' Rosenstein, education and transparency must take on central roles in all marketing departments. "Marketers must become more educated on the topic and demand increased transparency and data visibility from their vendors and partners," he said. "Through these mobile insights, marketers can become more informed and make better decisions for their businesses."
By Gretchen Gardner @gardnergretchen
Finance Latin America 10/14/2013
Foursquare now allows small businesses to advertise on its platform
What: Foursquare has just announced its advertising platform is now open for businesses of all sizes, all over the world. Why is it important: Social networking sites have evolved and are finding creative, useful ways to monetize their platforms, through well-planned and previously tested initiatives. Since it opened its platform to a limited number of large advertisers, about nine months ago (launching a self-serve version later on, for some selected small businesses), Foursquare has been aiming towards the evolution of its business so as to better serve its 40 million users worldwide, moving forward from being a simple "check-in app" to proving it has a true monetization advantage, specifically in terms of advertising spaces within its platform. Today, the company has unveiled its latest development on that front, Foursquare Ads, which is now open for advertisers of all sizes. Beginning today, small businesses all over the world will be able to create their own promotions directly on Foursquare's ads dashboard. Foursquare is banking on its location-based check-in services to set it apart from competitors like Google and Facebook, as engagement will be measured by how many people actually visit the place in question, and advertisers will be charged based on that.
This is the first at-scale global platform that lets small businesses all around the world buy on a hyperlocal level to find nearby customers.
–Steven Rosenblatt, Foursquare's chief revenue officer.
According to TechCrunch's Ingrid Lunden, Foursquare is hoping to tap into the 1.5 million small businesses that have already registered their businesses for free on the service (that's up from 1.3 million in April this year). While registering will already make those businesses discoverable through Foursquare's apps and website when people search for restaurants or other services in their vicinity, the idea here is that buying ads will give these businesses an extra exposure lift. For now, the ads will be running just on Foursquare's own mobile and web platforms. The advertisement-posting process is very simple, because "so many small businesses are still lacking in digital and social media literacy", says Steven Rosenblatt, Forsquare's CRO. ""They don't really know what a like means. They don't really understand clicks for that matter." Forbes reports that an action at a coffee shop, for instance, where consumers are only likely to spend a few bucks, might cost the advertisers $1 to $3, while the same action at an upscale restaurant would probably be $5. Mashable's Todd Wasserman elaborates to say that with Foursquare's new self-service page, businesses can state their business needs and budgets, and Foursquare will do the rest. "You can say, 'Here's the business I want to drive traffic to, here's how much I want to spend and here's my monthly budget. Go for it,'" says Noah Weiss, Foursquare's director of product management. Foursquare will provide metrics for the ad, including the number of views, actions, action rate and cost per action. Sources: TechCrunch, Forbes, Mashable.
What: Foursquare has just announced its advertising platform is now open for businesses of all sizes, all over the world.
Why is it important: Social networking sites have evolved and are finding creative, useful ways to monetize their platforms, through well-planned and previously tested initiatives.
Since it opened its platform to a limited number of large advertisers, about nine months ago (launching a self-serve version later on, for some selected small businesses), Foursquare has been aiming towards the evolution of its business so as to better serve its 40 million users worldwide, moving forward from being a simple "check-in app" to proving it has a true monetization advantage, specifically in terms of advertising spaces within its platform. Today, the company has unveiled its latest development on that front, Foursquare Ads, which is now open for advertisers of all sizes.
Beginning today, small businesses all over the world will be able to create their own promotions directly on Foursquare's ads dashboard. Foursquare is banking on its location-based check-in services to set it apart from competitors like Google and Facebook, as engagement will be measured by how many people actually visit the place in question, and advertisers will be charged based on that.
According to TechCrunch's Ingrid Lunden, Foursquare is hoping to tap into the 1.5 million small businesses that have already registered their businesses for free on the service (that's up from 1.3 million in April this year). While registering will already make those businesses discoverable through Foursquare's apps and website when people search for restaurants or other services in their vicinity, the idea here is that buying ads will give these businesses an extra exposure lift.
For now, the ads will be running just on Foursquare's own mobile and web platforms.
The advertisement-posting process is very simple, because "so many small businesses are still lacking in digital and social media literacy", says Steven Rosenblatt, Forsquare's CRO. ""They don't really know what a like means. They don't really understand clicks for that matter." Forbes reports that an action at a coffee shop, for instance, where consumers are only likely to spend a few bucks, might cost the advertisers $1 to $3, while the same action at an upscale restaurant would probably be $5.
Mashable's Todd Wasserman elaborates to say that with Foursquare's new self-service page, businesses can state their business needs and budgets, and Foursquare will do the rest.
"You can say, 'Here's the business I want to drive traffic to, here's how much I want to spend and here's my monthly budget. Go for it,'" says Noah Weiss, Foursquare's director of product management. Foursquare will provide metrics for the ad, including the number of views, actions, action rate and cost per action.
Sources: TechCrunch, Forbes, Mashable.