Ad fraud ‘most important’ issue for the industry: Mondelez’s Karens

At last Wednesday’s ACA Forum, “Taking a Hard Line with Online,” ad fraud was top of mind for marketers.

“Of all the things we should be focusing on, this is it,” said Mondelez director of media and agency partnerships Kristi Karens, speaking about the advertiser dollars wasted on fake ad inventory. “There’s a lot of other things I do in my role. I spend a lot of time on content, creative, and other things. But in terms of the industry, [fraud] is absolutely the most important thing we should be spending time on.”

Like other marketers, Karens said she is frustrated with the quality of online ads in the marketplace and the industry’s slow response to the problem. But she also said it’s not enough for marketers to stamp their feet and expect the supply chain to fix itself.

“The problem is not going to go away,” she said. “You’ve got to understand what you are frustrated about, and then figure out what steps you need to take to solve it.”

Karens was part of a panel the ACA convened to discuss fraud, viewability and other issues affecting the quality of online advertising, along with fellow marketers Ricardo Martin, Unilever Canada’s VP of brand-building, and Khoi Truong, L’Orèal Canada’s director of media and data optimization. ComScore Canada president Brent Bernie and Starcom MediaVest group director Terry Chang also sat on the panel, while Index Exchange’s Andrew Casale moderated.

Fraud dominated much of the conversation, in part thanks to a presentation earlier in the morning by Sentrant, a Canadian advertising security firm (formerly known as Ara Labs). Sentrant president/CEO Allen Dillon told the assembled marketers that their “current approach to security is failing,” and stressed that advertisers’ money is funding criminal activities worldwide. “Cheap traffic is everywhere, poor data and metrics are everywhere in the system,” he said. “At the end of the day the industry has no security culture.”

Time for brands to get involved

The marketers on the panel were in agreement that it was time for advertisers to step into the fight against fraud.

“We have a big part to play as advertisers,” said Truong, who oversees both L’Orèal’s media planning division and customer analytics. He said the first step marketers need to take toward stopping fraud is to accept that it’s happening, and that it’s likely happening to them. Marketers and media buyers can’t “hide it in powerpoints” and gloss over the impact of fraud on their bottom line, he said. They need to acknowledge that fraud is real.

But, he was also clear that taking a hard line on fraud and other ad quality issues doesn’t necessarily mean backseat driving with your media agency. Despite the impulse marketers have to be “control freaks,” he said, they don’t have the time or manpower to micromanage every media buy. It’s more important to have transparency into what the agency and other partners are doing — to keep an eye on performance, and be alerted when something goes awry. L’Orèal has taken a big step towards that transparency by making it a policy to be the account owner on the platforms its agencies use for media buying and analytics, which gives Truong and his marketing team top-level access to reporting and real-time alerts.

Karens echoed the point, arguing that it’s not so much about controlling your own media buys as having a direct relationship with the partners involved and getting to know the tech they’re using. Many advertisers are satisfied with letting their agencies decide which platforms to use and which supply sources to tap into, but Mondelez has led the way in taking direct ownership of contracts with third party programmatic partners. Last summer, it created a “hybrid model” programmatic trading desk for audience-targeted video, which uses a technology platform partner vetted by the brand, but is still operated by its agency Starcom rather than an in-house team at Mondelez.

“I cannot control everything, unless I was to change the entire structure of our organization. So part of that comes down to the trust you have in your partners… and then together understanding what the standards are, what the metrics and KPIs are, right at the onset,” Karens explained.

Asked whether Mondelez has held back spend in digital or programmatic because of the risks posed by fraud, Karens gave an emphatic no. “We have to continue to be brave, be bold, and look at the data we’re getting,” she said. “We believe we’re investing where we should.”

The need for a central fraud identification database

Index’s Casale brought up an initiative underway in the U.S. by the Trustworthy Accountability Group (co-sponsored by the IAB, ANA and 4A’s) to build a communal blacklist where suppliers, verification companies, agency buyers and marketers submit real-time data on sites and sellers they have identified as fraudulent. TAG says by centrally sharing information about fraudsters, the industry and all its stakeholders will be able to react much more rapidly to new threats, and hopefully screen out fraudulent inventory as its created.

It’s a bold idea, and it could make it much harder and more expensive for bad actors to deceive advertisers. But to work in practice, it will need a lot of buy-in across the industry. One of the reasons a communal blacklist hasn’t been set up before now is that vendors and agencies have been reluctant to give up their hard-won ad quality data to competitors, unless they’re getting at least as much value out of it.

Terry Chang from Starcom expressed reticence along these lines. “If someone asked me, ‘Would you be prepared to share your presentation today ahead of time to all the other presenters?’ I would say, ‘I will, on the premise that everyone else pre-shares it as well,'” he said. He said sharing Starcom’s list of 1,700 fraudulent domains would be on the table, but only if it was contributing to a list of 17,000.

To the marketers, things were more black-and-white. Not sharing information on fraudsters “is like if we were to spot criminal activity on the street and kept it to ourselves,” Martin said. “Of course if you find criminal activity you report it to the police. When we spot something that is fraudulent, or noncompliant with the standards, it needs to be reported somewhere.”

Karens agreed. “I think that’s where energy, smarts and resources need to be placed, so we’re not having the exact same talk a year from now,” she added.

Though the industry has been slow to react to fraud, the panel was optimistic about growing awareness among advertisers, and the pressure they’re exerting on the supply chain to take action. Bernie — who’s been president of ComScore Canada for the past 13 years — said he sees marketers getting much more directly involved with their vendors and contracts, and asking much more sophisticated and pointed questions.

“I’m going to go out on a limb and say this is the year we are going to make a move as an industry,” he said.

Truong, the self-identified realist of the group, wasn’t so sure that a turning point has been reached. He said he expects fraud to still be a major topic at next year’s ACA Forum.

But he also said by next year, the tone will have changed. Instead of discussing the urgency of the problem, marketers will be talking about the progress they’ve made towards solving it.

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