It’s that time of the year again! Leaves turn to gold, nights get longer and Black Friday Sale walks the red carpet! Brands shower their consumers with mouth-watering deals; bargain hunters chase and scout the digital web to grab the best offer. This time of the year is indeed the most awaited season for brands and consumers alike, as well as for online scammers because the festival season becomes a playground for their nefarious activities.
Owing to Covid19, there’s been a splurge in online buyers in order to minimize the risk of contracting the disease. With the onset of the festival season, the trend is here to continue as consumers will be shopping for holiday season and gifts at the comfort of their homes. As brands gear up to make the most out of the festival season by maintaining checks and balances across customer service, staffing, and delivery, they also need to ensure that their business is protected against fulfilling inventory requirements and fraud spikes.
Festival season becomes a critical period for advertisers as well. In order to grab consumer attention and compete in a cut-throat competition, they spend a significant part of their budget in Q4, with as much as 40-50% payouts expected to go towards Black Friday campaigns. The exponential rise in digital ad spending also needs to be looked at in tandem with the rise in ad fraud during the holiday season.
Last year, the US economy witnessed an upsurge in digital ad spending during the holiday season with as much as 3.1x more spending on ecommerce channels, 2.9x on paid search, and 2.1x on social advertising. The Americans spent 116.6 million hours shopping online during Black Friday thus marking 2020 as the second biggest online shopping day in history. Higher traffic coupled with high ad spending translated into more opportunities for seasonal ad fraud to take place. Across the U.S., $86 million was reported lost in 2020 from frauds.
During the Black Friday promotions when prices are slashed to drive sales, it attracts fraudsters who post fake advertisements (posing as trusted brands). The consumers never receive the goods they ordered but they’ve (unintentionally) shared their personal information including card details. This not only affects the consumer but affects the reputation and goodwill of a brand. Studies have indicated that exposure to ad fraud during the Q4 is 17% higher than the rest of the year, affecting marketing budgets and brand safety.
Wasted Ad Spend
Fraudsters enjoy the revenue share of a marketers’ budget which would otherwise be spent on acquiring real (real human) users. For instance, marketers can see a significant number of clicks on their advertisement but with little-to-no conversions. This is because fraudsters redirect or click spam in order to spoof the analytics and the marketers are left wondering.
In one such scenario, fraudsters fired an enormous number of clicks to claim app installs along with the event of that install. A UAE-based fintech app witnessed 9 billion clicks accounting for app installs. The company was paying out on real account opening post verification. Guess UAE’s population- less than 10 million!
Affiliate Fraud and Competition Bidding Fraud
Ensuring compliance with your brand keywords on Search is extremely critical, especially during the festive season. One could be letting go of their ‘almost’ organic users being stolen and getting them back as ‘inorganic’ users via affiliates. The affiliates start bidding on your brand keywords and take the user back to the original website, but with the UTM parameters of the affiliate attached. In short, your organic users are now inorganic users and you end up paying for your own users to your affiliates. The bid rates of the branded keywords also increase as the competition is bidding against the same brand keywords, opening doors to invalid/bot traffic. Ultimately, everyone makes money from the advertiser, at the cost of the advertiser.
Messed Up Analytics
Data is the new oil. The decision-makers rely on data to drive their strategic decisions. But, what if the data is spoofed and you do not know what’s working and what’s not?
Ad fraud ruins the purity of the analytics: skewed data means that the right decisions cannot be taken to drive sales and make the most out of the black Friday campaigns. Fraudsters’ actions of pixel stuffing will signify high impressions but low click-through. Thus the inference drawn by marketers would be that the ad is not targeted or well designed and they’ll rethink the campaign, which otherwise would work perfectly well. Therefore skewed campaign statistics will result in bad strategy management resulting in negative sales or diminished ROI.
Ad fraud is pervasive. Higher the spend, higher the presence of fraud. This holiday season is all about safeguarding your campaigns from fraudulent elements to make the most out of your bottom line and also increase your ROAS.
Happy and safe festival greetings!