Richard Kahn
How Inferior Ad Fraud Solutions Can Cost You More Than Ad Fraud Itself
It’s no secret companies lose billions of dollars to ad fraud each year. That’s why many companies employ an ad fraud solution to avoid wasting ad dollars and improve campaign effectiveness. Unfortunately, too few are aware of the hidden dangers nor how they impact their marketing campaigns’ ROI and ultimately their bottom line. The average ad fraud solution meant to protect you may be blocking the traffic and stopping you from gathering leads and making easy sales. How? False positives.
An ad fraud solution is essential when you consider that, on average, 25% of online traffic is fraudulent. Savvy businesses know they can’t afford to advertise online without a solution to detect and block the fraudulent traffic that leads to ad fraud.
The challenge is that fraud prevention is a delicate dance. You want a solution that effectively detects and blocks fraudulent traffic, not turns away legitimate customers. Yet that’s exactly what is happening with the average solution and why there is such a high false positive rate.
The average vendor misidentifies 15% of legitimate traffic as fraudulent.
When a real visitor—a real human with a real interest in your products or services—is incorrectly identified as a fraudulent visitor, that’s a false positive. False positives create a new set of problems for your business and defeat the purpose of having an ad fraud solution in the first place.
Your Fraud Solution Could Be Turning Away Your Best Customers
Remember the scene from “Pretty Woman” when a scantily clad Vivian, played by Julia Roberts, walks into a Rodeo Drive boutique with money to spend on a new wardrobe? The salesperson tells her she is obviously in the wrong place and asks her to leave. Vivan returns the next day dressed to the nines and with her arms full of shopping bags, none from the shop she was asked to leave. She lets them know they made a big mistake by turning away her business.
Big Mistake! Big! Huge!
If you think that could only happen in the movies, think again. We know of a frequent shopper of a popular beauty brand who was unable to complete a legitimate purchase on the store’s website because her visit was flagged as fraudulent. After trying multiple times, and from different browsers, she gave up and was so frustrated she no longer shops there and has taken her business elsewhere.
This is what happens when your ad fraud solution makes a false positive determination. You’re not only losing out on that one sale, but you’ve also likely lost the opportunity to regain that consumer’s trust and business.
Unfortunately, it’s happening a lot more than you realize.
We’ve found that, on average, most fraud solutions turn away approximately 15% of legitimate traffic. You read that right, and frankly, that’s a conservative estimate, with some anecdotal false positive estimates as high as 50%.
The Direct and Indirect Costs of False Positives Drain Ad Spend Budgets and Sabotage Long-Term Profitability.
What does this all mean in real dollars? Giving one lump number or percentage is impossible because of many variables, such as the average acquisition cost, profit margin, and customer lifetime value.
However, let’s explore what happens with a high-traffic site that gets 100,000 monthly visitors. In this example, approximately 2.5% of all visitors make a $100 purchase each, totaling $250,000 in sales. What happens when 15% of that traffic gets flagged and turned away before even entering the site? In this scenario, they’ve lost $37,500 in direct sales.
The red line represents how much money is lost in false positives with an ad fraud solutions that isn’t accurate. If you spend $100,000 on digital ads, you lose $3,750. The more you spend, the more you lose. With a million dollar spend, you are losing $37,500 just in direct costs - never mind the hidden costs.
Now, add in the cost of the ads, the ad fraud solution that declined these customers, and the fact they may never return to your site—not to mention them taking to social media to describe their experience and encourage others to avoid your site. The losses quickly add up.
As discussed in other articles and our eBook, What Is the Cost of Ad Fraud and How Does It Impact Your Business?, ad fraud and inferior ad fraud solutions have a more significant financial impact than on the surface. Read more about it here.
When It Comes to Identifying Fraud, Accuracy Matters
No one should settle for an ad fraud solution that turns away nearly as many legitimate visitors as fraudulent visitors. These solutions defeat the purpose by relying on a specific, faulty set of rules that isn’t effectively stopping fraud but is turning away real customers, real sales, real revenue, and real opportunities. Not only is that the last thing you want to do, but you also can’t afford to have this happen on an ongoing basis.
With Anura, you won’t lose a single legitimate customer. That’s because our fraud solution doesn’t rely solely on rigid rules and a few data points, usually including IP addresses like those on public Wi-Fi that real consumers often use. We use machine learning and hundreds of data points, combined with human expertise, to detect fraud accurately and we’re 99.999% accurate when identifying fraud.
Learn how Anura is eliminating false positives in paid search campaigns.
We continuously monitor results, test rules, and fine-tune our processes. We know that fraudsters are always working on their tactics, so we strive to stay a step ahead. Fighting fraud requires constantly assessing the balance between blocking fraud and preventing false positives, and we’re committed to providing our customers the best of both worlds.
Do you have an ad fraud solution in place today? Do you know exactly how much fraud is being prevented? More importantly, do you know what your false positive rate is? Are you getting what you’re paying for, or is your solution causing you to lose revenue?
These are questions you should ask yourself and your fraud protection partner. If you aren’t comfortable with the answers or if you question whether your solution is living up to its promise, we invite you to compare your current results with Anura. Many of our current customers came to us from another provider by taking advantage of our free 15-day trial and seeing for themselves how much more accurate Anura is at decreasing both fraudulent traffic and false positives.
How can you stop losing money and more to false positives and fraudulent activity? Put us to the test with a free, fully functional 15-day trial.
