January 18, 2020

Customers, not cookies: How to avoid ad fraud

minute read

Cookie-based targeting could cause your business to hemorrhage money and hinder campaign performance. Here’s how to protect your advertising budget, improve performance, and make a stand against ad fraud: Switch to people-based targeting instead.

No business is safe from ad fraud.

Although ad fraud detection and prevention technology have made great gains in recent years, ad fraud losses are projected to reach $5.8 billion USD globally by the end of 2019, and some reports predict these losses will rise as high as $44.4 billion USD globally by 2022. Additionally, according to a report released by cybersecurity leader White Ops and the Association of National Advertisers, fraudulent impressions can represent up to 37% of an advertiser’s total impressions.

Think about the amount of money you spend on paid ads in a typical year. Now, imagine more than a third of it stolen by machine-generated clicks.

If that thought upsets you, it should. Businesses should not sit back and ignore the fact that significant portions of their ad spend are being drained by fraudulent activity.

And if the sheer loss of ad budget weren’t enough, ad fraud also skews the performance metrics that digital advertisers use to measure the impact of their campaigns. Bots can cause jumps in website traffic and click-through rates, key metrics businesses use to make data-driven optimization decisions. If you’re adjusting your campaigns based on warped cookie-based data, you could be optimizing your paid ads to target bots instead of humans.

Paid ad fraud isn’t a one-and-done offense—it’s a pervasive crime that slowly eats away at the efficacy of your overall paid strategy and interferes with your growth.

Advertisers need to adopt an ad targeting solution that doesn’t chase potentially fraudulent, third-party cookies around the internet but rather targets real people with relevant ads.

People-based targeting will keep advertisers afloat in the post-cookie era

Third-party cookies are no longer as strong or as safe a resource as they once were.

Between the inconsistent nature of cookie tracking itself; the potential for fraudulent activity; and the majority of modern consumers accessing channels, such as mobile devices, that do not support cookie tracking, cookie-based targeting is quickly losing its appeal.

Instead, leading businesses have made the shift to people-based targeting, which tracks customer identities across channels with a unique identifier like an email address. By targeting individual users instead of cookies, you can reduce the potential for fraud and retarget customers consistently across all channels, including desktop and mobile.

People-based targeting uses first-party data, which is collected directly from consumers. Because businesses collect it directly from the individual, they can be more confident in its quality, relevance, and compliance—plus, it’s relatively cheaper and easier to manage than second- or third-party data.

Furthermore, we’ve all experienced the annoyance of being served ads we weren’t interested in. Today’s consumers are frustrated by irrelevant ads following them around the web and respond more positively to personalized content delivered to them at the right time, in the right channels. People-based targeting enables retailers to provide this personalization more easily. By leveraging omnichannel data sources, including historical online orders, in-store orders, call center interactions, and customer surveys, you can increase the relevance of your messaging. More relevant ads mean higher engagement rates, which ultimately lead to higher returns-on-ad-spend (ROAS).

To succeed with people-based targeting—and mitigate the risk of ad fraud—businesses need to first create a centralized view of their customers.

Battling ad fraud with an enriched single customer view

People-based targeting isn’t possible without a clear, clean, and unified customer database.

By integrating your retail systems and aggregating customer data based on the individual—not the channel—you can gain a deeper understanding of your customers as people. Ultimately, restructuring your data to focus on human behavior and interests will help you avoid spending budget on bots and more accurately measure the impact of your campaigns.

And the best way to do that is with a customer data platform (CDP).

Unlike data management platforms (DMPs), which track online behavior using anonymous cookies, a CDP securely identifies users through Personally Identifiable Information (PII) and syncs their behavior to their core profile. It collects, connects, and enriches privacy-compliant insight about your addressable past, present, and prospective customers.

Shifting your business’s data from siloed, channel-led tools to a single, customer-centric hub makes it easier to hone and personalize your paid ad campaigns. Once you understand who your highest-value customers are, you can optimize your ads for them across all channels.

Lexer humanizes data for secure, one-to-one engagement

Certain types of ad fraud mean that a large percentage of your ads’ views will be non-human. It’s time for businesses to reconnect with the humans represented in their customer data, build better relationships with their customers, and optimize their digital ad campaigns around human behavior, not bot behavior.

Lexer’s CDP can help you unify, enrich, and activate your customer data. By pulling together all of your purchase, product, loyalty, digital behavior, and engagement data and transforming it into a 360-degree view of your customers, the CDP provides invaluable insights to inform your ad campaigns. Additionally, the CDP is enriched with third-party data to validate your information and remove junk, bots, and spam.

Are you ready to feel more confident in the compliance, accuracy, and relevance of your customer data?

Book a demo with a member of the Lexer team to learn more.

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Elizabeth Burnam
Content Marketing Specialist
Elizabeth Burnam is a content marketer and a poet at heart. She has a degree in Professional Writing and experience developing high-impact marketing assets for a broad range of industries.Outside of work, she enjoys reading, painting, people-watching, and exploring the natural wonders of Vermont.