Jeromy Sonne, a seasoned digital advertising professional who transitioned from mastering Facebook ad campaigns to becoming a leading expert in fraud detection, is sounding the alarm on the pervasive and increasingly sophisticated nature of ad fraud. His firm, Daypart, provides crucial advisory services to advertising agencies and major advertisers, meticulously scrutinizing the accuracy and legitimacy of their digital ad placements. In a recent in-depth conversation, Sonne detailed the current landscape of ad fraud, offering insights into its multifaceted forms and providing advertisers with actionable strategies for detection and prevention.
The Growing Menace of Ad Fraud
Ad fraud, a term that encompasses a wide spectrum of illicit activities, represents a significant drain on advertising budgets worldwide. Sonne categorizes these fraudulent practices into several key areas, ranging from the straightforward deception of billing for automated bot impressions and clicks to more elaborate schemes involving scam offers and even the sinister undercurrent of money laundering. While fraud can manifest across various digital advertising channels, Sonne highlights that programmatic networks, characterized by their open and complex ecosystem, present a more fertile ground for these illicit activities compared to the more controlled environments of "walled gardens" like Meta (Facebook and Instagram) and Google.
"Ad fraud is an umbrella term," Sonne explained. "There’s the obvious fraud of charging for bot impressions or automated clicks. Then there are instances of advertisers paying, say, $30 CPM for an ad on a TV show but, instead, it ran on a low-quality website. At the extreme end, there’s money laundering, where criminals buy ads from their own shell companies."
The scale of the problem is substantial. Industry reports consistently underscore the significant financial impact of ad fraud. For instance, a report by Statista projected that global advertisers would lose an estimated $58 billion to ad fraud in 2022, a figure that was expected to rise to $100 billion by 2025. This staggering sum underscores the urgency for advertisers to understand and combat these fraudulent practices.
The Nuances of Fraudulent Advertising Practices
Sonne’s journey into ad fraud detection began after a successful career in Facebook advertising, where he honed his skills in mobile app promotion and later, e-commerce. His entrepreneurial spirit led him to found Decibel, an ad tech company focused on podcast advertising, which, despite its innovative approach, did not achieve its desired trajectory. It was during this period that Sonne found himself increasingly engaged in the fight against ad fraud, a path that ultimately proved more successful and impactful than his previous ventures.
"I started in Facebook ads in 2011. I did that for a long time, mainly promoting mobile apps, and slowly switched over to e-commerce," Sonne recounted. "After that I founded an ad tech company called Decibel. It was a platform for podcast ads that, unfortunately, didn’t work out. I then fell into the world of combating ad fraud on behalf of agencies and other ad tech companies. That’s what I’m doing now. It’s been more successful than anything I’ve ever done. We help advertisers by stopping the bad guys. Clients retain me to look into the accuracy and legitimacy of ads."
The spectrum of ad fraud extends beyond simple bot traffic. It can involve advertisers paying premium rates for ad placements that are never seen by actual human consumers, instead being directed to low-quality websites or even fraudulent domains designed to siphon advertising spend. In its most egregious forms, ad fraud can be a vehicle for money laundering, where criminals create shell companies to purchase advertising space from themselves, effectively laundering illicit funds through the digital advertising ecosystem.
Programmatic Networks vs. Walled Gardens: A Tale of Two Ecosystems
When asked about the prevalence of ad fraud on platforms like Meta and Google, Sonne drew a clear distinction. While these "walled garden" platforms are not entirely immune to fraudulent activity, they generally offer a more secure environment compared to the open and often less regulated programmatic networks. Programmatic advertising, which automates the buying and selling of digital ad inventory through real-time bidding, is inherently more susceptible to fraud due to its complex supply chain and the vast number of intermediaries involved.
"It’s worse for so-called programmatic ads, but no, not on walled gardens such as Meta and Google," Sonne stated. "They are nominally better, and the teams there are a bit more responsive to it. But it’s such a complex ecosystem, especially when you’re dealing with crooks running the scams and trying to avoid detection."
The "open web," which includes display ads, video ads, and ads placed within mobile applications outside of major platform ecosystems, often serves as the battleground for more sophisticated ad fraud operations. Sonne estimated that on programmatic networks, upwards of one-third or even more of ad spend could be susceptible to fraud to some degree. This reality underscores the importance for advertisers to exercise vigilance when allocating budgets across these channels.
Detecting the Undetectable: Strategies for Advertisers
The challenge for advertisers lies in discerning legitimate ad performance from fraudulent activity. Sonne emphasizes that transparency and a keen eye for discrepancies are paramount. By meticulously analyzing the data provided by ad platforms and cross-referencing it with their own tracking mechanisms, advertisers can begin to identify patterns indicative of fraud.
"Transparency is the key," Sonne advised. "Given enough data, you can start to put things together." He illustrated this point with an anecdote about a mobile ad campaign that initially appeared legitimate. Upon closer inspection of the device data, Sonne discovered that ads were supposedly running on iPads with Intel chips, a technical impossibility as iPads have never featured Intel processors. This anomaly pointed to a sophisticated scheme of device spoofing and bot farms.
Advertisers can employ several strategies to enhance their fraud detection capabilities:
- Utilize Independent Ad Servers: Running ads through an advertiser’s own ad server allows for direct tracking of impressions and clicks, providing a baseline for comparison against the data reported by ad platforms. Discrepancies can then be investigated.
- Block Suspicious Placements: On platforms like Meta’s Audience Network, advertisers can proactively block specific apps or websites known to be associated with fraudulent activity.
- Analyze Device and User Data: Look for anomalies in device types, operating system versions, geographic locations, and user behavior patterns that deviate from expected norms.
- Leverage Third-Party Verification: Companies specializing in ad verification can provide an independent assessment of ad viewability, brand safety, and the legitimacy of traffic.
"So put on your Sherlock Holmes hat and look for patterns or claims that don’t add up," Sonne urged. "Even Meta has this problem. An advertiser can block shady apps on the Audience Network or even use its (the advertiser’s) own ad server and look for discrepancies between that and what the ad platform says. There’s no magic bullet; it’s trust but verify. When you have a discrepancy, call it out and work with the ad platform to get a refund."
When to Call in the Experts: The Role of Fraud Detection Firms
For many advertisers, particularly those with substantial ad spend, the complexity and resource-intensive nature of comprehensive ad fraud detection can be overwhelming. This is where specialized firms like Daypart come into play. Sonne typically engages with agencies and advertisers who are making significant investments in programmatic advertising, particularly in areas like connected television and audio, often after maximizing their efforts on Meta and Google.
"I generally work with agencies that are spending several million per month on open web programmatic ads, such as connected television and audio," Sonne elaborated. "That’s after they’ve tapped out Meta and Google. So companies spending $25 million to $50 million a year can justify the cost of our services."
The rationale behind this threshold is that the cost of engaging a fraud detection expert must be proportionate to the potential savings and the scale of the problem. For advertisers operating solely within the more controlled environments of Meta and Google, the direct financial impact of fraud might be less severe, and in-house monitoring or platform-provided tools may suffice. However, for those venturing into the broader programmatic landscape, the risks escalate, making expert intervention a prudent investment.
Sonne also acknowledged the efforts of major players in enhancing transparency and security. He specifically commended Comcast’s programmatic buying platform, Beeswax, for its "tightly run" operations. This suggests a growing industry-wide recognition of the ad fraud problem and concerted efforts to mitigate it.
The Bottom Line: Real Ads to Real Humans
Ultimately, Sonne’s core message is that the most effective strategy for optimizing return on ad spend (ROAS) is to eliminate fraudulent activity. Ensuring that advertising budgets are directed towards genuine human consumers, rather than bots or deceptive schemes, is the most fundamental and impactful form of optimization.
"The best way to increase your return on ad spend is to cut out fraud," Sonne concluded. "Real ads going to real humans is the best optimization tactic."
For advertisers seeking to understand and combat the pervasive threat of ad fraud, Jeromy Sonne and Daypart offer a wealth of expertise. Interested parties can reach out through Daypart’s website at Daypart.ai, or connect with Jeromy Sonne directly on X (@JeromySonne) and LinkedIn. In an era where digital ad spend continues to climb, safeguarding these investments against fraudulent actors is not just good practice; it’s an imperative for sustainable business growth.
