Google, Facebook, and Amazon spend millions of dollars promoting digital advertising. Here’s the fact: Digital Advertising is a fraud. Research shows that 60% of digital advertising is fraudulent. It could be bots, view-ability, or Chinese click farms. It doesn’t matter what kind of fraud – what matters is how widespread and endemic it is.
Fraud is part of the digital advertising DNA. It is NOT a mistake. It is part of the business plan.
Richard Corriere wrote, “Google and Facebook control 90% of digital advertising. 60% of digital advertising is fraud (Is Ad Fraud Inevitable? George Simpson. “Agencies and brands simply write off fraud as the cost of doing business online.”
Ad agencies make money on digital advertising fraud and they have convinced their clients that fraud is just a part of doing business. Local businesses can’t afford the fraud. But let’s get to the con game that is behind the fraud. So today’s research fact reveals after the fraud comes the CLICK. Overall consumers click .09%.
Richard Corriere created an interesting digital advertising algorithm:
Pay to reach 1,000 shoppers online
60% fraud = reach 400 shoppers
REACH – .36 shoppers after spending to reach 1,000
Businesses buy digital advertising based on cost per thousand or CPM. This means that a business is paying $45 for a single click. Keep in mind, a click does not mean a customer. It just means that a consumer, hopefully not a bot or click farm, has clicked on your digital ad.
When you think about the level of fraud and con game associated with digital advertising it is no wonder the EU is fining these tech giants billions of dollars and as the New York Times story on Facebook fine reports, Facebook is being fined $5 billion.
The New York Time story goes on, “For Facebook, a $5 billion fine would amount to a fraction of its $56 billion in annual revenue. Any resolution would also alleviate some of the regulatory pressure that has been intensifying against the company over the past two and a half years.
“This would be a joke of a fine — a two-weeks-of-revenue, parking-ticket-level penalty for destroying democracy,” said Matt Stoller, a fellow at the Open Markets Institute, a think tank that is a vocal critic of the power of tech companies.”
Here’s the real story – Google, Facebook, and Amazon DO NOT CARE about fines because they are making so much money promoting the fraud and associated con game. Drug cartels EXPECT to lose shipments of drugs worth millions of dollars and they consider the losses as a “cost of business.”
It is just unsuspecting local businesses who can afford fraudulent digital ads as “cost of doing business.” Take heart. Local businesses are starting to wake up to exciting new alternatives.