Beheading the Hydra: How Data Safety is Key to Stopping Online Fraud

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By Evan Rutchik, chief revenue officer, Ogury

You know pretty much anything named Hydra is not going to be good or benevolent. Starting from the name’s origins in Greek and Roman mythology, the giant water monster had nine heads, one of which was immortal. Even in modern mythology—the Marvel cinema universe—Hydra was the terrorist organization whose motto amounted to “cut one head off and two will replace it.”

It’s perfectly apt, therefore, that the latest online fraud scheme is also named Hydra—after all, online fraud is easily the most pervasive and pernicious problem plaguing the brand marketing ecosystem, popping up again and again just when the industry thinks it’s figured out how to eradicate it. Hydra is reported to be specifically responsible for stealing some $130 million in fraudulent activity, executed through the use of bot traffic across numerous fake sites and apps.

How can this type of theft and fraud be stopped? How can brands be ensured the traffic they’re paying to access consists of actual humans? All of the digital marketing continues to wrestle with these questions. And though nothing currently guarantees all online fraud can be stopped, there are some steps marketers can take to safeguard their ad expenditures from being wasted.

For marketers, the best place to start is by securing data safety. By that I mean ensuring that the data you’re leveraging wasn’t provided under duress, that in fact it is consented, trusted and traceable. When you buy ad time or space that’s negotiated off consented, trusted and traceable data, the payoff is an environment that is brand safe and of more value to the consumers who see it.

Hydra essentially commits its fraud through app-spoofing or domain spoofing, which amounts to directing traffic to fake sites and apps. This is arguably a more important and nefarious challenge to brand safety than the issue that attracted the early headlines: adjacency to controversial or inappropriate content. With app-spoofing, an app can misrepresent its name when an advertiser is bidding on it. The brand (or agency for the brand) thinks it’s running on ESPN or TripAdvisor but it’s actually running on a fraudulent app, or way worse.

This happens frequently, and the major supply-side platforms have their hands full playing a sort of whack-a-mole trying to root this out of their inventory. Currently, they only identify the problem after it occurs, allowing them to reimburse the advertiser on the lost value. But the damage has already been done.

By demanding consented, trusted and traceable data, marketers and agencies should be able to proactively block such fraudulent activity. If you can identify what apps users have on their devices, when a request comes in for an impression on an app the user doesn’t have, it can be blocked before the transaction. (We at Ogury do this for a living.)

Essential in stopping Hydra and other fraudsters is getting the help and cooperation from the ad-tech partners. Brands trust them with their marketing dollars, and they must strive harder to ensure the safety of those dollars. That said, brands and agencies have an obligation to hold their partners to higher standards. It can be tempting to look the other way if the desired results of a campaign have been achieved, but I’m optimistic when I see brands get into the fight anyway.

Agencies are also fighting with everything at their disposal, even if they have less at their disposal in the face of shrinking profit margins. It’s important that they hold their in-house data units (Publicis owns Epsilon and IPG owns Acxiom) to similarly high standards of consent, traceability and trust.

When it comes to fraud, one fundamental truth is, where the dollars flow, fraud will follow. And marketing dollars are now starting to flow into connected TV, the hottest draw for eyeballs in the brand marketing ecosystem as people continue to spend more time at home sheltering in place during the pandemic. Maybe the industry around connected TV can take proactive steps to stop fraud before it grows deep roots there. It may already be too late to stop it from starting, but let’s get ahead of the problem to stop the fraud and the waste before it can grow—like another head of the Hydra.

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