Anchor Intelligence CEO Miller Sees More Fraud Occurring In Clicks Than Impressions

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Anchor IntelligenceKen Miller is CEO of Anchor Intelligence, a traffic quality solutions provider.

AdExchanger.com: You have an impressive list of client testimonials on your site. Can you discuss recent momentum at Anchor Intelligence? Any impact from the economy?

KM: In the past two quarters, we’ve seen the number of inbound inquiries into Anchor Intelligence increase by more than 400%. Market conditions are forcing advertisers to scrutinize spend more than ever before; as a result, they are no longer willing to accept traffic that doesn’t convert, or comes from undocumented, questionable sources. Secondly, the growth of ad syndication and exchanges has led to a strong demand for transparency and accountability. Ad sellers who can’t identify where their best and worst traffic quality is coming from are being squeezed out as advertisers are going elsewhere. As a result, many ad networks and search companies are turning to Anchor Intelligence to proactively manage and optimize their traffic quality.

Regarding customer wins, we recently announced our partnership with Ask.com, through which ClearMark scores every ad click across the globe for Ask.com and its partners. The public commitment by a top 4 ad provider to deliver the highest-quality traffic to its advertisers represents a major victory for advertisers.

A great advantage of our solution is that satisfied customers benefit further from having their partners and affiliates also use ClearMark. As a result, we have a several additional partner announcements coming up very soon.

What are the challenges that ad networks and agencies face regarding ad event quality?

One of the most pressing challenges regarding ad event quality is that many ad networks and agencies are completely caught off guard when victimized by malicious actors. Whether it’s the result of placement violations, malicious ad code, or outright publisher fraud, a single misstep can lead to a major ad partner going elsewhere to spend its money.

Today, there are literally hundreds of thousands of shell sites that exist for the sole purpose of exploiting online ad spend. It’s very common for an ad network, agency, or advertiser to have some of its inventory served on these shell sites via another ad network, an ad exchange, or through syndication. When this happens, an advertiser may see its click through rates spike, without a corresponding increase in conversions. As a result, the advertiser may discontinue its spend out of fear of brand erosion or fraud.

For ad sellers, it’s difficult to stay on top of the ongoing threats to traffic quality. Without the ability to differentiate between a malicious event and an irregular ad campaign, ad sellers are pressured to throw out some of the good traffic to avoid charging for any of the bad.

You have said that your Anchor ClearMark system provides a metric similar to a FICO credit score for each ad event. What are the data attributes of your FICO score? Any weightings that deliver the final score?

Anchor Intelligence believes that there is more value to be assigned to an ad event beyond binary conversion measurements. Since conversion rates on ad clicks are so low, there is a ton of traffic that may not have associated conversions but should obviously not be treated equally across the board.

ClearMark scores each ad event on a continuous scale that ranges from 0.00 to 1.00, with the lower end representing invalid traffic and the higher end representing high quality traffic. The scoring algorithm uses a myriad of different data including reputational attributes at the audience, site, referrer, and network level. It also leverages historical observations such as conversions, engagement, and malicious activity such as outbound spam to create behavioral profiles. You can imagine that an ad network, even in the absence of a reliable conversion-tracking program, can leverage ClearMark to differentiate the traffic it sends to its advertisers or make optimization decisions.

How would an ad network, for example, install the ClearMark system? Is the fraud protection system hosted by Anchor or the client ad network?

The ClearMark system is software as a service that uses click logs, similar to the way that traditional web analytics work. Clearmark receives click logs in a number of ways, ranging from a lightweight javascript or pixel implementation to more customized backend integration. The majority of our customers have deployed the ClearMark system via backend integration to facilitate integration with their billing and reporting systems.

What is the revenue model for Anchor Intelligence?

Anchor’s revenue model is based on the volume of ad events scored. As a result, our business grows with that of our customers.

In that click quality data enables optimization, is Anchor Intelligence prepared to integrate into real-time bidding (RTB) systems?

We have invited a few companies to test a beta integration with their RTB systems to measure lift. Our beta partners fully recognize the value of inputting traffic scoring results into their real-time bidding platform. Furthermore, we’ve launched a beta with several advertisers using a similar bidding framework that dynamically optimizes keyword spend. So far, we’ve seen very positive results!

On average, what percentage of clicks are fraudulent? And, what is the actual cost savings in percentage terms that Anchor Intelligence's technology provides versus no implementation?

Anchor Intelligence categorizes traffic into valid and invalid. While invalid traffic includes attempted click fraud, it also includes other invalid clicks such as double-clicks and robotic traffic. The percentage of invalid traffic varies tremendously across numerous dimensions (such as platform, geography, and ad type). Invalid rates range as low as the single digits to as high as the high thirties. Because the range varies tremendously, we have not seen value in publishing a single industry-wide number.

What’s more compelling is the improvement in traffic quality that customers experience from using the ClearMark scoring system. We’ve consistently seen invalid traffic rates drop by half while volumes have increased within just a few months of deploying ClearMark.

Keep in mind that click fraud is just a single dimension of traffic quality, albeit one that has gotten a lot of attention in recent years. Early on, Anchor recognized that optimization of the entire spectrum of traffic quality would result in better returns for advertisers rather than just focusing on generating refunds. This comprehensive view of traffic quality has served our business extremely well.

Is there more fraud in clicks or impressions? Where do you see the fraud occurring in the future?

There is definitely more fraud occurring in clicks than in impressions. Fraudsters are far more likely to profit through CPC fraud than through CPM/display fraud, especially given the frequency caps set by the majority of ad networks. That said, we’re seeing an increasing amount of fraudulent activity occurring in richer ad formats such as rich media and full page ads since, again, the payout for these types of products makes them attractive targets.

How is reporting provided to the client beyond the FICO? Does reporting offer insight into fraud patterns in geography, behavior or context? Is there any post campaign qualitative analysis?

Customers receive scores per ad event in real time from ClearMark. Using this data, customers can make optimization decisions based on traffic quality. In addition, customers have access to the ClearMark Reports, a dynamic online reporting tool that shows aggregations of the score results by multiple dimensions such as geography, referrer, time period, and even down to the IP.

Using ClearMark Reports, customers can surgically manage their traffic, as opposed to making broad-stroke decisions. We also provide an API to enable our customers to access our reports in an automated fashion and integrate them with their existing dashboards.

How do ad exchanges fare through your system? Can you identify for us any recent fraud patterns through the exchange model? Particular vertical silos whether on the advertiser or publisher side?

Ad exchanges create interesting challenges for ad buyers and sellers. Clearly there are substantial benefits gained from using an efficient ad marketplace. However, because of the multiple redirects that may occur in the fulfillment of an ad on an exchange, there are many opportunities in which traffic quality can be compromised. Referrers are often masked, traffic sources are frequently turned on and off, and affiliates rotate their traffic through multiple IDs. As a result, tracking the root cause for traffic quality issues without a third party solution becomes challenging.

Fortunately, Anchor Intelligence is scoring traffic for many customers who buy and sell on exchanges as well as the exchanges themselves. As a result, we’re finding that quality as a whole is improving as buyers are proactively managing their traffic sources.

Follow Anchor Intelligence (@AnchorIntel) and AdExchanger.com (@adexchanger) on Twitter.

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