Cost Per Human Click (CPHC): The New Metric in Town
In a recent cartoon by our favourite Marketoonist Tom Fishburne, two robots are sitting at opposing desks, clicking on ads on their screens. One of the robots says that since he has already clicked on 37.2% of their ads, he must really like this site. Hilarious? Not so much if you were an advertiser.
Ad fraud is a serious problem in the advertising industry. Various studies reveal that fewer than half of all impressions are actually seen by humans and $6.3 billion of ad spend a year is wasted on fake traffic, or clicks that appear to be views but are actually the work of software. The constant threat looms of bad actors using robotic or other means to create false non-human traffic (NHT).
Curious to learn more? Check our selection of highlights on ad fraud and why it is detrimental to ad budgets:
- Actual human or fraud? If a consumer watches our full video, we know they have chosen to share a moment with us. The challenge? There’s no way to know if any of those interactions are performed by actual humans. There is ample opportunity for fraud in the digital advertising market. Bots were created to mimic human clicks. Why? Because if a publisher can boast high traffic and click rates on their websites, they can justify charging premiums for advertising. And they can earn more revenue from advertisers who pay on a CPC-basis.
- Bots are designed to perform better than humans. According to Augustine Fou from FouAnalytics, bots are programmed to click on ads at a higher rate than humans do. So fake sites and apps always appear to “perform better” than real sites with real humans, who click on ads just a little, not a lot. Fou adds that if you are allowing algorithms to optimize your campaigns, they are faithfully sending more money to the bad guys. Whatever you are optimizing on, the bad guys will cheat and do more of that — for example, you are optimizing for viewability; bad guys tamper with the viewability measurement so their fake sites and apps always have higher viewability than real sites and apps. So you send them more money.
- Fake traffic has become a commodity. According to this article, there is malware for generating fake traffic and brokers who sell it. Some companies pay for it intentionally, some accidentally, and some prefer not to ask where their traffic comes from. It’s given rise to an industry of countermeasures, which inspire counter-countermeasures. The article investigates several low-end traffic sellers and tries to determine what percentage of their traffic is human. Not much, it turns out. Often between 70% and 90% of the “viewers” on low end sites were bots.
- The issue is more complex with video. As demand for video inventory grows, smaller, auto-play video ads begin to emerge. But these ads, because no user action is required to initiate play, are easily manipulated by bots. Often advertisers will find, digging deep into analytics reports, that interactions occurred on ads that were never even in view, yet boasting incredible completion rates. Bots can do that; humans can’t.
- From CPC to CPHC. No question, it’s time to change our digital currency. According to this analysis on the subject, we need to shift from CPC to CPHC – Cost Per Human Click. That is, we need to pay only for the impressions that are actually seen by human eyes. According to Augustine Fou, 55-63% of the clicks in the research he made were from bots. If you didn’t know these were bots, and you were just counting the clicks or click through rates, you would think these campaigns are performing really well. In fact, you may even allocate more budget to these paid channels because you THINK it is working so well. This is why you need the details to check whether it was a bot or human that clicked.
What can you do to make sure you are not subject to ad fraud? Novelty Media, via SmartAdd, has developed a mobile media technology framework offering video and static content delivery to mobile subscribers. Thus, 100% of our impressions are delivered to real human beings and constitute verifiable views. Endorsed by the Mobile Operators themselves, our media channel delivers your brand content only to actual humans – verified mobile network subscribers, – thus eliminating any chance of ad fraud. Rest assured that your ad budget is not wasted to bot interactions and keep following our Marketing Bites to discover the other exciting benefits of SmartAdd.