Online ad fraud isn't going away, and advertisers themselves may be part of the problem

Hi and welcome to the Advertising Insider, weekly edition. I'm Lucia Moses, deputy editor. To get this in your inbox daily, click here.

This week: Ad fraud won't go away, the influencer metrics that matter, and agencies announce diversity steps.

Ad fraud's newest targets

Online ad companies are trying to stamp out a new ad fraud scheme, and its existence shows 130 million things wrong with the digital ad industry. Well, maybe I exaggerate. But that's the amount that Hydra, as it's called, is estimated to be costing advertisers.

In a nutshell, Hydra creates fake app traffic, defrauding marketers whose ads never get seen by actual humans. Experts agree it's more sophisticated than past ad fraud operations because the impressions are being sold through many networks, which makes it easy to escape detection.

The online ad industry never seems to be rid of fraud. A few reasons experts tell me this is the case:

• It's where the money is ($333 billion, to be exact). As much as ad companies throw resources at the problem, fraudsters keep one-upping them.
• The total amounts of fraud operations sound impressive, but its impact on individual advertisers is easier to ignore.
• It's hard to get online ad companies to do the coordination needed to take down fraudsters. While other industries like banking have established threat-sharing systems, online ad companies aren't crazy about revealing vulnerabilities to competitors.
• It's not in marketers' interest to focus on it. Considering the average CMO tenure is getting shorter, they have bigger, more visible fish to fry. Other than Uber suing its agency in 2017 for allegedly running fraudulent ads, when was the last time you heard of a marketer taking action on fraud?

Read more: Inside Google and others' struggle to stop an advertising-fraud scheme that's skimming $130 million from the industry

The metrics that matter in influencer marketing

With the pandemic cutting into ad spending, brands that are still spending want to know they're getting results, and influencer marketing campaigns are no exception. With all the attention on fake followers, brands are paying less attention to the number of followers, and holding influencers to higher scrutiny, Amanda Perelli and Sydney Bradley report.

In other words, goodbye reach, hello "super likes."

Read more: The Instagram metrics that brands are using in 2020 to decide whether to hire an influencer and to measure campaign performance

Ad agencies announce diversity steps

Protests against racism and police brutality have Corporate America examining their past diversity efforts and asking why they've fallen short. Advertising agencies, which determine so much about how people see the world, have a particularly bad record. In 2006, the top five holding companies had to be dragged into committing to change after the New York City Commission on Human Rights called out their poor history in minority hiring.

Now, changes are afoot.

Omnicom committed to expanding its employee-resource group, its diversity and inclusion leadership team and work with a larger number of related nonprofits, and requiring unconscious-bias training for all employees. Havas said it would track its diversity numbers each quarter and publicize them annually, diversify its internship program, rethink its recruiting processes, and require executive training, among other steps.

It's just the beginning, but as one industry critic said of Havas, it's an "incredible start."

Read further:

• Ad giant Omnicom releases diversity numbers showing 5.5% of US staff is Black — read the internal memo outlining CEO's 8-step action plan
• Fewer than 3% of US executives at ad giant Havas are Black. Read the deck outlining its ambitious plan to increase diversity.

Other stories you should check out in media, advertising, and beyond:

• VCs pick 6 hot media startups to watch this year that are focused on YouTube, Instagram, and TikTok creators
• Current and former staff at gaming giant Ubisoft make new allegations of sexual harassment and HR failures, warning senior staff exits won't alter 'deep-rooted, toxic' culture
• 9 YouTube creators break down their exact monthly incomes from the platform — from under $600 to over $140,000
• Amazon wants to put a waist-high robot in your home. The secretive project's facing high staff turnover, doubts over a $1,000 price tag, and visits from Jeff Bezos.
• McDonalds is permanently closing 200 locations across the US as it reports lowest quarterly profits in 13 years
• How the Hamptons got even bougier in summer 2020

Thanks for reading, and see you next week!

— Lucia