Retargeter

What Marketers Can Learn from the Cautionary Tale Of Criteo Vs. SteelHouse

This article was originally published on MediaPost.

You’ve probably heard the news: France-based Criteo and rival U.S. firm SteelHouse are locked in an ugly legal dispute, and the allegations on both sides are pretty serious. Criteo claims SteelHouse is trying to ”trick e-tailers into attributing sales to SteelHouse that should have been attributed to Criteo.”

SteelHouse has filed counterclaims accusing Criteo of false advertising and unfair competition. But why should brands care about lawsuits between rival ad-tech firms?

Advertisers who refuse to pay attention to the industry-wide vulnerabilities exposed by these allegations will remain ignorant of the steps they need to be taking to protect themselves. The unsophisticated approach many marketers take toward attribution has created a climate where this type of fraud can occur.

The Vulnerabilities Exposed

If you’re spending advertising dollars and using the free version of Google Analytics to track results, you’re long overdue for a reality check. Focusing on last-click attribution and using UTM tags instead of impression and click trackers allows malicious players in ad tech to operate.

The tactics Criteo says SteelHouse uses — falsifying the UTM source of site visitors so the company could take credit for conversions it did not drive — are overtly fraudulent. But with so many brands using the free version of Google Analytics, many advertisers are completely unable to detect obvious fraud.

The Implications for Marketers

Some advertisers might argue, ”Why should I care which of my vendors is taking credit for my sales? The important thing is that sales are being made in the first place.”

That reasoning is dangerous, especially for eommerce marketers, who operate on tight margins and are particularly sensitive to cost per acquisition for first-time purchasers. Even a modest drop in key metrics, especially in sales,­ can devastate a business, and that’s exactly the outcome companies face when they fall prey to the type of fraud being alleged in this case.

Ecommerce brands typically run tests across multiple ad partners before choosing a major partner. When a bad actor uses fraudulent tactics that go undetected, it’s likely to claim credit for the majority of conversions and land the bulk of a client’s business moving forward.

After the budget shifts to the predatory player, the quality of the campaign results will drop. There might be remnants of the other ad partners’ campaigns that cause the decline to appear as a slide rather than a plummet, but the end result is the same. Conversions decline. Average order values decline. Sales decline. The brand starts paying more for customers.

When declines become evident but no root cause is obvious, companies might initially blame channels like social media or PR, rather than their ad partners, compounding the problem by launching site-wide discounts and aggressive email campaigns. Bad ad decisions linked to improper attribution risk devaluing a brand — and worse, irritating its customers. Relatively quickly, a company can find itself in a dire financial position with no clear reason.

How Marketers Can Protect Themselves

Marketers can use tools that provide click and impression trackers in place of UTM tracking that capture the full picture of user behavior when ads are displayed. They are not limited to merely tracking the behavior of individuals who click on ads and visit Web sites — and, as a result, are infinitely more difficult to game.

Marketers need to start evaluating their performance advertising partners with the same skepticism they have traditionally used to evaluate their affiliate network partners. The onus is on marketers to step up their technical skills and be skeptical before putting a piece of partner-supplied JavaScript on their Web sites.

It’s important to drill down into campaign data to see how your customers are really being acquired.

If you’re not protecting yourself against fraudulent vendor attribution tactics, then you’re willfully opening your brand up to deception and all of the bad campaign optimization decisions that will follow. Safeguard yourself. If you don’t, the consequences can be dire.