Here Comes the Ad Fraud—Advertisers Kiss Ad Budgets Goodbye

For advertisers who said “I do” to The Knot, the honeymoon is over. It turns out the wedding planning site made promises it couldn’t keep, entering into local and national advertising contracts with jewelers, photographers, bridal fashion brands, and others looking to sell their wedding-related products and services. The problem? Many of those ads didn’t run. Advertisers knew they weren’t seeing the results they expected; employees at The Knot knew it, too.

The problems aren’t new; in fact, they go back as far as 2016. But, they’re just coming to light now as former employees speak out and as The Knot Worldwide (TKWW) pursued an IPO (initial public offering).

Let’s walk down the aisle and look at what happened, why it happened, the relationship red flags, and why advertisers still have cold feet.

Did a Promising Courtship Lead to a Marriage Under False Pretenses?

Where do we begin? Ad fraud is at the heart of the story, and since that is our specialty and there’s plenty of it here to discuss, we’ll stick to that. But first, a short “how they met” story.

The Knot was ahead of its time, establishing an online platform in 1996 to help couples plan their dream wedding and find resources to make those dreams come true. Over the years, the company grew, buying competitors and “life milestone” companies.

A Brief Timeline

In 2000, the company went public after raising $35 million in an IPO a year earlier. Eleven years later, the parent XO Group was formed.

Soon after XO Group was acquired by two private equity firms for $1 billion in 2018, they merged with WeddingWire to form TKWW.

For a company to sell for $1 billion, it has to have generated significant revenue. Much of XO Group’s reported revenue came from local and national advertisers. And that’s where this love story gets very interesting and complicated. 

The Bloom Is Off the Advertising Rose

Whistleblowers have relayed a thorough account of XO Group’s reported romance scam. In brief, thousands of national and local advertisers locked into contracts, agreeing to pay for a certain number of ads on relevant pages of the website in exchange for quality leads for their wedding-related business. Some national retailers agreed to pay millions of dollars for premium ad space.
According to former employees, The Knot and XO Group did not live up to their own rules of engagement.

There were several issues with the site’s advertising, including:

Ad inventory issues

With thousands of advertisers wanting a piece of the wedding industry “cake” worth $70 billion, The Knot simply did not have enough ad inventory (space) on the website to fulfill the terms of their original contracts. This meant some ads were placed on irrelevant pages where the targeted audiences wouldn’t see them; worse, other ads likely weren’t placed anywhere on the site. Other contributing factors, such as website functionality and stability issues, added to their woes, with ads disappearing from the site.

Terms of endearment

When The Knot realized they had oversold and ads weren’t running per the original contract, their “solution” was to change the terms of the contract without letting the advertisers know. The Knot states that initial 12-month contracts auto-renew on a month-to-month basis, but advertisers found it almost impossible to cancel, even during the pandemic when few weddings were taking place. To top it off, ad fees increased as much as 30%.

Low-quality leads

One industry expert told Forbes that as many as 60% of the advertisers on The Knot do not get quality leads. Vendors didn’t need an expert to tell them that; the results, or lack thereof, spoke for themselves. The site functionality issues meant visitors were spending less time on the site; fewer visitors meant fewer leads, and many of the leads advertisers were getting were fraudulent.  

Jilted at the Advertising Altar

A wedding planning site and advertisers targeting engaged couples should be a match made in advertising heaven, but even the best of relationships benefit from counseling. While an ad fraud solution alone may not have been able to save them, it would have helped advertisers recognize the red flags.

Advertising Red Flags

Low impressions

Obviously, if your ads aren’t even running on the site you’ve contracted with or are not placed where your target audience will see them, you won’t get the impressions that you’re paying for and need to drive leads. Low-impression rates can also be a result of ad stacking or pixel stuffing.

Lead quality issues

Getting poor-quality leads can be worse than getting no leads at all. Not only have you wasted your ad dollars, but you’ll also waste time following up on leads that aren’t a good fit for your business. And that’s assuming the lead is an actual human who had a genuine interest in your product or service but maybe not the budget or isn’t in your geographic region. If the lead information is real but comes from a bot or a human fraud farm, you can unwittingly commit a TCPA violation, which can lead to a lawsuit and steep fines.

An Ad Fraud Solution can help

An ad fraud detection solution can help advertisers—and website owners—identify these issues.

If you’re getting impressions but few or no leads

Your ad fraud partner can look into the campaign data to determine if the low impressions resulted from ad stacking or pixel stuffing.

If you aren’t getting the impressions you were promised by the publisher, there may be other issues at play. In that case, it’s time to take your data to the publisher; there may be site issues they are not aware of, or your ad may have fallen through the cracks.

Ad Fraud Detection Creates Transparency in Partnerships

The right ad fraud partner can identify and stop fraudulent site traffic before you walk down the aisle. This partnership ensures the leads you’re getting from a specific site are legitimate. Your ad fraud partner can also find out where your best leads are coming from so you can re-direct your ad dollars to those channels that do generate good leads.

Know Your Contract

While an ad fraud partner can provide evidence your ads aren’t performing as expected, it can’t get you out of a contract. In that case, you may need an attorney. Always keep your original contract on file so it can be compared with the most recent one that the publisher has to ensure it hasn’t been altered.

Detecting Ad Fraud is in Everyone’s Best Interest

It’s in the best interests of advertisers and publishers to detect and resolve poor results, whether the ads aren’t performing as expected or the leads generated aren’t resulting in sales. However, publishers are under pressure to generate revenue, especially when they are looking to go public or meet shareholder expectations.

Sometimes a partnership can look great on paper, but it pays to listen to that little voice in your head giving you cold feet. Just as you might do a little snooping to ease your worries about a potential life partner, it’s worth looking into your campaign performance and your ad partners’ backgrounds to make sure you’re getting what you deserve.

Don’t Just Trust Us, Trust the Data

If your campaign performances aren’t ringing true, Anura’s 15-day free trial can help you identify any issues so you can take steps to improve your results. And even if things are clicking right along, a little reassurance never hurts. There may be underlying issues you aren’t aware of that can be addressed and make a good thing even better.

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