What is shaving in traffic arbitrage?

shaving in traffic arbitrage

What is shaving in traffic arbitrage?

Shaving in the context of traffic arbitrage is one of the practices that can take place in the network of advertisers and agencies. The term refers to a process where an agency or intermediary “reduces” (or “cuts off”) the amount of traffic they have actually bought for an advertiser. This can happen for various reasons and has different consequences for all parties involved in the process.

Causes of shaving

The main reasons for shaving include:

Monetization: Some agencies or online intermediaries may underreport traffic in order to keep a portion of the advertising funds for themselves. This is a form of fraud and can negatively impact trust between the parties.

Technical problems: Sometimes shaving can occur as a result of technical problems or measurement errors that are made intentionally or unintentionally.

Resource optimization: Some companies may use shaping to optimize resource utilization and divide traffic between different advertisers or campaigns.

Consequences of shaving

Sharing can have different consequences for the participants of the traffic arbitrage market:

For advertisers: A decrease in the amount of traffic without their knowledge can lead to an underestimation of the effectiveness of an advertising campaign and loss of funds.

For agencies and intermediaries: The use of shaving can lead to a loss of trust and clients, and may also lead to legal consequences.

Protecting yourself from shaving

Advertisers and agencies can take the following measures to protect themselves from shaving:

Contractual terms: Clearly state in contracts the rules for traffic measurement and mechanisms for protecting against shaving.

Traffic monitoring: Continuously monitor and analyze traffic for anomalies.

Use of independent analytics systems: Use independent systems to measure traffic that are not controlled by the agency or intermediary.

Conclusion.

Sharing in traffic arbitrage is a complex issue that affects the effectiveness of advertising campaigns and trust between the parties. Understanding this concept and taking appropriate measures to protect yourself can help avoid negative consequences for your business.