Brands say digital ad fraud has become its own industry

Trust in programmatic digital advertising is now at an all-time low, thanks to a series of scandals in the past year which have plagued the space. Brand safety concerns, trumped up viewership metrics and numerous issues around transparency have led some to dub digital advertising fraud “an industry in its own right.”

Forty-one percent of brands admitted to having “lost trust” in programmatic ad exchanges, in a recent report from UK-based marketing agency QueryClick, due to things like bot-driven traffic, inappropriate content and questions around digital advertising performance versus costs.

Ad fraud has become an expensive problem for publishers, too. A Google study this week has found that publishers are losing as much as $3.5 million dollars per day to domain spoofing for high CPM video ads.

The Google study tracked counterfeit inventory by comparing inventory and platforms that the publishers reported using with where those publishers’ inventory was actually found for sale. That study looked at Google’s own ad platform, as well as platforms from Amobee and Quantcast, selling inventory for 26 Web domains, with publishers ranging from Business Insider, Turner, LA Times, Mail Online, Meredith, New York Times, USA Today and the Washington Post, among others.

The study found the ad fraud was spread out across the ecosystem: while publishers reported selling inventory across 12 exchanges with 28 accounts to sell display advertising, and 2 exchanges with 6 accounts to sell video advertising. The DSPs, on the other hand, found their inventory available across 22 exchanges and 129 accounts for display ads, and 26 exchanges across over 1,000 accounts for video ads, on average.

Earlier this year, IAB Tech Lab released a first generation solution to this type of growing ad fraud problem: the ads.txt program, in which publishers can upload a text document listing all the authorized sellers of their inventory. Brands can then verify they are purchasing real inventory from a legitimate and authorized seller.

“The scale of counterfeit inventory shown by this study should be a wake-up call to every player in the advertising industry to adopt ads.txt,” Google said. Google has been an early and vocal supporter of IAB’s ads.txt, and began blocking unauthorized inventory purchases earlier this year. The company has also begun offering refunds to advertisers who spot suspicious activity in their advertising campaigns.

Both studies pointed to the same conclusion: brands need to demand more accountability from digital advertising, and publishers need to deliver. And while these issues can potentially impact, the industry has, to date, struggled to unite behind a common solution.

IAB launched ads.txt in May, and half a year later, adoption is still gaining momentum. According to publishers, the ads.txt solution is fairly easy to upload. The hardest part for publishers is making sure they don’t accidentally leave off any authorized sellers. Google and Facebook – the duopoly of digital advertising – support the initiative, as do media outlets such as New York Times, Washington Post, Vox Media, CBS and ESPN.

But as of August, only 34 of the top 500 Websites have begun using ads.txt. And while the participating publishers drive significant digital advertising, there are some notable laggards.
The idea is that brands will stop buying from exchanges and platforms that aren’t authorized dealers of inventory. But without widespread adoption of ads.txt by the publishers themselves, the program is limited in its scope. IAB hopes that brands will begin boycotting publishers who haven’t uploaded their ads.txt files, but that won’t happen until the scales have tipped more towards universal adoption of the program.

Despite the widespread distrust of programmatic advertising, 70% of brands in the QueryClick report said they plan to increase their programmatic ad spend. “With the audiences they want increasingly found online and the big agencies snapping up much of the premium ad space, buyers feel they have little choice but to continue,” the report stated.

According to the report, 85% of brands want to see trade bodies like the IAB able to enforce ad fraud rules and regulations, and even penalize players who don’t comply.

“Publishers are on the front line in the battle against advertising fraud,” said Chris Liversidge, managing director of QueryClick. “They have a duty to educate both brands and agencies on programmatic processes to ensure transparency.”

There’s a third component to the ad fraud crisis: a problem of growing impropriety between agencies and the programmatic ad platforms. Increasingly, agencies are buying up these platforms to better serve their clients. The downside, according to Liversidge, is that there’s little incentive for these agencies to be 100% transparent with their clients about ad fraud on their own platforms.

Liversidge recommends brands unbundle agency relationships from the programmatic platforms, “to enable them to seek out independent providers that offer true transparency and protection from the risks of current programmatic campaigns,” he said. “In doing so they will not only significantly reduce their exposure to waste and damage to their band reputation from fraud, but also start to see programmatic begin to deliver on its promise.”