As part of research I’m doing both for the book and for my upcoming conference (the CM Summit, more on that soon), I’ve been in pretty extensive conversations lately with dozens of key players in the advertising technology industry. I find the ecosystem that has developed to be fascinating, complex, and ripe with opportunity (and deeply important to the future of our society, not just marketing). I’ll be writing about it quite a bit in coming months. But before I do, I wanted to call out a growing issue that our industry will have to tackle sooner rather than later.
Just as in the early, wild west days of search (1999-2004), the programmatic advertising business – a multi-billion dollar marketplace growing faster than search, video, or anything else for that matter – is riddled with fraud.
That’s what many very reputable sources have told me in great length over the past few months. It’s something of an open secret, and more and more people are speaking out against it. Here’s Federated Media’s Walter Knapp on the problem, back in March of last year:
The great thing about the Internet is that it is built on the foundation of openness — from the way the domain system works to the way content and publishing are increasingly democratic. The core technologies embrace openness, sharing, linking and the ability to consume content across devices and across wired or wireless connections. Unfortunately, the openness we depend on in the digital media business is also available to people who can (and will) take advantage of this openness and exploit it for their own selfish wants.
Knapp notes two forms of fraud – ad injectors, fraudulent browser plugins that take over ad calls; and the practice of inserting an entire site into a 1×1 pixel hidden on high traffic but low quality sites featuring porn or music lyrics. Both are examples I’ve heard about over and over in my reporting. A third involves “stacking” ads one behind the other, all playing video to completion, often playing in inactive tabs. A fourth features refreshing ad calls on accelerated schedules or in inactive tabs. Yet another involves running as many ads as possible out of view, simply to gain “view through attribution” on a closed loop success metric.
More people are starting to call these practices out. AppNexus CEO Brian O’Kelly prominently featured the issue of fraud in his blog post celebrating his company’s recent $75 million funding, and what he intends to use it for:
Quality We will continue to invest in cleaning up the advertising marketplace. We’re proud of our anti-piracy stance, and our 5x volume growth this year indicates that you don’t need to serve on BitTorrent sites to be an ad platform company. We are investing heavily in fighting fraud, porn, malvertising, and malicious toolbars, and we are actively working on viewability tools.
Programmatic industry watcher AdExchanger puts it this way:
AppNexus’s pledge to invest money in ad quality issues is worth calling out. The issue is becoming more pervasive as companies emerge to exploit the vulnerabilities of real-time traded inventory to data and impression fraud, malvertising, and other nefarious practices. Fraudulent activities aside, the emergence of robust ad verification and viewability tools means display ad marketplaces and buying platforms must keep a clean nose.
It’s true that many folks are working on addressing the issue, including the IAB. But the bad actors are currently far ahead of the good guys, and worse, many in our industry are turning a blind eye, hoping the problem goes away in time, without too much publicity. Why? Well, nearly everyone gets paid from fraud – the publishers, the exchanges, the data providers, and the agencies. Even the marketers,who are footing the bill, feel like they are getting value – because the success metrics they’ve set up are being met.
But fraud hurts the ecosystem in a massive way. It means that low quality, invisible, or purely fraudulent inventory is holding down the average value of the entire marketplace – hurting high quality, engaged publishers in the process, stunting investment in quality content.
Over and over, I hear that the reason CPMs (the amount of money a marketer is willing to pay for one thousand advertising impresssions) are so low is because “there’s infinite inventory.”
Hogwash. There’s only so much time in the day, and only so many pages where actual human beings are really paying attention, and the web (including mobile) is growing at a finite pace. There are even fewer places where marketers can be assured of quality, engagement, and appropriate context. It’s time we focus on identifying them, and ridding ourselves of the true source of “infinite inventory” – fraud.