Ad fraud is a topic that cannot be ignored.

At Econsultancy conferences, any discussion of programmatic media comes with the obligatory debate about building transparency into an ecosystem where the advertiser so often lacks control.

I thought I'd write a short post simply stating the scale of the problem with three facts.

1. Facebook has washed it hands of the problem

The DSP part of Facebook Atlas was unceremoniously dumped earlier this month by its creator, Facebook. It only came into being in October 2015.

As usual, the Ad Contrarian (Bob Hoffman) most pithily got to the crux of why this is disturbing.

Essentially, Facebook, in its own words, was "amazed by the volume of valueless inventory" it saw across ad exchanges.

Banner ads and ad exchange technology more broadly were cited by Facebook as responsible for the majority of waste.

Indeed, Facebook had to turn off 75% of inventory going through Liverail (its video ad solution) just in order to bring some semblance of quality to the ad space on offer.

Away from bad quality exchange inventory, those two products Facebook is known for, native (or in-stream) and video ads were nevertheless cited as high value. Facebook Atlas has now switched its focus to its video ad products, greater contextualisation of ads and its new 'path to conversion' product, which is responsible for tracking users (and ad success) across devices.

facebook atlas

2. Ad tech companies are appointing Heads of Inventory Quality

I read a press release this month from engage:DBR announcing it had appointed a VP of Inventory Quality.

This is an admirable piece of PR at the right time. DSPs are keen to promote an image of themselves as conscientious and standing apart from purveyors of unviewable (through cookie-stuffing) and low quality impressions.

Of course, these appointments/press releases show quite clearly there's a big challenge (and companies offering solutions know where there's a challenge, there's also opportunity).

It's not just the DSP that needs to learn to say no, though. Publishers and agencies have to learn, too.

As ever, to use my favourite analogy, it's a game of hawks and doves. How do all parties move collectively to a more transparent solution without regulation that has real bite? Perhaps education is the key.

A matter of Hawks and Doves.

hawks and doves

3. Ad fraud cost an estimated $7bn in 2015

An ANA report in early 2016 estimates around $7bn will be lost to ad fraud in 2016. This dwarfs the c.$800m of wasted spend that ad blocking currently accounts for annually (according to the IAB).

This analysis of over 10bn ad impressions from 1,300 campaigns shows just how far the industry has to go before worthless impressions are weeded out.

Let's leave the last word to the Ad Contrarian:

Can you imagine the outcry if it was found that gas pumps were showing 20 gallons pumped when they were only pumping 10 gallons?

Can you imagine the riots that would occur if it was found that banks were embezzling half the money from their depositors?

That is exactly what is going on in the world of display advertising. Half of what is being paid for is apparently being stolen. And of that which is not being stolen, an unknown amount is apparently worthless. And nobody seems to give a damn.

Nobody's been fired. Nobody's been sued. Nobody's gone to jail. 

Ben Davis

Published 23 March, 2016 by Ben Davis @ Econsultancy

Ben Davis is Deputy Editor at Econsultancy. He lives in Manchester, England. You can contact him at ben.davis@econsultancy.com, follow at @herrhuld or connect via LinkedIn.

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Comments (2)

Marc Dhalluin

Marc Dhalluin, Founder / Director at ideaz2b (www.dhalluin.co.uk)

Yet is is being ignored. The reputational damage done to the industry, the inventory holders, their sales arms / affiliates grows.

Why the blind eye? Greed? Because brands are convinced they're better off having 'something', even if they're not really sure what that something is? What has the ad fraud findings done to strategy, planning, buying and pricing? Is it anticipated that ad blocking will have any affect on pricing?

As long as there are brands desperate enough to bid for 'part of which works but we're not really sure which part', there will be no motivation for practitioners to resolve the issue. Unless of course they are purpose driven, and wonder why they get out of bed in the morning.

And until we see more brand leaders collectively putting pressure on their teams to report on media effectiveness nett of anticipated 'fraud' or 'void' purchases.

over 1 year ago

Luis Pires

Luis Pires, Director of eCommerce and eMarketing at Bosch - Siemens Home Appliances LLC

Marc, you are on to something here. From my days as a brand manager, I used to be rewarded by 'doing something', even if it had to potential return attached to it. On my part, I was incentivized to spend my budget to the last cent as, if not, next year I'd be awarded less money.

over 1 year ago

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