There is a key element missing from the ACCC’s scope of its investigation into online platforms – and that’s ad fraud.
The pervasiveness of ad fraud, or non-human traffic, undermines the trust brands have in the digital ecosystem as a media channel. Advertisers are seeing their marketing dollars spent on dubious sites, fake news, fraudulent traffic, and inappropriate content across the web.
While it is difficult to know exactly how much money is lost each year to digital ad fraud there are estimates that ad fraud is costing Australian advertisers $116 million per year. In the US, advertising verification firm Adloox predicts that this figure could be as high as $16.4 billion in 2017.
The problem is real and persistent, and it threatens the digital ecosystem - the very system that funds journalism, music, gaming and online information - because it undermines brands’ trust in the programmatic marketplace.
Digital publishers rely on ad revenue to fund important and compelling content - and on their technology partners to help them deliver that. Marketers need a trusted and brand-safe environment where they can engage consumers and achieve return on their advertising investment.
In order to break the cycle on ad fraud and make 2018 the year of trust and transparency, the ad tech industry must take charge, restoring trust and transparency in programmatic advertising.
Two and a half years ago, AppNexus launched an aggressive initiative to crack down on invalid traffic, low-quality inventory, domain spoofing, and unauthorised reselling. We subsequently imposed some of the industry’s most far-reaching prohibitions against hate speech and fake news. And we have committed significant resources to develop advanced detection tools and to understand (and shut down) the various business models that ad fraud vendors deploy.
Lots of companies invest in a foundational level of fraud detection. But detection assumes that fraud is a static endeavour, and ad fraud vendors have proven themselves to be highly adaptive. We need to do more than just detect; we need to delve deeply into the business models that inform fraud schemes and use that understanding to stay ahead of them.
We need to take a punitive approach. For too long, many reputable companies in the programmatic ecosystem have been willing to engage in borderline activity, or to work with partners that do the same. That has to stop.
If you’re an ad tech company, don’t work with publishers that buy large amounts of cheap and suspect traffic. If you’re a marketer, demand that your exchange or SSP provides regular updates: How many domains did it turn off in any given month? What ongoing investments is it making to shut down invalid traffic? What measures is it taking to prevent domain spoofing? If you’re a publisher, demand that DSPs buying your inventory make ads.txt enforcement the mandatory default. If your partners aren’t doing the right thing, stop working with them.
The more opaque the supply chain, the easier it is for ad fraud vendors to infect the system. If marketers can see and verify how much of their budget reaches quality publishers, and how much goes to paying technology fees, we can restore much of the trust that’s currently lacking in programmatic.
In summary, there are three key things that we can do to stamp out the scourge of ad fraud:
- 1. Ad tech companies should build their own proprietary anti-fraud solutions. If they don’t have the resources or ethics to invest in anti-fraud technology, they shouldn’t be allowed to run an ad tech platform.
- 2. With the assistance of verification vendors, every company in the value chain – including Google and AppNexus – should be sufficiently and efficiently weeding out fake traffic.
- 3. Stop working with any publisher, network, or exchange that has a non-trivial amount of fraudulent traffic.
If the industry collectively commits to these three directives, we can clean up the digital advertising value chain. By having the courage and common sense to do so, we will create a better internet, free of ad fraud, where the best content gets the most money.
By AppNexus account director, Tom Dover