Don’t take candy from strangers IAB US CEO warns

Sarah Homewood
By Sarah Homewood | 15 September 2015
Randall Rothenberg speaking at the IAB's leadership summit last week.

The seed of the ad fraud problem is marketers' demands for unprecedented scale at unprecedented low cost, according to the IAB's US CEO Randall Rothenberg, who was recently in Australia to speak at the IAB's inaugural leadership summit in Sydney. The key to solving it, he reckons, could be as simple as listening to advice everyone was given as a child: 'don't take candy from strangers'.

Speaking at the same conference, James Diamond, MD for Australia and New Zealand of Integral Ad Science, says ad fraud costs the industry around $100 million a year straight out of marketers' budgets and into fraudsters' pockets.

Rothenberg told AdNews he believes that while fraud will never be completely stamped out - much like financial fraud in the banking industry - knowing who you’re doing business with and taking that simple piece of advice could go a long way to cutting down the problem.

“If you boil everything in the digital advertising fraud arena down to its essence, there are two things that are paramount that really you're going to need to impress upon yourself. One of them is just because we're undergoing a digital revolution doesn't mean standard good business practices have been repealed, and the second is if the deal looks too good to be true, it probably is too good to be true,” Rothenberg says.

High on the IAB's agenda is committing to 100% viewability of impressions. At the summit, he highlighted that 67% of measurable impressions are now consistently viewable, however, that means one third of impressions are still discrepant, according to Rothenberg.

Viewability has been getting lumped into the same conversation as ad fraud, but that's something Dan Robins, head of interactive at OMD Australia, thinks is a problem in itself, urging the industry to "decouple" the two.

While the IAB is attempting to combat these issues, Rothenberg argues that marketers are often at fault for the rise of non-human traffic and illegitimate participants in the supply chain.

“The fraud problem begins with marketers, brand marketers, wanting absolutely unprecedented scale beyond anything they ever needed or imagined they would need, in television or in any other medium,” he says.

Rothenberg says that marketers, when dealing in the digital realm, say things like: “Get me billions and billions and billions of impressions, and boy look at how cheap those prices are. I want them even cheaper than that. $2 CPM, $1 CPM, 50c CPM, get me millions of those cheap impressions, they’re out there, get them for me”, which he explains means no one is stopping to ask, “do I need billions of those cheap impressions, and by the way, why are they so cheap?”

It's this push from marketers that then leads them to go to their agencies to secure the impressions for the cheapest price, then agencies put the pressure on publishers to get scale or risk getting cut out of the deal, and then publishers are induced to go into the market place and the exchanges to bulk up on look-alike impressions, which is how unregulated mechanisms enter the market.

“Not enough senior executives, who ought to know better, have paused and stepped back and said: ‘What's going on here? Why are these impressions so cheap? How do we tell the difference between good inventory and bad inventory?’” Rothenberg says.

“We need to take a deep breath and step back and remember the laws of economics and best business practices have not been repealed. Number one, generally you get what you pay for, and number two, don't send money to someone you've never heard of - don't take candy from a stranger.”

He says this isn't a new issue, with the IAB in the US having looked into this for the past five years. Over the last year however, the bureau has been focusing seriously on traffic fraud and cleaning up the supply chain, partnering with the Association of National Advertisers and the American Association of Advertising Agencies to form Tag the Trustworthy Accountability Group to focus solely on combatting fraudulent traffic.

The group recently teamed up with Google to create a bot blacklist, which saw Tag use the tech giant's database to create a list of any site associated with “a non-human ad request” in order to add it to the list. While Tag is currently only operating in the US, Rothenberg explains that it is designed to roll out globally, although he has no timing for an Australian launch.

It's not all bad news in the viewability wars as Rothenberg highlights the fact that Australia is a relatively small market, meaning that it has the ability to take back control over the supply chain due to the size of the economy.

“From what I can gather, it's more of a premium marketplace, there’s more concentration and there's an historical reliance on a set of very well established media companies as well as the incumbent media companies and a set of established digital companies,” he says.

“In a marketplace where the sellers and the buyers know each other and the intermediaries know each other, it's going to be easier to detect the patterns of activity that aren’t legitimate.”

Ultimately however, it's up to those in the marketplace to hold those we work with accountable for their practices and only then will there be a difference, according to Rothenberg.

“There has to be a chain of responsibility in our industry, so that everyone not only holds themselves responsible for what's going on, but holds their suppliers responsible,” he says. “If that cascades down then you can solve the problem relatively cleanly and clearly in a smaller marketplace, kind of naturally.”

This story originally appeared in the latest issue of AdNews magazine, you can get a copy in Print or on your iPad right now.

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