Opinion: The truth behind online video fraud

Lee Stephens
By Lee Stephens | 6 May 2014
Lee Stephens.

The digital media industry gets very hot under the collar when the words ‘advertising’ and ‘fraud’ are used in the same sentence. When you add ‘online video’ to the mix the situation becomes positively explosive. Clients stop spending, agencies wail, red-faced, denying responsibility and video networks scramble to check their site lists for Russian hackers. The bluster turns into agency ‘Integrity Workshops’, statements to the media and apologies to clients. And then…everything goes back to normal.

This isn’t to say that online video fraud isn’t serious. It is the most cancerous threat to the development of quality local video content in Australia. The high yield of video advertising is the only source of revenue large enough to pay for the high cost of producing local video content.

The concern over online video veracity is a recurring problem the industry needs to fix. Indeed, if the industry wants the credibility to attract TV advertising budgets, networks and agencies have a responsibility to approach the situation maturely. And that is the tricky issue. As an industry we are sometimes more interested in exploiting the situation in a game of “my videos are better than your videos”.  

Here are the brutal facts about video fraud:

1. A ‘clean’ site list today may not be clean tomorrow
2. Agencies and networks can’t keep up with the site changes of thousands of sites and their video advertising units daily
3. Claims that site lists are checked and cleaned daily by Tibetan monks are not true
4. All video advertising units are not created equally and should not be priced the same way
5. Video advertising is spectacularly successful on many levels across most campaigns
6. There is technology to check, evaluate and block fraudulent sites in real time, however, they are rarely used

So, if the solution exists, why are these dynamic video quality technologies not used more widely in Australia? While they are new technology, they are hardly bleeding edge mystery machines. The global leaders, Integral Ad Science and DoubleVerify, have serious backing and credibility.

There are a couple of issues that Australian marketers and agencies have to get past to ensure the future health of the online video industry. The first issue is cost. These systems charge a small technology fee of up to 0.30c CPM. On an average video cost of $25.00 CPM the technology to ensure you get what you pay for is just 1.2% of the media cost. If you believe the silly claims that 15% of all advertising is fraudulent (which is rubbish), you will earn a 1250% ROI from using these technologies on behalf of your clients. Explaining this example another way, the technology reduces the effective cost of media from $25.00 to $21.25 CPM – for just $0.30 CPM. What marketing manager would disagree on these facts?

The second conundrum is what to do with the vast amounts of information these verification systems produce. They report a mountain of real time data that challenges reporting and brand impact assumptions within the market currently. How do you digest and control the information presented, and explain these findings to clients? This is by far the most important issue.

If online video is to compete with, or complement TV advertising budgets, the industry requires an approach to online video that matches the sophistication of TV buyers.  The same complexity of approach isn’t present today within online video and verification tools expose questions many in our industry are not sure how to answer.

Having said this, online video is the young, aggressive and ambitious new kid on the new media block. They may annoy us with their confidence. They make us angry by not understanding the struggle we have made to build the digital media industry. Regardless, online video is our future. Along with amazing TV and compelling content, they will drive our future media consumption. We need to embrace them or get out of Dodge.

Lee Stephens
Switch Digital

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