The ad fraud battle – can the systematic problem be solved?

Sarah Homewood
By Sarah Homewood | 18 September 2015

There are conflicting views around how large of a problem ad fraud currently is in the marketplace. Some say it is a big issue, while others say that the problem is almost solved.

A Digiday story recently quoted from AppNexus's chief data scientist Catherine Williams who was speaking ExchangeWire’s ATS London event this week, in her presentation she said filters deployed earlier this year by AppNexus flagged 65% of its inventory as fraudulent.

This is no small number by any stretch of the imagination, however closer, to home AppNexus VP of sales of, Asia-Pacific, Dave Osborn, told AdNews that these numbers are global and they aren't broken down by region, but more importantly it's crucial the market understand what they actually mean.

Osborn said that Australia, due to its size and the fact that clients and agencies are generally doing business with people they know, is generally a more premium marketplace, but globally despite the falling number of impressions CPMs are up over 100%.

“Globally, we’re transacting fewer impressions year-over-year, but platform spend has remained even, resulting in much higher average CPMs up 175%, view-through rates 75% and post-click conversions up 130%. It means that our clients, buyers and sellers alike, are winning,” he said.

When asked if the 65% figure would be startling for clients Osborn said: “Invalid traffic and inventory are systemic challenges for the entire ecosystem. When we see results like CPMs up 175%, view-through rates up 75% and post-click conversions up 130%, we think we’ve solved a systemic problem. It’s good for all of our clients, buyers and sellers alike.”

Timothy Whitfield ‎director, technical operations at GroupM told AdNews that while he doesn't have exact numbers of what ad fraud looks like in Australia, he preliminary overview show it's sitting in the single digit mark.

When it comes to what is important for clients Whitfield said: “Firstly to ensure that their brands are safe (no illegal download or adult sites). Secondly, they need to (continuously) minimise wastage.

“This concept of “wastage” comes in all forms. Brand safety, ad-fraud and viewability. However, it also comes in the forms of hitting the wrong demographic, retargeting poorly etc.

“Therefore the concept of ad fraud is only one part of wastage that we need to focus on. The job of Ad-Tech is to continuously evolve and continuously minimise wastage and maximise results.

He also noted that these high fraud numbers globally won't make clients not want to get involved in programmatic rather it will have the opposite effect.

“There has never been a more important time to double down on tech. The problem isn’t that wastage suddenly occurred. The problem is that our awareness is just starting to dawn on the many facets of the problem,” Whitfield said.

“Think about viewability; We still can’t measure viewability on mobile (yet). Does that mean that clients shouldn’t use mobile as media. Absolutely not. Of the four A's (awareness, acknowledgement, action, application) we are only on the first A: awareness.

“We are aware that wastage exists in digital as well as TV, radio, press etc, but now the job is to use Education to move from awareness to acknowledgement.”

Osborn explained that AppNexus has undertaken an “aggressive” Inventory Quality (IQ) initiative, which is a combination of tough policies such as domain transparency; pre-bid policy enforcement, aimed at fostering maximum transparency and combatting invalid traffic and inventory on the AppNexus platform, and while this has seen the number of impressions they serve decrease dramatically spend remains the same.

“Technically, we first rolled out IQ as a comprehensive idea at our June Summit in London. In reality, we’ve been focusing on these issues for a much longer time,” Osborn said. “As a result of this initiative, the number of impressions that we transact daily is roughly 65% less year-over-year, but our platform spend remains even.”

“In effect, we have evolved into a globally premium marketplace. In Australia specifically, which is known for its significant consolidation of spend amongst a handful of buyers and a handful or two of sellers, and where we work with the most significant of those companies, we've seen that premium marketplace growing for some time.”

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