The growth of real-time bidding (RTB) and programmatic exchanges has benefited advertisers and publishers alike. Advertisers can target readers with laser precision using IP addresses, cookie profiles, and URLs (among other non-personally identifiable information), to drive brand awareness and sales. Publishers benefit from higher CPMs and fill rates, which drive revenue per visitor.
But fast growth often opens the door for bad players. In the digital publishing industry, the most obvious is the rise of traffic fraud. The cost of fraud is alarmingly high for both advertisers and publishers; $6.3 billion will be lost to fraudulent traffic in 2015. Traffic fraud also reduces the CPMs reputable publishers can charge for their inventory. This type of fraud has been well documented, and several leaders in the industry have taken major strides to fight it. However, there is still another sinister flavor of fraud that has been lurking in the darker side of the Internet and that is ad fraud.
Ad fraud occurs when a buyer on an exchange purchases and accidently or knowingly violates an exchange’s terms of service. Ad fraud, commonly referred to as bad ads, ranges from annoying to dangerous. The most common forms of ad fraud are:
- Video with auto-play audio: When a video is loaded into a display format and automatically plays audio. Muted video, while annoying, is not technically a violation of IAB policies. Even when exchanges take precautions to block audio in certain types of video advertisements, smart buyers know how to game the system and turn the audio on.
- Link hijacking: Also called pop-up or redirects and occurs when a page loads and the viewer is automatically redirected to the app store or another URL. The Android operating system and iOS both have pop-up blockers installed, but these ads exploit a loophole allowing users to be redirected to the app store without even clicking on an ad.
- Malvertising: Use of online advertising to spread malware, another term for malicious software. Malware can disrupt computer information, access personal information, or in some cases, hack into private systems.
The best programmatic auctions have lots of buyers, including supply-side platforms (SSPs), demand-side platforms (DSPs), trade desks, networks, agencies and more. Each partner in the auction increases the chance of a high CPM, but also adds an element of complexity to the system, especially when publishers have multiple tags in their ad stack. This means that tracking down a bad ad can be a very arduous mission that requires an in-depth investigation of all of these relationships.
Most reputable ad networks and ad servers apply a range of protections and partner with a variety of third-party companies to actively fight bad ads. A select group of SSPs go to great lengths to block malvertising and other sub-par ad formats from passing through exchanges. One tactic includes maintaining strict contextual block lists, and constructing multiple filters to insulate publishers from malware, auto redirects, and auto-play audio ads. When bad players are found, they must be removed from the network and flagged globally to protect other networks and exchanges from their attacks.
Tackling this issue will require collaboration across the industry and allocation of significant internal and external resources. Task forces like the IAB’s Malware Detection Working Group have been formed to gather thought leaders in security, programmatic buying, and ad operations to identify the sources of problems and implement practices to stop their spread.
What makes the solution to ad fraud so complex is that there is no one culprit. Rather, bad ads are an industry-wide dilemma that often slip through the cracks and lurk behind the scenes for ad-tech companies large and small. The current best practice is for ad partners to use third parties to help secure their network in addition to implementing processes to quickly and accurately identify bad ads so they can be removed. In order to put a stop to ad fraud for good, all programmatic industry players – from the demand side, supply side, and everything in between – need to collaborate on standard practices and procedures that keep ad fraudsters at bay once and for all.
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