Rise Of the Authenticators

The digital ad business faces two existential threats right now. The first is from the ad blockers that consumers are adopting in droves; 198 million people currently run ad blockers and these numbers are increasing at an incredible 41 percent year-over-year. The second is from ad fraud, a huge issue that’s been brewing for years. (I realize, somewhat sadly, that my first column on this issue appeared in ClickZ more than a decade ago.)

Ad fraudsters will steal more than $6 billion from advertisers and publishers this year, if recent projections by the Association of National Advertisers are accurate. The loss to publishers from ad blockers? A cool $22 billion.

Crooks and Ad Networks

These two threats are intimately related. Consumers aren’t installing ad blockers just because they’re annoyed by bad ads; they’re doing it because they’re terrified that their devices will be hijacked by “malvertisers” for evil purposes.

According to cyber security firm RiskIQ, malvertisements have increased 260 percent on a prorated basis in the first half of 2015 (450,000), compared with all of 2014 (250,000). Bronium, another cyber security firm, also reports that “Notable websites unknowingly hosting malvertising included cbsnews.com, nbcsports.com, weather.com, boston.com and viralnova.com.” Last week, Yahoo joined this unlucky group, after hackers exploited a weakness in ad supplier AdJuggler.

The good news? Lots of smart people are working to fix this problem, including the Trustworthy Accountability Group (TAG), a blue ribbon group with reps from Google, Facebook, AOL, and several ad holding companies. The IAB’s Anti-Fraud Working Group and a scad of private for-profit firms are also working to fix this.

The bad news? The criminals on the other side of the equation are equally smart, highly motivated, considerably more numerous, and are so far, proving to be unstoppable.

TAG and the other groups are trying to screen out bad actors by creating databases and other mechanisms to spot and squelch malvertisers. There’s nothing wrong with this approach, but it’s incomplete. The only way to guarantee that ads are being shown to humans and not just well-trained bots is to limit advertising to networks consisting of actual humans whose identities can’t be faked.

I call these networks the “authenticators.”

Authenticators Know Who You Are

Only a few players in the online ad ecosystem provide eligible networks. One of the reasons Amazon can advertise effectively is that it knows who you are and know exactly how valuable you are. Facebook probably has an internal score that indicates the likelihood that a profile is real, so it can look at impressions outside their network.

If you are doing retargeting, you can be your own authenticator for a chunk of your audience. Consider creating several audiences and groups of cookies. You can also devise a custom score based on how a cookie is transacted or if the visits look authentic. This can make your campaign more effective. Want additional authenticated impressions? Use custom audiences in Facebook or another player.

Networks where people make purchases – including Amazon, eBay, PayPal, Google Wallet and Apple – also have this quality. AOL’s subscriber base might be aging and churning, but at least it’s human. Add Verizon’s customer base and plug in some programmatic ad technology, and you’ve got something.

ISPs such as Verizon, Comcast, and Time-Warner have similar advantages. Frankly any company with a large verified consumer base – Costco, Walmart, Macy’s, HR Block, or the AARP – is in a strong position to build such a network. My hope is that we’ll see more development on these authenticated networks soon.

The Rocky Road Ahead

Someday, I’m sure we’ll all look back at 2015-style ad tech and wonder why so many advertisers were willing to tolerate an ad ecosystem that is rampant with fraud and fakery. The rise of the authenticators – the networks consisting exclusively of humans and not just browsers or user agents – will eventually put an end to these bad old days.

But it won’t happen overnight and in the meantime, there is little doubt that the ad ecosystem has some rough and possibly ruinous days ahead, especially for publishers. When Apple’s iOS 9 goes gold in September and ad blocking extensions for its popular Safari browser are made available, we’ll be able to better judge whether mobile consumers are willing to continue to suffer the status quo, or vote with their clicks for a completely different model that doesn’t yet exist.

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