How Publishers and Advertisers Can Prevent Ad Fraud

By: Calvin Scharffs, VP, Product Marketing of Pixalate

Connected TV (CTV) and Mobile Apps remain the fastest-growing channels for programmatic advertising even as ad fraud eats roughly 25% of spend, according to recent Pixalate estimates. The continued lack of transparency in CTV and mobile in-app environments means that brands still struggle to verify they reach their audiences where billions of dollars are spent.

Millions of publishers vying for user eyeballs and advertiser checkbooks, and comprehensive analysis regarding publisher quality and safety remains scarce, even as the programmatic ad marketplace experiences explosive growth. This leaves advertisers in the dark when it comes to knowing how safe and effective ads will be, and it makes it difficult for publishers to understand how they stack up against the competition.

There are two key issues facing publishers as it relates to ad fraud. The first is that a large majority of publishers are small- to medium-sized and lack the resources and bandwidth that more prominent content companies have when it comes to managing programmatic ads. The second is that historic industry metrics, such as reach, are outdated and not helpful or meaningful in today’s ever-changing ecosystem. Let’s take a deeper look at these obstacles and how publishers and advertisers can work together to combat ad fraud.

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The Disenfranchisement of Small- and Mid-Size Publishers

Publishers of every size face adversity through not being able to identify or diagnose the quality of traffic and brand safety concerns. For example, it was reported that in Q4 2020, programmatic CTV advertisements had a 24% invalid traffic (IVT) rate. Additionally, IVT rates were between 19% – 24% for the entirety of 2020. This should be a huge red flag for publishers to be more aware of the types of ad fraud behind the scenes.

In general, large publishers can often navigate through common ad fraud roadblocks simply because they have more resources to dedicate to traffic quality, enabling them to monitor and identify ad fraud in a more streamlined manner. Small- and mid-size publishers rarely have the resources to manage ad quality effectively. Yet, to stay in the game, they must prioritize creating safe environments for advertisers.

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Outdated Reach Metrics Hinder Industry Growth

For over 20 years, advertisers have relied on outdated reach metrics from companies like Alexa, Comscore, and Nielsen. There has been no industry standard that incorporates quality when examining publishers. It’s hard to put trust into data that completely lacks a quality-based assessment and is inadequate for what advertisers need today. The old model — that more reach equals a better placement — is antiquated, and advertisers have since realized the importance of the quality versus quantity balance.

There are 5M+ CTV and mobile apps in the ecosystem today, and that’s where advertisers are willing to put their money. But they have to think twice before vying for ad space on many publishers based on current metrics. As a whole, the industry has taken some steps forward to provide publishers with more transparency in the process, but there are still significant gaps in the data.

So what can publishers and advertisers do? The first step is to understand the real threats that fraud represents to the advertising ecosystem: Economic and reputational. Both publishers and advertisers should understand how ad fraud can – and likely currently do – impact them and the partners they are working with. As brand safety continually becomes one of the most critical aspects of advertising, the industry must have open conversations with industry experts about safety standards and rankings that help shine a light on publisher information in these spaces and deliver on the programmatic promise of effectiveness and legitimacy.

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