The Rise of Video Ad Fraud And How to Fight It

The following is a guest contributed post from Ignasi Prat, CMO at Tappx.

Video advertising is victim to a disproportionate level of ad fraud. Whilst video accounts for 45% of total ad spend, Forrester reports that it’s linked to 64% of all ad fraud. This startling report caused a great deal of buzz across the ad industry, with major concerns highlighted amongst all the key actors in the programmatic value chain. Obviously, fraudsters go where the money is. Video ads are a lucrative target for fraudsters, because it’s where brands are currently investing significant cash. This, in turn, unfortunately creates much more expensive ad spaces, therefore providing higher rewards for unscrupulous fraudsters. In order to understand why video ad fraud is on the rise, we first have to understand the context of this situation, and pose a number of important questions: What exactly is video ad fraud? How and when does video ad fraud occur? What actions and solutions are available to fight video ad fraud?

Ad Inventory Fraud

Video ad fraud is often linked with low-quality ads. These ads are usually of a poorer quality than that what which was sold to an advertiser. Examples of this type of fraud include poor positioning of a video ad, which isn’t favorable to catch the attention of users, or ads which are much smaller than the advertiser was promised. These shortcuts may be attractive to publishers who wish to fraudulently increase the amount of available ad inventory, minimizing the number of ads displayed, or minimizing the level of intrusive  ads for the sake of a better user experience.

New fraud detection tools and techniques can help to create a case to punish disreputable publishers which engage in these practices. These include bot tests which can detect non-human activity, and ad viewability metrics which can track where and how an ad has been displayed.. In the most severe cases, these tests could result in partnership termination for repeatedly non-compliant actors or parties.

Fraudulent publishers can indeed change their ways, as they’re influenced by the fact that advertisers and agencies can withhold payments, or request financial compensation for fraud. The power to hold publishers accountable will immeasurably help to improve industry standards and the trustworthiness around digital ad processes.

Third-Party Fraud

A more problematic type of ad fraud is called domain spoofing. This is when third-party fraudsters masquerade as known publishers, and fool advertisers into thinking they’re buying ad space from genuine publishers with good reputations. This type of ad fraud negatively impacts both advertisers and publishers. Both entities have ample motivation for eradicating fraud in domain spoofing, as advertising budgets and revenues go to waste.

Due to the nature of domain spoofing, it’s more complicated to resolve than simply punishing fraudulent parties, by demanding fees or withholding payments. To protect this industry and provide assurance for advertisers, we need to understand the techniques of fraudsters, and how can we fight them.

Recently, the text file ads.txt has gained recognition as a tool to create a standardized method of publisher authentication, which could curb domain spoofing-related revenue leakage. Recently, Adform published valuable findings about its investigations around domain spoofing methods, with solutions to help minimize it. Adform went public with this information with the key message of, ¨…a clear goal of further enhancing trust and transparency in Digital Advertising, and setting the bar at the highest possible level across all connected platforms.¨

Keeping industry standards high and delivering the best product

When one fire is extinguished, another one flares up, so it’s unlikely that digital ad fraud will be 100% eradicated. The skillset of fraudsters is ever evolving and adapting to new anti-fraud solutions which tend to be generally quite reactive in nature. However, all of the players across the digital ad industry (advertisers, publishers, ad agencies and anti-fraud organizations) have a vested interest in identifying, eliminating and protecting against digital ad fraud. As discussed, many of the businesses in this industry are committed to setting high standards of excellence.

Through our experience at Tappx, we have successfully reduced ad fraud rates including the video ad format, by developing proprietary in-house tools, partnering with reputable providers and nurturing ongoing relationships with tier one anti-fraud technology providers. It’s key to guarantee real interactions with publishers, and not deduct revenues that originate from fraudulent sources. These are some of the best practices to help minimize video ad fraud, which ultimately leads to better advertiser and publisher relations.