Ad fraud: a billion-dollar problem and a surefire way to get rich quick. For the criminals doing it, that is, writes Sacha Berlik (pictured below), managing director EMEA, The Trade Desk, exclusively for ExchangeWire. For advertisers, it’s a huge hole in their ad spend buckets and a global problem that needs to be addressed. Last year, an estimated £5.5bn of advertising spend was wasted globally on ad fraud, straight into the pockets of criminals. And, according to WPP-backed The&Partnership, this is set to shoot past the £8bn-mark by 2021.

The mistake many make is to see the problem as static – when ad fraud is actually a war that will be very difficult to win. You wouldn’t ask the police when all crime will be solved, and this is the same; every time one solution is found, another type of ad fraud pops up. It’s no wonder that so many businesses exist today with the sole purpose of cracking the crime.

At this stage, it’s worth noting that we can’t consider ad fraud in isolation. The problem is inextricably linked to issues like viewability, brand safety, and fake news, with all three involving the quality of inventory in the marketplace. And it’s essential to address marketplace quality from every angle to enable safe, efficient, and effective advertising campaigns.

But for the purpose of this article, I’ll focus on the matter at hand.

Debunking the myths

Firstly, what actually is ad fraud? For a term that is so freely chucked about, there is a concerning lack of clarity over what it means. Ad fraud is any deliberate activity that prevents the proper delivery of ads for criminal monetary gain – but, sneakily, it comes in many shapes and sizes. Ads can be ‘viewed’ by nonhuman bots; domains are spoofed so that click farms are disguised as premium sites; and chain buys see ad networks purchase inventory and resell it illegally. I could go on.

A common misconception is that all sophisticated invalid traffic (SIVT) – artificially inflated clicks or impressions – is bad. But it isn’t necessarily always the enemy. IVT can be totally legitimate when it’s activity occurring during normal internet maintenance, such as data centre traffic, search engine spiders, app data, brand-safety bots, and analytics tools. These ‘good bots’ aren’t generating money; they are simply helping to improve the ecosystem, even though they’re not human. The problem lies with the money-making activity.

It’s also important to make it clear that fraud isn’t just a programmatic problem. According to The&Partnership’s research, 12% of the online adverts bought directly from publishers, and not via programmatic methods, suffered from ad fraud last year. In fact, far from fuelling the risk, programmatic has shone a light on the issue, allowing us to understand and evaluate ad fraud in real time.

Solutions up the supply chain

Sacha Berlik, Managing Director, EMEA, The Trade Desk

So, whose job is it to lead the battle against ad fraud? Ultimately, responsibility should sit with the supply side. It’s up to publishers to protect the brands advertising on their sites – and this, by default, makes it the responsibility of the SSPs that represent them in the supply chain and aggregate the inventory. But it’s up to all of us to make noise and ensure the issue is addressed.

For brands and agencies, there are plenty of different fraud-prevention technologies available and, working with an open marketplace demand-side platform like The Trade Desk, they can pick and choose the tools they want to use for their campaigns. These are very effective, but – just like sticking a plaster over a cut – they’ll stem the flow but they won’t solve the problem.

Meanwhile, solutions that offer refunds to advertisers who have bought fraudulent media, while certainly a step in the right direction, simply don’t go far enough. After all, isn’t this like robbing someone, then paying them back? No one should be robbed in the first place. We need a real solution.

Prevention, not cure

I want to stay on the robbery analogy. There was a time when bank robberies made good business sense, as banks retained hard assets that were relatively easy to steal. As banking has become increasingly digitised, robberies have become much more difficult and the cost of getting caught now outweighs the gains to be made. We need to do the same with advertising: make our technology so sophisticated that it’s too difficult, too risky, and too expensive to commit fraud.

Ads.txt is one smart move which, for the first time, makes the supply source we are buying from totally transparent. Publishers drop a text file on their web servers that lists all the companies authorised to sell their inventory, meaning there’s no chance of shady reselling.

At The Trade Desk, we’ve taken it one step further. In an industry-first, we’ve partnered with White Ops to integrate its technology into our platform to determine if a real human is on the other end of a pre-bid programmatic advertising impression. This means that, for inventory made available by SSPs participating in this programme, before we even bid on an ad, White Ops checks whether it will be seen by a human – and if it won’t, it’s stopped before it reaches our platform.

And the good news is that advertisers don’t have to choose – or pay – to use this technology. It’s automatically baked into every campaign using a participating SSP’s inventory. But we don’t want this to be something unique that only we offer – we want the rest of the industry to follow suit.

What next? 

Technology is evolving rapidly and every day the ecosystem is safer for advertisers than the day before. But we still have a long way to go in the battle against ad fraud. Here are a few ways that the industry can help with the fight.

• Keep the supply chain short. The more players involved, the more chances there are for fraudulent players to creep in and unverified actors to resell inventory.
• Better collaboration across the supply chain. The buzzword doing the rounds at the moment is ‘co-opetition’ – that’s cooperation with our competitors to fight a common enemy. While the supply chain has to be competitive, we need one combined strategy – across the supply chain and across the world – to take down the criminal organisations.
• Demand transparency. To solve a problem, we have to see it. We need to understand what’s going on at every stage of the supply chain; and such transparency will only be provided by all if every player demands it.
• Don’t rely on unverified measurement standards. To avoid the risk of players acting as the referee – as is often the case with walled garden publishers – advertisers should always insist on independently choosing the fraud measurement tools they use.

Ad fraud has always been a risk in digital advertising, but now – with programmatic – we know more about it, and we’re in a strong position to address it. Unfortunately, we never know what the bad actors will invent next, so it’s very difficult to say with confidence that we’ll be able to solve the ad fraud problem. But one thing we can guarantee is that we – along with the rest of the advertising industry – won’t stop looking for the best solutions. Crime will never end, but that doesn’t mean we’ll stop fighting it.