• by Tyler Loechner  @mp_tyler, January 29, 2014

Ad fraud is a major concern for digital advertisers -- with new reports suggesting fake clicks could result in over $11.5 billion lost in 2014. But it’s a problem that is being successfully dealt with in the exchange-based marketplace, according to Integral Ad Science.

Integral released a quarterly report on media quality in the digital ad industry, with a focus on brand safety, viewability and fraud. The company says “suspicious activity” on ad exchanges decreased from 30% in Q4 2012 down to 13% in Q4 2013.

Integral says the data comes from over 2 billion impressions per day from “nearly all” major exchanges, five leading demand-side platforms (DSPs) and agency holding companies. Integral grades impressions based on a number of criteria, including viewability, fraud, ad clutter and brand safety.

The report compares ad exchanges, which is where real-time bidding (RTB) occurs, to ad networks and direct deals. Exchanges (13%) beat out networks (15%) in terms of suspicious activity. As one would expect, direct deals (2%) had a low rate of suspicious activity.

Exchanges were the worst in terms of viewability. Ads placed through direct publishers were in-view 66% of the time last quarter, compared to 50.6% through networks and 47.4% through exchanges.

Even with the strides made to combat fraud, Integral still rates exchanges and networks behind direct publishers in terms of a “true advertising quality” score. Direct publishers received a score of 684 out of 1,000 in “true advertising quality” from Integral in Q4 2013. Exchanges and networks received a score of 597.

This data should not be surprising, given the fact inventory placed on exchanges is typically remnant, while direct deals are still commonly associated with more “premium” inventory.

Even though RTB usually deals with less valuable inventory, marketers are doing what they can to make sure it’s still worth their money. While the industry may not see the rate of suspicious activity on exchanges match that of direct deals, other factors -- such as viewability -- could start to even out across the board.

“We're seeing more ads are in-view, and brand safety and suspicious activity problems are being tamed over time,” stated Scott Knoll, CEO of Integral. “Overall quality has improved.”