Commentary

Digital Video Fraud, Viewability And The $50 Rolex

by Dave Morgan , Featured Contributor, October 30, 2015

It’s now pretty clear that a lot of digital video ad deliveries over the past few years were of suspect quality. That’s not news to anyone in this industry. Most analysts are estimating that at least one-third of digital video ads bought over the past two years were un-viewable, fraudulent or the product of robotic traffic.

Many folks are asking how this could have happened. To me, who lives and works in New York City and who has been part of the digital ad industry since it was born in the early ‘90s, it all seems pretty straightforward. What happened in the digital video market isn’t much different from the $50 Rolexes sold on Canal Street.

Rolex watches are famous and expensive, with real and imagined qualities desirable to many in the world. Many people want them. But many of the people who want them aren’t really prepared to pay the going rate for a real Rolex.

Premium digital video advertising placements are like Rolex watches. They are much talked about. They are expensive. They have real and imagined qualities desirable to many advertisers. However, there is a very limited supply of real premium digital video ad placements. And, just like aspiring Rolex owners, many advertisers who want premium digital video advertising aren’t really prepared to pay the going rate for those placements. Buying video ads on sites like NYTimes.com or ESPN.com or BusinessInsider.com is expensive.

So, just like the person who has a friend visiting New York City and gives them money to find a “bargain” Rolex on Canal Street, these advertisers pay their agents to buy “bargain” premium video for them. Unfortunately, unlike the person with a bargain “Rolex,” it seems many of these advertisers actually believed that there was such a thing as “bargain” premium video placements at TV-like scale.

How did that happen? Well, I grew up in a small coal town in the mountains of western Pennsylvania, so I feel like I can figure that out, too. Many advertisers are naïve. They want to believe in the free lunch (and a lot of other stuff, much of which appears to come “free”). They don’t understand the big city. They don’t want to tell their bosses what their bosses don’t want to hear. Incredibly, many of them do believe that they can actually get more for less without making big investments to get it (such as in talent, technology, or data, for example).

Unfortunately, so many of them were chasing – and blinded by – the bright shiny object of being the coolest buyer in their town of social-linked, mobile-first, digital video ads, that they only started to learn what they’d really gotten well after the fact.

Were these advertisers naïve or negligent relative to the fraudulent, un-viewable and robotic video inventory that they have been buying over the past few years? Of course they were. Have their agents done their job to help save advertisers clients from themselves? Of course they haven’t. Too many of the agents had co-mingled economics with the purveyors of the tainted inventory.

Who will be the big losers here? All in the industry lose to a degree. Trust in the ad industry and trust among industry participants have been irreparably harmed. Digital video intermediaries will lose even more because they were facilitators. Agents will lose because they caved in to their clients’ unreasonable demands and ended up too close to the purveyors of the fake Rolexes.

Who will win? Marketers will. It took issues of fraud, viewability and robots to shake them out of their media passivity. I believe that many of them will be much more directly involved in their advertising in the future.

Also, TV advertising will win in spite of its “legacy” media perception, since it delivers real viewership at real scale with real impact. And just maybe, people might dig a little deeper in the future to understand what is truly going on when they hear senior industry executives proclaim that they’re going to shift massive amounts of their TV budgets to digital — when everyone that really knows the numbers, knows that there aren’t enough real Rolexes (or real premium digital video placements) at appropriate price points to consume that spend.

What do you think? Are our industry’s $50 digital video Rolex days behind it?

ad fraud, viewability

6 comments about "Digital Video Fraud, Viewability And The $50 Rolex".

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Ed Papazian from Media Dynamics Inc, October 30, 2015 at 6:34 p.m.
Good article, Dave. I have seen with my own eyes how negligent many advertisers as well as their agencies were about digital media buying. They simply couldn't be bothered to do their homework and, of course, the agencies wanted those billings. Of course, many sellers, who were aware of the "phantom" impressions they were getting paid for, kept mum as well, which is a great blot on the digital selling side.

On a positive note, now that a new breed of advertisers has, at last, been drawn in---mainly by the availability of video ads----I'm referring to TV-oriented "branding" advertisers, a lot of questions---many being exactly the same as have been asked of "linear TV" will be asked about digital and rational answers will be insisted on. So, to answer your last question, even if the big digital ad sellers don't take the lead and clean up this mess, as well as organizing digital as both an ad-as well as a user-friendly medium, the branding folks probably will try to do so---or they will walk away. And nobody really wants that to happen---do they?
Reply

Dave Morgan from Simulmedia, October 31, 2015 at 7:54 a.m.

Great points Ed. I agree with you. I do think that the new breed of advertisers will bring change, even if they are some who won't be proactive on their own.

Joshua Chasin from KnotSimpler, November 2, 2015 at 9:56 a.m.

This reminds me of a conversation we had in a graduate marketing class when I was working on my MBA nights in the '80s. We were talking about price. I offered that on the way to class, I passed a guy selling "Rolex watches" by the subway entrance, for $20. "Twenty dollars?" I said. "What do you think I am, stupid? Fifty, maybe. But not twenty!"

Andreas Schroeter from wywy, November 2, 2015 at 10:46 a.m.

As long as you can impress someone with your $50 Rolex there will be people buying that kind of inventory. But as more and more people get educated about viewability, fraud etc. the big budgets will shift towards the "real" inventory. In addition, it's on every serious video network's radar screen, all of them addressing this issue, thereby educating their clients (even if they do not want to hear about it).

I like to compare it to the SEO emails I get every now and then: "I guarantee a #1 ranking on Google". Sure, someone might still go for that, but most people have figured out by now that noone can guarantee a ranking on Google with a $50 budget a month.

Fred Tietze from Time Inc, Content Solutions, November 3, 2015 at 2:08 p.m.

As usual, Dave sums it up. Its no surprise that Private exchanges are the fastest growth segment in programmatic. And with all the discusion of the demise of "legacy" media, TV will continue to be THE force in delivering scale and also high quality environments.

Dave Morgan from Simulmedia replied, November 5, 2015 at 10:01 a.m.

Love it Josh. Your comment is a perfect end-cap on my column!