• by Philip Rosenstein , August 22, 2016

Ad fraud is a huge problem in the online advertising ecosystem, but it's not necessarily shifting dollars away from programmatic, according to a panel at Monday's Programmatic Insider Summit. However, fraud is forcing marketers to become more strategic and cautious with their buying strategies.

While buying ads programmatically can greatly enhance targeting and measurement, the volume and real-time qualities of programmatic buying can leave campaigns open to supply-side fraud.

“We are not seeing a shift in dollars away from programmatic advertising as a result of fraudulent activity,” noted Belinda Smith, digital media lead at McGarrah Jessee, speaking at MediaPost’s Programmatic Insider Summit. “There is a shift in deal types due to fraud, however. We see strategies moving into customized content, first-look opportunities and PMP [private marketplace] deals,” Smith added.

“The brunt of the fraud conversation has fallen on the programmatic space. Brands and marketers have looked for better KPI [key performance indicator] alignment and moved away from simple media metrics. Instead, many focus on life-time value and other more representative metrics over CTR [click-through rate], for example,” Smith said.

"Though most of us are fundamentally using the same anti-fraud tools, we need to constantly test, iterate, learn, and adjust," said Nicholas Galante, director of programmatic at Direct Agents. "When vetting different anti-fraud solutions you must continually ask for feedback from vendors. We try to work with the full breadth of DSPs [demand-side platforms] and over time, we can detect where better downstream success is coming from." Galante added: Making sure you ask the right questions and stay abreast of novel technologies is paramount to minimizing the risk of fraud."

"It's hard to stay ahead of these fraudsters, however," noted Joshua Niederriter, head of programmatic at Fetch. "Having an analyst or team that constantly checks for signs of fraud is central to mitigating the development of new fraudulent programs."