Doing this column can seem surreal sometimes. I have a 30-year history of covering media, with a focus on advertising, but can recall dealing with the issue of fraud only a handful of times. Once, when a con-man publisher printed only enough issues of a magazine to send out to the agencies that placed ads. And with radio, not all ads that were paid for actually ran.
Shocking? Maybe. But what do we make of the latest report from data intelligence platform Pixalate? This survey asserts that more than half of connected TV and over the top (OTT) ad impressions served programmatically were fraudulent in the first quarter of this year and that Android mobile ad fraud rates are 3x higher than iOS.
“Marketers need to be especially careful when buying mobile video advertisements on smartphones — particularly Web inventory, given that over half (56%) of such inventory was fraudulent in Q1 2017,” the report states. And, incredibly, Japanese desktop ad fraud reached 80%, closely followed by the sorry rates of Brazil. U.S. desktop ad fraud is about 38%, Pixalate says.
Pixalate is a Los Angeles-based data platform focused on bringing “transparency to programmatic advertising.” Its Web site says it monitors “hundreds of billions of ad events in real time by tapping into the global RTB data stream, providing insights to optimize performance, benchmark supply quality, and eliminate fraud.”
So let’s assume these numbers are accurate. What do we conclude? That the ludicrous rush to domination by Google and Facebook makes sense. Ad tech companies can form all the coalitions they want, but marketers are still going to flock to Google and Facebook because they are assured of some basic honesty and reliable results.
What drives Japanese programmatic advertisers to place their ads into an ad tech cesspool where only 20% deliver what is claimed? We can’t imagine.
WPP reported this year that $16.4 billion could be lost from fraudulent traffic, clicks that are automatically generated by bots. This after the ANA estimated $7.2 billion was lost the previous year in the same manner. So ad-tech fraud more than doubles in a year?
I have often mused that the business has a very rocky future. Seeing results like this makes me wonder if it has any future at all. Put it in perspective. Suppose half of the ads paid for in Time Inc. magazines didn’t actually run? Time Inc. would be out of business in a week.
What’s the difference? Magazine ads are, shall we say, fairly easy to monitor. Either the ad is there or it isn’t. But, as Jalal Nasir, CEO of Pixalate, told Philip Rosenstein of Real Time Daily, “What is happening in the connected TV/OTT space is similar to what has happened in mobile. As in mobile, measurement in connected TV/OTT is very difficult to do, which has made it a breeding ground for fraudsters. They have moved from desktop display to mobile and connected devices.”
Sounds like an epitaph for an industry to me.