Google has been working to develop tools that will give advertisers more information about the ads they buy through its platform, but late last week its parent company, Alphabet, began sending letters to hundreds of marketers and partner agencies about issues with ads that have run on websites with fraudulent traffic.
The ads were bought through Google DoubleClick Bid Manager. Most were bought during the second quarter of 2017.
"We can't comment on specific details of ad fraud but the vast majority is filtered in our systems before our advertisers are ever impacted or charged," per a Google spokesperson. "Maintaining a healthy ads ecosystem and improving transparency in supply chain for our advertisers is an area we continue to invest in significantly."
Google has been working on several safeguards.
Some of those key initiatives include working with other industry executives and companies to make it easier to spot counterfeit ads through ads.txt in Google's platforms. The ads.txt initiative for publishers introduced by the Interactive Advertising Bureau Tech Lab aims to help ad buyers avoid illegitimate sellers has been slow to gain traction, but Google keeps pushing.
The ad.text file, a simple file uploaded to a publisher's site, lists the programmatic supply-side platform that officially sells inventory. The file also has a list of IDs, so buyers can match the ad inventory with the publisher.
Google also is working with its exchange partners to remove monetary incentives for spammers and increase transparency for buyers.
A study commissioned by WPP ad agency The&Partnership and conducted by ad verification company Adloox estimates advertisers could waste up to $16.4 billion in fraudulent traffic and clicks by bots in 2017.
"These fraud issues for Google are representative of how advertisers are beginning to hold their publishers more accountable with managing the data generated from their campaigns and the accuracy and quality of that investment," said Jason Beckerman, CEO and co-founder at Unified. "The fact that Google is refunding money here means a lot of other ad networks are being forced to do the same, and with good reason -- brands are finally getting what they deserve from their marketing investments."
Google reportedly said it will begin issuing refunds to advertisers, but at a fraction of the cost of the ads served to invalid traffic. It also offered to reimburse its '"platform fee'" that ad buyers say range between 7% and 10% of their total purchase.
The refunds are specific to DoubleClick and have nothing to do with AdWords, specifically, one agency partner told "Digital News Daily."
The biggest difference is that DoubleClick Bid Manager is a platform that buys ads across the industry, not just with Google. AdWords is just inventory from Google.
Dennis Buchheim, GM of the IAB Tech Lab, "applauds" any effort to increase transparency among buying platforms and marketplaces to reduce the portion of buyers’ budgets that fund fraud.
Maybe, but John Donahue, chief product and marketing officer at Sonobi, believes Google continues to struggle with transparency in its auction. "While refunds are great, transparency is the new requirement and the best defense for ad fraud," he said.
Despite a 10% increase in advertising spend this year, a report from the Association of National Advertisers estimates global losses from digital ad fraud should fall by 10% in 2017, from $7.2 billion to $6.5 billion.
Traffic sourcing is still the major risk factor for fraud, according to the report from ANA and White Ops. The report said 3.6 times as much ad fraud came from sourced versus non-sourced traffic.