The blocky 300x250 banner ad has long been one of the most common ad units in the display advertising marketplace, but thanks to some ingenuity, cunning and outright fraud, it has also become one of the most common video advertising units sold via programmatic ad exchanges.
According to a first-of-its-kind analysis, the postage stamp-like 300x250 banner ad now represents nearly a third of all video ad units sold programmatically.
The problem began when enterprising programmatic arbitrageurs figured out they could buy low-demand 300x250 banner units and stuff them with much higher-demand -- and more expensive -- video ad players.
In other words, a 300x250 static banner ad might be bought on a programmatic exchange for $1.50, stuffed with a video player and resold as a $9.00 CPM video ad unit.
Not surprisingly, the practice leads to a lot of fraud, or at the very least, misrepresentation or non-disclosure that advertisers paying for a standard video ad unit are actually getting a mushed-up 300x250 with their video ad squished in.
We were surprised by how pervasive this ad unit was,” says John Murphy, vice president of marketplace quality at programmatic ad exchange OpenX, which partnered with Pixalate to conduct the study.
As part of the release of that data, OpenX is also announcing today that it will no longer trade 300x250 video ad units on its exchange.
Murphy says that’s for two big reasons -- one being the obvious degradation in quality that occurs for advertisers and consumers alike, when a video ad created for an optimum aspect ratio is forced into the 300x250s blockish format.
The other reason is even more insidious, Murphy explains, because the 300x250 video ad units are more prone to being fraudulent -- about a third more likely than the average programmatic video ad unit.
According to the Pixalate analysis, about 11.3% of 300x250 programmatic video ads meet the industry’s standard for “invalid traffic,” whereas only 8.5% of all other programmatic video ad units (excluding 300x250s) are deemed invalid.
“There are cases where some publishers are legitimately offering 300x250 video units, but we believe they often misrepresent the nature of the ad unit, claiming it is a standard ad size, in which case it is fraud,” Murphy says, which is why he says OpenX will no longer trade them.