Commentary

Be Wary Of Ad-Tech Stories That Are Too Good To Be True

by Dave Morgan , Featured Contributor, July 19, 2018

I am an optimist at heart. I wouldn’t be an entrepreneur if I weren’t. I try to see the glass as half-full. I want to believe what I’m told and what I read, even when my several decades of business experience sometimes brings out appropriate skepticism.

That’s why it’s hard to read through the announcements in our industry every day and not run into at least one that makes me pause and ponder its validity.

While companies in the advertising, marketing and media worlds are entitled to a certain degree of boosterism, the claims for technology solutions often reflected in the press are sometimes a bit extreme.

Here’s what I try to keep in mind as I review what seem to be inflated claims:

When it seems too good to be true, it very well might be. Remember the explosion in search clicks in the early aughts? Yes, both Google and Yahoo settled search-click-fraud class-action lawsuits in 2005 and 2006.

Remember the explosion in low-priced digital video ad inventory? But then, DoubleVerify found 50% more fraud in video ads than in display.

Remember when the exchanges offered large volumes of premium content websites at pretty low prices? Well, in 2016, FT.com found 23 exchanges spoofing its ad inventory.

Remember when Facebook claimed to reach 101 million 18- to 34-year-olds in the U.S.? Wasn’t true. The census reported that there were only 71 million 18- to 34-year-olds in America.

Remember all that “digital-like” programmatic TV advertising that was all the rage a couple of years ago? Most of its purveyors are gone or in other businesses today.

What might be next in the too-good-to-be-true vein? Over the past two months, I’ve read a lot of headlines trumpeting an explosion of buying and selling of video ad inventory on connected TVs. The numbers in these stories seem really, really big and growing really, really fast.

Now, there’s no question that a lot of people are watching a lot of streaming video on connected televisions today. However, as far as I know, the vast majority of streaming video providers and enablers today either have no ads -- Netlix, Amazon Prime, HBO -- or few ads, of which little or none is made available to third-party sales organizations: Hulu, ESPN, ABC, NBC, CBS, Sling and DirecTV.

Could fraud be lurking in the big numbers? Just over six months ago, eMarketer reported that 20% of DTV/OTT ad traffic was fraudulent, twice the rate of fraud found in desktop and mobile ads. The year earlier, fraud detection firm Pixalate estimated that 44% of total connected TV & OTT user traffic was fraudulent, apparently from bots and torrents running within some of the apps that have been downloaded to the screens.

To their credit, some companies are trying to get in front of this fraud. Just yesterday, video ad supply-side platform Telaria announced a deal with White Ops to monitor for fraud on connected TV inventory.

The key is to keep a healthy skepticism when reading stories based primarily on company announcements. Everyone can be forgiven a little exaggeration here and there, but rare is the reporter who goes back and compares what a company announces and what has unfolded since then. Many of the "promises" made in industry announcements are not held to accountability when third-party research starts to find dings in the armor.

With the increased number of announcements about the advanced TV market, I hope that ad buyers, agencies and platforms exercise real scrutiny — something that hasn't always happened for bright shiny objects in the past. What do you think?

ad fraud

9 comments about "Be Wary Of Ad-Tech Stories That Are Too Good To Be True".

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Ed Papazian from Media Dynamics Inc, July 19, 2018 at 5:52 p.m.
Dave, as you must know, I heartily agree with you and have been saying much the same thing for about four years now on this and other media/advertising forums. There are a lot of dreamers out there who just can't be bothered to dig in and look at the facts. If some of us keep speaking out---not against ideas or concepts that have legitimate value but mainly against the hype and false promises, perhaps some of the dreamers will wake up---at last.
Reply

Henry Blaufox from Dragon360, July 19, 2018 at 6:45 p.m.

One other method of analyzing what's behind the curtain for ad tech firms - check their financial announcements on their, and outside news pages. Then, look at their "careers" pages. A firm burning through funds while listing numerous open positions is a caution signal. Either their staff are bailing, or they are pretending to add in support of growth. And never mind the free beer Fridays, that doesn't pay the mortgage or provide the money to raise the children.

Dave Morgan from Simulmedia replied, July 20, 2018 at 9:46 a.m.

Yes Ed, you and I are on exactly the same page. Dreaming of new, better solutions is a good thing, but hope isn't a strategy and failure to appropriately diligence claims happens all too often in our business and is negligent.

Dave Morgan from Simulmedia replied, July 20, 2018 at 9:47 a.m.

Very good points Henry. There are a lot of ways to now better diligence technology firms to better understand their true capacity to be a strong, long-term partner.

Jack Wakshlag from Media Strategy, Research & Analytics, July 20, 2018 at 5:47 p.m.

Only the client loses when fraudulent impressions are paid for. Agencies and others hired to protect and act in a clients interest make money on fraudulent impressions. Clients will begin bringing this all in house. It is a sad state of affairs.

Tom Cunniff from Tom Cunniff, August 22, 2018 at 2:18 p.m.

Generals are always fighting the last war.

When media was scarce and media owners had disproportionate pricing power, it made sense to bargain as hard as possible. Today, the situation has completley flipped: there is rampant oversupply of media and rampant undersupply of consumer attention. It no longer makes sense to buy cheap (and often fraudulent) eyeballs when the current war demands buying with the goal of attracting increasingly scant human attention.

People are or have been suckers for ad tech overpromise because:

They are unwilling/unable to question their ingoing assumptions;

They are unwilling/unable to resist overpromise for fear of being seen as a dinosaur;

The hard and soft costs of taking a smarter approach exceed the hard and soft costs of doing business-as-usual.

Clients can (and will) bring much or all of this in-house, but the problem isn't so much where or how the work is done but in how incentives are aligned.

If marketers align the incentives to buy as cheaply as possible (even with whitelisting parameters, etc), the problems will continue.

If marketers, instead, have the courage to shift their approach so that they begin to fight today's war rather than yesterday's, then things can improve.

Jack Wakshlag from Media Strategy, Research & Analytics replied, August 22, 2018 at 3:29 p.m.

There are cheap impressions and there are fake impressions. Only the client/advertiser cares about this difference. Everyone else makes money when they accept one for the other.

Ed Papazian from Media Dynamics Inc, August 22, 2018 at 5:27 p.m.

Tom, of course you are right about the ultimate goal of media buying. But let's be fair. Too many "clients" pay scant attention to the media function and dictate their media mixes on whims and "doing it like we always did". Worse, they can't be bothered to take the time to learn about the many new options that are available in media --and the pitfalls. So they use numbers grinding bean counters to evaluate their media buys---based on "raw" and, in the case of digital, often fake audience data and Lord help an agency media buyer who underperforms in generating the precious numbers. As for what's being taken in-house, it's mainly digital---the "wild West" of media---and most of this activity is of the sales promotional or direct response variety---not the kinds of ads you see on network TV, in major magazines, etc. Until clients accept more responsibility for the direction their own media planning and buying is taking---and that means hands-on involvement---not just pontificating at industry gatherings while the agencies must take all of the blame and remain quite---nothing will change.

Ed Papazian from Media Dynamics Inc, August 22, 2018 at 5:33 p.m.

My typing is improving all the time but I meant the agencies remain "quiet" not quite" in the second to last sentence in my post. Sigh! Maybe, one day MP will give us posters an editing opition----please.