A lot of F-bombs were dropped on stage at the Coalition for Innovative Media Measurement (CIMM) meeting in New York City earlier this week.
And no, it’s most likely not the F-bomb you’re thinking of.
Fraud continues to plague the online advertising ecosystem, including linked television. However, many in the ad tech business would prefer to overlook the issue.
Why? Because admitting wrong behavior would necessitate more action to correct it, said Simulmedia CEO Dave Morgan.
READ MORE: Why CTV Ad Purchasers Continue To Have Doubts About Generative AI
However, Morgan estimates that on CTV alone, 30% more inventory is sold than what is actually being watched in the United States, implying that “there’s a 30% chance” that what you’re purchasing is fraudulent.
When you include in the amount of inventory available for less than $10 CPMs, often with rebates exceeding 50%, the mechanics of “supply and demand [should] tell you it shouldn’t be there,” Morgan noted.
So, what is to be done?
What we say when we talk about fraud.
First, it is probably necessary to define terminology.
READ MORE: Are YouTube And CTV Brand Safety Still Important To Marketers?
Morgan believes that simply ignoring fraud is equally terrible as engaging in dishonest action. He likened it to purchasing an obviously counterfeit item on Canal Street without asking too many questions and then selling it to another person as if it were genuine.
All aboard the AIO Train to Nowhere; talk about overfeeding.
“If it came in too cheap and at too high a volume, you should know,” according to him. “That is fraud.”
Not everyone agrees, however. Soo Jin Oh, Chief Commercial Officer at FreeWheel, stated that true fraud necessitates intentional misrepresentation.
Consider CTV, she said, which has a lot of ambiguity built in, such as hashed device IDs, a lack of cookies, and strategies based on probabilistic data, all of which obscure where inventory comes from and make it easier for real fraud to slip in among the errors and inefficiencies.
READ MORE: Taking The Friction Out Of CTV’s Content Discovery
And there’s little motive to fix the problem due to a wide range of “misaligned incentives,” according to Eva Papoutsakis Smith, a go-to-market consultant for Mediaocean’s ad fraud detection product, Protected Media.
“We have a deep hunger for high volume [and] low CPMs, so there might be people that put their finger a little bit on the scale,” said Papoutsakis Smith, who previously led Pinterest and Ziff Davis.
The Fraud Fix
It’s easy to blame marketers for being tempted by low-cost, high-volume content and offering inappropriate incentives to their partners. Arielle Garcia, chief operating officer of Check My Ads and a former UM executive, noted that agencies, particularly holding corporations, are frequently paid primarily on volume.
However, the bigger issue, according to Papoutsakis Smith, is that many of the current techniques for detecting fraud are predicated on “looking for something negative,” rather than recognizing excellent inventory and creating positive connections with publishers.
However, CIMM Managing Director Jon Watts suggested that accountability should ultimately rest with the programmatic intermediaries that gather and present CTV inventory to buyers.
To help establish the transparency required to combat fraud, CIMM created a series of recommendations and best practices based in part on Morgan’s feedback.
To ensure the lawful ownership and quality of CTV inventory, intermediaries should be subject to strong Know Your Customer (KYC) standards, such as inventory due diligence programs and inventory supplier identification systems. Intermediaries should also commit to regular independent audits. CIMM also proposes the implementation of clawback procedures and financial penalties for facilitating fraudulent transactions, as well as improved collaboration between buyers and sellers to enforce these procedures.
However, while the business definitely needs to improve its ability to detect fraud from within, Garcia believes that outside regulation may be required for improvements to truly take hold, citing a recent Vermont bill that Check My Ads assisted in introducing to the legislature. If passed, the law would introduce both KYC rules and duty of care duties, making ad tech companies legally obligated to work in the best interests of their advertising and publisher clients.
“I don’t think that self-regulation is going to fix this,” Garcia told me.
Nonetheless, Morgan stated that it would be beneficial “if we would actually call out our worst criminal kind.”
Perhaps it is time for the industry to improve its ability to pronounce the F-word aloud.
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