Anti-Ad Fraud 'Penalty Box' Remains Empty

Industry Group Plans to Establish In-House Trading Desk to Better Understand Fraud

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The "penalty box" promised by the advertising industry's new anti-fraud group remains vacant.

Linda Woolley, CEO of the Trustworthy Accountability Group (TAG) -- an organization created by the Interactive Advertising Bureau, the American Association of Advertising Agencies and the Association of National Advertisers -- said in November the group would put bad actors in a "penalty box," promising the naming of culprits, a rarity in the advertising industry.

"An enforcement program that doesn't have teeth doesn't do anybody any good," Ms. Woolley said at the time. "TAG plans to call out bad actors."

The advertising industry is set to lose $6.3 billion dollars to fraud this year, according to a joint study by the ANA and fraud fighting company White Ops.

In a recent interview, Ms. Woolley said it's still too early to say when a bad actor may inhabit that penalty box. It's not likely to happen anytime soon. "In six months we'll be able to identify pretty clearly who is doing what and whether they're doing what they say they're doing," she said. "So, maybe six months."

Still, Ms. Woolley said the group is staying busy. "We're making amazing progress," she told Ad Age. Earlier this month, for instance, TAG released an anti-piracy initiative meant to point out risky sites.

The group is also in the early stages of creating a registration system for companies in the space. "If we do it right, that kind of tool, even at its bare minimum could provide some indication of whether you're dealing with a legitimate entity," Ms. Woolley said. That registration system could require companies to put forward information like a tax identification number, Ms. Woolley said.

The hope is that significant players join the registration program and will only want to deal with other registered companies. Ms. Woolley said that system will likely be established during the second quarter.

Mike Zaneis, the IAB's exec VP-public policy and general counsel, said TAG will also be establishing an in-house trading desk that will buy, and perhaps sell, digital ads in order to better understand the problem. "The idea is to stand up a trading desk, so that we have this kind of intelligence into the marketplace and then to help clean it up," he said.

The industry groups have already committed a total of $1.5 million of funding to TAG, so it will have the funds for such efforts.

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