Tensions Over Fraud Run High as Advertisers and Publishers Meet

Industry Struggles to Address Problem

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Advertisers and publishers had a frank discussion about ad fraud at the Interactive Advertising Bureau's Annual Leadership Meeting yesterday. The town hall session, titled "Confronting Fraud: It's Time to Clean Up the Industry," highlighted the conflicts that exist, as the industry struggles to deal with the issue.

"We're getting ripped off," said Bob Liodice, president-CEO of the Association of National Advertisers, in front of a room consisting mainly of publishers and ad-tech companies. "You asked about the temperature?" he said, looking at one of the facilitators. "The temperature is very hot. Very very hot."

Mr. Liodice's pointed remark was typical of the discussion, where advertisers demanded the problem be eradicated. And publishers insisted they're working on it.

"As much as you're angry about it on the buy side, we see the exact same thing on the publisher side," replied Walter Knapp, CEO of Sovrn, a publisher network that was once Federated Media. Mr. Knapp said publishers are also being hurt by fraud, and those doing the right thing merit advertiser dollars. "These publishers are getting completely screwed," he said.

Mr. Liodice asked those in the room to tell him what will be done over the next year to "take a major chunk out of fraud."

After a pause, Mike Zaneis, IAB exec VP-public policy and general counsel, responded. "We've shied away from just putting out a number at IAB," he said. "We know it's a problem. We just accept that as a truism. And so we want to do as well as we can to begin to roll out effective solutions."

Lou Paskalis, senior VP at Bank of America told the crowd they needed to think about more than simply identifying the problem. "What are we going to do about it once we've identified this?" he asked. "Are we going to electronically zap everybody who's got bots so that we fry their computer? I for one would like to do that," he joked, eliciting laughter from the crowd.

Mr. Paskalis then advocated for a "scarlet letter" to be put on those engaging in bad behavior. "How do you put those people out of business?" he asked.

When asked following the session if he was satisfied with the responses to his question, Mr. Liodice said, "No. I'm not."

"I'd rather have a goal," Mr. Liodice added. "Shoot for something very specific, and then even if we didn't make it, at least we know where we are."

Mr. Liodice said that if the industry is not better off in a year, marketers could take their money and move it to TV, print, radio and billboards. "If the reputation of the digital industry is such that it smells because we're not fixing our own problems, then it will take years for it to unravel," he said.

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