Ad Industry's Self-Regulation Is an Exclusive Club, Says Watchdog

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A lesser-known nonprofit ad-industry watchdog says trade groups aren't working. The Online Trust Alliance, comprised of a wide array of members including Microsoft, Twitter, programmatic ad-tech company OpenX, digital publisher group Digital Content Next, security software firms and even the National Association of Realtors, has published a paper calling on the ad industry to be more inclusive and holistic in its self-regulatory approach to cleaning up ad fraud and staving off the threat of ad blocking on the ad-supported digital media ecosystem.

"I think we continue to fail to underestimate the consumer experience," said Craig Spiezle, executive director and president of OTA. The fact that consumers are adopting ad blockers, he said, is a direct result of this failure.

"The industry is paying the price today by people wanting to use ad blockers," he said.

He argues that industry trade groups such as the Interactive Advertising Bureau, Digital Advertising Alliance, the Trustworthy Accountability Group and recently created Coalition for Better Ads should do a better job of putting consumers at the forefront of their missions to develop ad standards, clean up fraud and implement privacy and security protection measures to preempt what could be more restrictive government regulations.

The OTA paper suggests that some industry self-regulatory moves are redundant and should be more comprehensive by tackling data collection rather than just ad targeting, for example.

"Unfortunately, to-date none are focusing on the holistic user perspective and there is little recognition of the urgency for making systemic changes for the overall good of the ecosystem. The issues must be addressed holistically and be inclusive of the user, security and privacy communities. Maximum success will be achieved by including all stakeholders with an emphasis on putting the consumer first. This pivot – from one of profit preservation/ maximization to a consumer-centric focus – is crucial to increasing trust and realizing the potential of the consumer-publisher-advertiser value exchange."

Mr. Spiezle also took umbrage with recently launched Coalition for Better Ads, which he suggested was yet another exclusive industry club. Not unlike the Digital Advertising Alliance, which runs the industry's ubiquitous Ad Choices program, the group is comprised of big name trade associations including American Association of Advertising Agencies, Association of National Advertisers, Digital Content Next, DMA, and IAB, along with media and advertiser giants such as Facebook, Google, GroupM, News Corp., Procter and Gamble and Unilever. The organization launched in September and aims to create "consumer-based, data-driven" ad standards, and implement and encourage awareness of them.

Asked whether OTA had attempted to join the coalition, Mr. Spiezle responded, "We don't have the funds for that," stating that he believed the membership fees were too high for his nonprofit to afford. He added, "We were never invited."

Meanwhile, ad-fraud protection is big business. Seattle-based startup Ad Lightning, headed by digital publishing vet Scott Moore as CEO, announced Tuesday it completed a $2 million seed financing round. The firm helps publishers reduce slow ad-load times and remove disruptive ad units that lead to consumer use of ad blockers. In September, ad-fraud-security tech company White Ops scored $20 million in a Series B funding round, bringing its total funding to $33 million.