Advertising Week 2014

ANA CEO: Advertisers Initially Surprised by Scope of Ad Fraud, Hesitant to Confront It

Marketers Had No Idea What Was Occurring, Then Denied the Problem's Extent

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Bob Liodice
Bob Liodice

Here's one reason the advertising industry has been slow to fight ad fraud: Until recently, advertisers had no clue what was happening. And, once they found out, there was little will to fight the problem.

As Advertising Week wrapped up last week, Bob Liodice, President-CEO of the Association of National Advertisers, admitted as much and described the effort to gain awareness of the problem as still ongoing.

"I was not aware," he said during the panel, recalling first hearing of the extent of the problem two years ago. "I kind of knew it was happening but I did not understand the size, the scale, the scope and how many other things that it was affecting."

When he brought the news to his board, Mr. Liodice said, "they kind of just sat and looked at me in disbelief with their mouths hanging open."

But the news did little to move them, at least initially. "When I started to deliver this to my board and we started to address this with our marketers, there was a little bit of a denial that this was really going on," he said. "But more importantly, there was, I'd say less of an urgency to move this forward."

Not only that, he said, there was "almost a lack of desire to take responsibility for leading the effort."

Mr. Liodice said digital advertising was looked at as a panacea at the time, a way to create two-way conversations with consumers and create a level of loyalty impossible to generate with other media. That dynamic made it difficult to raise the "black flag" and reveal all the bad going on behind the scenes.

"You don't want to be the guy that's spoiling the party," he said.

The industry is now introducing measures to deal with the problem -- the IAB, ANA and American Association of Advertising Agencies and came together last week to announce a new joint initiative to tackle ad fraud -- and Mr. Liodice said big change was both needed to fix it, and on the way.

"The existing supply chain in five years may look very different from what it looks like right now," said Mr. Liodice. "We cannot exist in the same format and the same structure over the next few years and expect to solve this problem."

After Mr. Liodice's remarks, Ad Age asked him what it would take to draw advertisers' attention to the problem.

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