Ad tech watchdog infuriates the industry with its damning programmatic reports—inside the battle

A routine ad tech practice involving cookie and ID matching—linking online data between publishers and advertisers to target ads—has turned into one of the most contentious digital debates, sparking a defining battle between the old and new guard of watchdogs in programmatic advertising. On one end is the new crop of independent watchdogs, such as Adalytics, and on the other end are industry stalwarts represented by trade groups, agencies and third-party vendor interests that typically view themselves as the guardians of the programmatic ecosystem. In the past year, Adalytics run by CEO Krzysztof Franaszek, has made it his crusade to identify some of the worst practices in ad tech. His sweeps of internet ad campaigns often find examples of badly placed ads, served in unscrupulous ways that should have been caught by the gatekeepers. Adalytics’ manifestos are now highly anticipated, feared for what they might expose next. See Ad Age’s Tech Power List honoring marketing leaders The reports often are meticulous documents with screenshots of digital ads and highlights of software code that claim to show the origin of an ad that took a bad turn through programmatic ad pipes. Critics of these reports have claimed they sometimes misunderstand the finer points of ad tech, and the conclusions overblow the actual scale of the problems. There also are advertising leaders who are concerned about Adalytics’ motives. Adalytics declined to comment for this story, but it claims to be independent and works with a select few brands to audit their programmatic campaigns. Last year, Adalytics took aim at Google, claiming to find instances of video ads running on questionable websites, when advertisers thought they were getting YouTube-quality inventory. Google particularly took issue with how Adalytics characterized what it found, and with the video report, Google said Adalytics made “extremely inaccurate claims.” Another Adalytics report on Google claimed to find irreputable search partners, sending ads from major brands, such as Procter & Gamble, to unsavory search pages run by foreign sites. Inappropriate ads, such as those promoting alcohol, appeared on search pages on children’s websites, too. Adalytics also put “Made for Advertising” sites on blast, finding major brands showing up on the low-quality sites, which are best known for their clickbait headlines and shoddy web experiences. With each report, Adalytics seemed to catch the digital ad industry in compromised positions that should have been neutralized by now. Also read: Why the ‘Made for Advertising’ crackdown isn’t working Adalytics’ takedowns have made some industry players uncomfortable. In fact, lines are being drawn, between its defenders and detractors. Another independent ad watchdog group, the nonprofit Check My Ads Institute run by Claire Atkin and Nandini Jammi, is often on LinkedIn siding with Adalytics. In fact, Adalytics’ latest report called out a little-known supply-side platform called Colossus, identifying the possibility that the SSP used junky IDs in internet ad auctions to win inventory at inflated values. The Adalytics report shined a light on a practice known as “mis-declared” IDs. It was a contentious report, but Check My Ads was clear about what side they were on. “I don’t know the folks at Colossus, and I don’t need to,” Jammi wrote on LinkedIn this week. “Their publicly available inventory tells me everything I need to know. They are just like every other SSP—and you know my No.1 rule about SSPs: they’re always lying to you.” That type of bravado, among the new school of ad tech watchdogs, is giving the old players fits. Adalytics’ defenders say its work shows it is still too easy to manipulate digital advertising among publishers, SSPs, DSPs, agencies and the third-party ad tech vendors, which are supposed to catch wrongdoing. The industry is still beset by invalid traffic, shady made for advertising websites and other supply chain troubles. In many ways, the Adalytics’ reports that started coming in waves last year embarrassed ad agencies and their vendors that were supposed to be the ultimate line of defense. And it’s clear that Adalytics has ruffled feathers, as one leader from an industry trade organization recently told Ad Age: “It’s just not how this is done.” One prominent foe of Adalytics, speaking on condition of anonymity, told Ad Age that they have several issues with its practices. They questioned Adalytics’ expertise and sensational claims, and they also took issue with Adalytics’ apparent unwillingness to engage with targets of its reports before publishing them to resolve them in good faith. Gotcha moments Instead of publicly shaming companies through sometimes questionable reports, which don’t always get the whole story, the industry considers itself to have a system, even if it is a self-regulating one. Third-party vendors are supposed to catch corrupt practices and report them to brands, so that discrepancies usually get resolved without a public airing. There are many in the industry who feel that Adalytics has identified legitimate problems but they disapprove of the tactics. “We’ve gotten into this gotcha moment to call out the flavor of the week,” said one media buying exec, who spoke on condition of anonymity, “but I don’t think it’s going to be helpful to the industry as a whole.” In the latest case raised by Adalytics, the relatively minor SSP Colossus was accused of using IDs in a manner that fooled demand-side platforms, such as The Trade Desk, leading advertisers to think they were matching with valuable ad targets when they weren’t. Colossus’s cookie flaws were outlined in an Adalytics report. The newfound influence of Adalytics has confounded many parts of the ad industry, when its reports identify SSPs, DSPs, ad agencies, platforms, brands and third-party measurement firms, and paint them as being asleep at the wheel of programmatic advertising. Read more: Inside Adalytics’ Colossus report Adalytics accused Colossus, the SSP that is part of publicly traded Direct Digital Holdings, of using “mis-declared” user IDs in winning ad auctions. “It can result in the targeting of individuals that do not fit the profile of the advertiser’s target audience,” Adalytics wrote in May. “In many circumstances, this can lead media buyers to bid and pay higher prices to serve ads to particular individuals.” Colossus has since sued Adalytics for defamation, and defenders of Colossus say there could be perfectly reasonable explanations for how it used cookies. Some critics of Adalytics are eagerly awaiting the lawsuit to play out, thinking it could lead to some transparency about how the group conducts its work and if there could be more to learn through the legal discovery process, one ad agency exec told Ad Age, speaking on condition of anonymity. What’s most interesting in all this circular blaming, though, is what it says about programmatic ad markets and the players in the space. There are many powerful brokers in ad tech who are critical of Adalytics and question its motives. Adalytics’ Franaszek has a background as an MD from Harvard University, a physician scientist in biotech, and now he runs the small ad tech watchdog out of Washington D.C. His reports have become must-reads that send the ad tech world scrambling. Behind closed doors, Adalytics’ detractors wonder how it picks its targets and about its motivations. Adalytics says it has no special backers that prod its independent work. Adalytics works with brands looking for wrongdoing in the supply chain. Ad Age spoke with more than a dozen ad tech experts, ad trade group leaders, and agencies, and most of them would only speak on condition of anonymity, fearful of weighing on sensitive industry subjects. “Something is just weird about what’s happening,” said one of the ad tech insiders. ‘Wasting our time’ When an Adalytics report drops, it sets off a now-familiar scramble, where ad agencies hear from brands asking how their third-party vendors didn’t catch the bad actors or misplaced ads. The agencies claim that the practices detailed in Adalytics reports are often overstated and the harm to ad campaigns is overblown. “So many of us spend so much time figuring out what is going on,” an ad agency insider told Ad Age, “then slowly we see the same pattern is emerging, and we’re wasting our time really.” With Colossus, Adalytics picked a smaller operation that also plays a key role in the digital ad supply chain. Colossus supporters have noted that it is one of the only Black-owned ad tech providers that brands work with as part of important DEI goals to increase parity in programmatic advertising. Colossus’ supporters also say it is unlikely to have intentionally done what Adalytics claimed about swapping cookies to manipulate ad transactions. The suggestion is that “Colossus is replacing IDs, their own IDs with other, better IDs to make it seem like their inventory is higher quality,” said Augustine Fou, a well-known ad tech researcher who manages a product called FouAnalytics that analyzes programmatic fraud. “It’s pretty hard to do this. And what several of us found very interesting is why suddenly the entire ecosystem was intent on claiming what Colossus did was fraud.” Fou has become an outspoken advocate for Colossus in its fight with Adalytics. “They started losing business,” Fou said. The Adalytics report looked at 16 SSPs and claimed that Colossus was the only one to consistently mismatch IDs through transactions with The Trade Desk, a claim Fou found hard to believe. The researcher claimed to run his own tests, too, that found Adalytics’ claims to be inaccurate—that other SSPs also mis-declared IDs at points. For Colossus, the damage was done though, and it was dropped by BidSwitch, the ID provider it used. The sides, however, appear to have made up, putting Colossus back in the programmatic marketplaces. “After a thorough technical investigation and testing of Colossus SSP traffic in a sandbox environment, we confirmed that Colossus SSP traffic met BidSwitch requirements and re-enabled trading,” BidSwitch said in a statement to Ad Age. “Our investigation also concluded that there were no issues found on BidSwitch’s side in relation to this incident. We have proceeded with re-enabling Colossus SSP trading via BidSwitch and have given current BidSwitch DSPs the option of resuming trading with Colossus SSP via BidSwitch.” Colossus had already been having issues with its programmatic practices before Adalytics outlined them in its report. Google identified low-quality traffic coming from a certain SSP last year, and penalized it, though it did not name Colossus specifically in an email statement to Ad Age when asked about whether it ever blocked Colossus. “Google has strict policies and robust enforcement systems to protect advertisers, publishers and people against invalid traffic," Google said in the email statement. “Late last year, our teams identified sources of invalid traffic that do not adhere to our guidance around how signals are shared in bid requests and took prompt action.” A person familiar with the action did say Google's DSP did pause some traffic from Colossus, though, and the issue was later resolved. This was before the Adalytics report, which shows how these matters can be handled discretely. More likely incompetence Ari Paparo, a popular ad tech influencer and entrepreneur, has written about Colossus, jumping into the rousing debate that has been happening on LinkedIn about Adalytics and the findings. Paparo looked at multiple possibilities for why Colossus IDs could have misfired, ranging from a bug to accident to outright fraud. “I don’t think there is any doubt that there was something going on with the way they were representing identity,” Paparo told Ad Age, “and the debate was between whether they were doing it on purpose.” “I made the claim that it was more likely to be incompetence than fraud,” Paparo said. Colossus declined to comment for this story, but its parent company Direct Digital Holdings has run into hard times as a publicly traded company. DDH recently was dropped by its auditor Marcum, and it was late filing its most recent quarterly report. The financial reporting issue does not appear connected to Adalytics. Adalytics critics say that the firm should undergo the same audits that it advocates for in the ad tech supply chain. The Media Rating Council, a measurement group that can analyze programmatic platforms, has said it would work with Adalytics. Some of Adalytics reports have called into question why the practices it uncovers don’t get detected by groups like MRC, and third-party ad verification firms such as IAS, DoubleVerify, Zefr and Moat. “Adalytics is a measurement vendor with which MRC does not have a formal audit relationship and as a result, MRC cannot comment on their process or methodology,” an MRC spokesperson told Ad Age in a statement. “Like any third-party vendor, MRC encourages Adalytics to formally submit their measurement services to independent MRC audit to be reviewed by our members that are potential users relying on this measurement.”

Ad tech watchdog infuriates the industry with its damning programmatic reports—inside the battle

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