ANA, White Ops say ad fraud is down, but pressing issues linger
The Association of National Advertisers and cybersecurity outfit White Ops made a bold claim Tuesday, saying ad fraud is going down while spending on digital advertising is going up.
The claim came in a report, titled Bot Baseline, that estimates advertisers will lose $5.8 billion due to ad fraud globally in 2019, down from $6.5 billion reported in 2017. “That 11 percent decline in two years is particularly impressive considering that digital ad spending increased by 25 percent between 2017 and 2019,” the report says.
Overall, it claims fraud attempts amount to 20 to 35 percent of all ad impressions throughout the year, but adds that the number getting through is now much smaller.
The news, delivered as marketers are attending the IAB’s Digital Content NewFronts in New York City, provides a rosy outlook regarding advertising’s most expensive problem—but larger, industry-wide issues remain.
Criminals go where the money is and that means video is most prone to ad fraud. As a result, the ANA and White Ops are urging marketers and publishers through their report to start using VAST 4.1, which is a video-serving template released in 2018 that makes finding problems such as fraud easier. The issue, however, is an overwhelming number of marketers and publishers are using a much older version of the software (VAST 2.0)—one that debuted nearly a decade ago and is more prone to ad fraud. The reason why isn’t clear.
Agencies, for example, will often argue that it’s publishers who do not want to use the most recent version of VAST. “They don’t like it because we will discover more fraud and viewability issues,” says one high-level, holding-company exec, who asked to remain anonymous to protect industry relationships.
At the same time, some publishers say advertisers are the problem. “We have yet to receive a single request from any advertiser on VAST 4.1 support,” one executive from a major publisher says.
Trade bodies such as the 4A’s, ANA and IAB have been clamoring for marketers to adopt VAST 4.1 since its release. There are no official metrics regarding adoption rates, but the industry consensus is that far too many are using outdated technology.
“A shockingly high amount of video is still be sold through VAST 2.0, and that came out nine years ago,” says Michael Tiffany, cofounder and president at White Ops. “There are larger threats in fraud and we need to get the industry prepared for the next generation of criminals.”
Some within the industry feel that the figure White Ops cites in its new report would be much higher had the entire industry adopted the latest version of VAST. Tiffany disputes that.
“I’m confident at the present time that our numbers aren’t skewed by these limitations,” he says. “We are in the business of fraud detection.”
Tiffany argues that the fight against fraud is likely to be lost should the industry fail to adopt industry standards such as the latest version of VAST.
Why White Ops’ number might seem low
The methodology White Ops used in coming up with its latest ad-fraud figure is certainly subject to scrutiny, which may not be immediate.
In 2017, for instance, White Ops’ highly publicized report on MethBot claimed that some $3 million to $5 million dollars was being plundered from advertisers each day for nearly two months (some questioned that figure). Roughly two years later, however, it was revealed that at its peak, MethBot made roughly $50,000 on its best day.
In the example above, White Ops counted the number of times it detected MethBot and then multiplied it by high-CPM averages to come up with what was essentially a worst-case-scenario figure.
What makes the company’s most recent report with the ANA different is that White Ops says it only counted fraud that actually went through. It then accounted for what the ad actually cost rather than using a high-CPM average.
“That’s why you’re seeing a lower number,” Tiffany says. “What made our studies better is we worked with the ANA members and viewed their actual media plans.”
Overall, some 50 ANA members participated in the study, and roughly 27 billion impressions were measured by White Ops in gathering its data, the company says.