Purging fraudulent impressions from the system would mean higher
media prices and lower performance (though more accurate). Fraud
pumps up publishers' traffic, exchanges get paid a percentage for
trading it, buying platforms' performance looks better because of
it, and agencies can bring those great results to clients. Everyone
Brands, of course, are aware fraud exists and price that into buys.
Meanwhile, they've moved on to shinier objects like "native" ads
and social media. The truth is, there's little incentive to fight
"I'm pissed," said Tom Phillips, CEO of Dstillery, a technology company that lets
buyers purchase programmatic ad inventory. "We're out there trying
to do it the right way and by comparison we're facing a prisoner's
dilemma against competitors who show great results from fraudulent
traffic," he said. "Anyone along the chain who is playing it
straight gets screwed."
What does it cost to go straight? Eric Franchi, co-founder of ad
network Undertone, said his company brought the
percentage of suspicious activity in its network down to the
3%-to-5% range by having fraud-detection companies Peer39 and Integral Ad Science monitor
its inventory. Each day, Undertone reviews the reports and removes
"A shoot first ask questions later approach," is how Mr. Franchi
described it. "Clearly if people are saying that 30% of the
impressions out there are fraudulent, there needs to be a lot more
companies taking these steps."
The process is expensive. The fraud-detection firms charge fees
based on the number of impressions monitored and Undertone eats the
Fraud flourishes in the opaque world of ad networks and exchanges,
where buyers often don't know the sites they're buying due to
agreements between exchanges and the publishers that supply
inventory. But Andrew Casale, VP-strategy at Casale Media, said fraud could be minimized
simply by showing buyers the top sites on which their programmatic
media dollars are spent.
"There's going to be a lot of questions raised if you start to
study the list," he said. "On the marketer end, everyone is saying
'I have no idea what I'm actually buying because I don't look at
because it's too big.' That's a convenient excuse but it can't
remain an excuse for long."
Curt Hecht, global chief revenue officer at the Weather Company,
said digital-ad buyers could make a difference by asking their
suppliers the right questions. Those include: How are the ads
procured? Where are they placed? Where will they run? Where won't
they run? Who are the different partners? And what do they do?
'Anyone along the chain who is playing it straight gets
Mr. Hecht described these questions as common sense, but they
assume the buyer wants the answer. If the price is right and the
performance is there, who cares?
Michael Tiffany, CEO of fraud detection firm White Ops, said
some fraud today is so egregious that the only way it can be
succeeding is because nobody cares. The more sophisticated fraud,
he said, presents challenges but is not unbeatable. "The IT staff
of ad-tech companies are just not built to be winning fights
against the world's best hackers," he said.
The lack of consequences is playing a major role. Harvard
professor and ad-fraud researcher Ben Edelman suggests making refunds for fraud
traffic a contractual obligation. "In practice right now, you
promise to deliver it, you don't quite deliver it, people shrug,
the world moves on," he said.
But even Mr. Edelman isn't sure that's workable. "I don't know
if they have the wherewithal, the backbone, the legal enforcement,
the lawyers frankly, to go and hound each other until they're all
honoring their respective promises to each other," he said.