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Google seeks greater transparency in digital advertising as the cost of ad fraud mounts (GOOGL, GOOG)
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Thousands if not millions of instances of a particular kind of ad fraud called 'spoofing' were detected in a recent test spearheaded by Google, Business Insider reports.
Spoofing is when ad buyers are duped into paying for counterfeit ad space — for example, purchasing supposedly 'premium' inventory on a small website that has minimal traffic — and it's facilitated by programmatic advertising because of the lack of transparency into who is selling what across various ad exchanges.
Publishers are seeing instances of spoofing on ad exchanges whom they aren't partnered with. During this tests, Google and other participating media companies turned off their programmatic inventory for 15 minutes. All the while, multiple ad exchanges were still offering inventory from these companies — inventory that wasn't even for sale at the time.
Ad fraud is a big concern to media buyers because of its large financial downside. Brands will waste an estimated $16.4 billion in ad spend this year because of fraud, and these losses could increase over time as investment into programmatic advertising climbs. BI Intelligence estimates programmatic ad spend will grow at a compound annual rate of 21% over the five years through 2020 to reach $38.5 billion by 2020.
However, there is a possible solution at hand that could help publishers and brands reduce spoofing. A solution called Ads.txt lets publishers clearly list who is and is not authorized to sell their ad inventory, by inserting a piece of code into their websites. This works similarly to how brands can whitelist certain publishers where their ads are allowed to run, except in this case publishers are designating certain ad exchanges and ad tech companies through which it's safe to buy inventory from. The success of this solution will hinge on how widely adopted it is by publishers and the diligence ad buyers have in purchasing inventory from authorized vendors.
Kevin Gallagher, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on ad tech that:
Forecasts US programmatic revenue through 2020.
Highlights the factors driving consolidation, and identifies new acquirers and attractive targets.
Explores the challenges ad tech companies face including the dominance of walled gardens, ad blocking and measurement.
Outlines emerging technologies that will help propel ad growth in the next decade.
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