By Keri Thomas, Performance Media Director and Olivia McKinsey, Director of Performance Analytics

In June 2023, the Association of National Advertisers (ANA) released a programmatic transparency study that concluded that as much as 23% of the open web programmatic media ecosystem is wasted. In other words, $20 billion (about $62 per person in the US) of advertiser budgets was invested in low-quality, clickbait inventory.

According to NOAA, meteorologists have an accuracy rate of 80% over a 7-day forecast. That’s right. You read that correctly. The weather is more accurate than the open programmatic marketplaces.

All advertising channels are susceptible to waste. Afterall, John Wannamaker famously said he did not know which 50% of his budget was working. The age of digital was supposed to change with the ability to measure everything. We now know that is not the case.

Nowhere do we see this playing out more than in Connected TV (CTV) which is particularly attractive to fraudsters due to it being a budding channel with low transparency, lack of industry standards, and higher CPMs. In fact, the demand for CTV inventory far exceeds the supply of real inventory which has incentivized fraudsters to fabricate traffic through fake devices and apps. Fraudsters were even caught last year spoofing smart refrigerators to pass off as CTV devices.

As a result, many agencies partner with ad fraud verification companies to protect themselves from exposure to ad fraud. The largest ad fraud verification companies and the industry group Trustworthy Accountability Group (TAG) consistently report 1-2% ad fraud rates or lower. That is a variance of more than 20% when compared to the ANA study. So, who is right?

The answer lies in the approach to identifying fraudulent activities. The nature of ad fraud has changed over the years, and it is no longer simple bot traffic. Fraudsters are smart and are much more likely to be using sophisticated schemes, website setups, and site masking to bypass fraud detection efforts. Fraud verification companies often miss the SIVT (Sophisticated invalid traffic) activities like fake sites/apps and fake devices. Proof in point, Gannett provided inaccurate URL information in ad auctions for 9 months even though 15 AdTech technologies could have detected it.

Iris has found that relying on standardized systems is not enough. The Iris team has tested several leading fraud verification companies and have discovered:

• Measured rates of ad fraud did not change when utilizing costly pre-bid inventory controls vs not using any pre-bid controls at all.

• Platforms report significant impressions (apps & websites) listed as ‘Unknown’ & or masked under syndication services (i.e., googlesyndication.com) but consider them to be free from ad fraud.

A more hands-on, analytics-based approach is needed to protect our clients against ad fraud. As a result, we have developed an evaluation method that incorporates our five pillars of programmatic health. We have found that by maximizing scores across these five pillars, we are able to protect the brand at every stage of the conversion funnel. Whether trying to increase brand awareness, drive brand consideration or drive incremental lift in sales this evaluation is necessary to guarantee success.

Transparency

Buying media programmatically often means there is a lack of transparency necessary to determine where your ads ran. In analyzing traffic source reports, we frequently see aggregated traffic listed under values like “googlesyndcation.com,” “Low Volume Inventory” and “Tail Aggregate.” Without transparency, delivery cannot be verified, leaving the brand open to fraud and rampant brand safety issues.

Authentic Inventory + Actions

Most ad campaigns are designed to improve business results like leads, quotes, or sales. Iris has found that focusing solely on media inventory metrics like impressions, clicks or video views is the easiest way to engage more bots instead of real people. Bots are happy to be served impressions so that they can click or view videos, but they will not be making purchases or entering the sales funnel as a lead.

Additionally, a recent study released by Adalytics found that even on major players like YouTube, brands “ultimately spent on small, muted, out-stream, auto-playing or interstitial video ad units running on independent websites and mobile apps.”

Viewable

Viewability is a mandatory requirement for an effective ad campaign. If an ad was not viewable, did it really drive the consumer to respond? While the Media Rating Council (MRC’s) definition of viewability is a start, it is not enough to drive ad recall performance. A 2015 study by IPG Media Lab found the length of time an ad was viewable was the key factor in driving ad recall. Viewability impacts all funnel level Key Performance Indicators (KPIs) – from awareness & brand lift to ROAS (Return on Ad Spend). In fact, you can expect about 11% higher ROAS without changes.

Identifying viewable inventory due to environmental factors (such as site design, ad location, ad stacking, etc.) must be considered to drive the results needed.

Brand Safety

In 2023, brand safety is about more than just sensitive categories & social topics.  Brand Safety is about diligently protecting your brand’s values online to build consumer brand trust. The world is different now than just a few years ago and brands are deeply concerned about how the political, social, and environmental landscape will affect their brand. In a larger context, brand safety is also about following the ownership of websites & apps to ensure the result is in line with the desired outcome. Even “everyday sites/apps” like Weather Nation can be traced to disinformation outlets, meaning that a cursory glance of a programmatic placement list will miss this kind of nuance.

Quality Content

Finally, the last thing we look for is quality content and ad placement. Those are sites written by real people in an environment free from excessive ad clutter. In other words, not Made for Advertising (MFA) sites. If words like “clickbait” come to mind as you’re browsing a site, it’s probably MFA. In the ANA study previously referenced, MFA sites accounted for an estimated 21% of impressions and 15% of ad spend. How much money does that represent in your campaigns?

Not only are these kinds of websites frequently visited by bots, but they have huge carbon footprints for the number of calls made to servers. Ebquity & Scope3 calculated the CO2 emissions per 1000 impressions and found that emissions were 26.4% higher on MFA sites than on regular websites.

Still need convincing?

The news doesn’t stop there. The trickle-down effect is that by ignoring these issues cost based KPIs are significantly impacted. According to an Optiks Security study, Customer Acquisition Costs (CAC) & ROAS (Return on Ad Spend) were both reduced by significant margins – 9% & 11%, respectively.

As the marketplace continues to evolve, so will the fraudsters. The smarter mouse is here. Are you using a smarter mousetrap?