Tag Archives: IAB

Fraud and the Lack of Transparency. What Actions are you Taking?

26 Jan

fraudsterReflecting at the end of 2022 there were two articles that piqued my interest (links below). The articles dealt with two issues that have plagued the ad industry for years now… the monetary impact of ad fraud and the lack of transparency surrounding programmatic digital media. According to Nick Swimer, an Entertainment and Media Partner at Reed Smith, LLP; “The lack of transparency is costing businesses millions and driving false impressions, which in turn is undermining trust in the industry.”

Advertisers, on the whole, currently invest more than half of their budgets in digital media. A high percentage of this activity is purchased programmatically. Based upon a review of these articles, the monetary impact and attendant risks faced by advertisers in this area are eye-opening. This is on the heels of the 2020 study by the ISBA and PwC which found that only 51% of spending in this area made it to publishers. Of the remaining 49% balance, 15% of total advertiser spend could not even be tracked or attributed.

Given the economic climate and the negative impact on marketing budgets, it is natural to wonder why there isn’t a greater proclivity for action on this front among marketers.

Support for industry trade associations such as the ANA, IAB, and their key initiatives (i.e., Trustworthy Accountability Group (TAG), regulatory outreach and lobbying efforts, etc.) are important steps in this area that will yield results for marketers over the long haul. However, immediate action is required if marketers want to safeguard their investments sooner than later.

Near-term, there are a few key steps that marketers can take to mitigate the negative economic impact that fraud and non-transparency related risks can have on their budgets:

  1. Update media agency contracts to secure comprehensive audit rights, establish a principal-agent relationship and clarify expectations regarding the agency’s fiduciary responsibilities.
  2. Conduct periodic contract compliance, financial management, and performance audits of media agencies.
  3. Assess and tighten media controls including Media Authorization Form language, Buying Guidelines, campaign monitoring and post-buy reporting, agency-generated third-party vendor insertion order language, and client sign-off requirements before using agency affiliates or Inventory Media buys.

Too much time has elapsed since these issues originally surfaced. And while there has been much talk about corrective measures, these trends have continued unabated. It feels as though now is the time for action, not indifference. What do you think?

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Time for Advertisers to Reach Out to the Regulators

26 Oct

Like many business segments, the ad industry has never been one to welcome government involvement when it comes to policing itself, and perhaps rightly so. That said, now may be the time to embrace the regulators.

Why? Simply put, digital advertising fraud is out-of-control. In a recent article in Campaign U.S. author Alison Weissbrot shared the results of a recent study by ad verification company Cheq and Professor Roberto Cavazos of the University of Baltimore suggesting that U.S. advertisers will lose $35.0 billion to ad fraud in 2020. In a sector that represents $333.0 billion in annual spend this means that ten cents of every dollar spent by digital advertisers is siphoned off the top by fraudsters. For perspective, the author cites the fact that this level of fraud is greater than that impacting the $3.32 trillion credit card industry. And the problem is not limited to the U.S. alone. Consider the finding from Juniper Research’s 2019 report on advertising fraud, which indicated that globally lost $42.0 billion to digital ad fraud last year.

Renowned fraud investigator, Dr. Augustine Fou once commented that, “ad fraud is more lucrative than tax fraud, counterfeiting goods or being a Somali pirate.” Adding credence to the increasing role of organized crime and criminal nation states in digital ad fraud, The World Federation of Advertisers (WFA) recently stated that “fraudulent internet advertising schemes will become the second-largest market for criminal organizations.”

For all of its well-intended efforts, the advertising industry has been unable to effectively counter this growing threat. Thus, it may be time for The World Federation of Advertisers, the Association of National Advertisers, the 4A’s, the IAB and their members to reach out to lawmakers and regulators to join in a coordinated effort to uncover ad fraud at its root and to develop more effective means of enforcement to both deter and punish the criminal organizations perpetrating the fraud. The 18thcentury French social commentator, Montesquieu once said that; “there are means to prevent crime – its punishment.” Combining the expertise of the ad industry with the regulatory and enforcement capabilities of lawmakers makes good sense.

The problem of ad fraud is not abating. With the expanded use of technologies such as programmatic buying and artificial intelligence and the complex, often non-transparent nature of the advertising supply chain, the risk of fraud remains high, threatening not only digital ad spend but emerging media sectors such as mobile and connected television as well. 

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When it Comes to Programmatic Digital the “Same-Old, Same-Old” Isn’t Working

26 Feb

EinsteinMedia’s murky supply chain, wrought by fraud and congested with too many intermediaries between advertisers and publishers, continues to serve up challenges for digital media advertisers.

The fraudsters at it again with a devious approach to separating advertisers from their media spend. As if digital ad fraud practices including fake devices, fake locations, fake impressions and fake consent strings weren’t enough, the media industry now has to deal with a sophisticated domain spoofing bot.

According to an article in The Drum, fraudsters have now launched bot networks to evade ads.text protections, which was introduced by the IAB to allow publishers to “list authorized sellers” of their inventory. Both DoubleVerify and Integrated Ad Science (IAS) have unearthed fraudulent activity using 404bots, which employ domain spoofing techniques that misrepresent URLs, making buyers “believe that they are getting valid inventory, when in fact it does not exist.” IAS suggests that more than 1.5 billion ads have been impacted since September of 2019.

When will it end? Likely never. Ad fraud is to lucrative and too difficult to detect, creating a literal gold mine for fraudsters. In fact, the World Federation of Advertisers (WFA) estimates that “over the next 10 years, the global cost of ad fraud is projected to rise to $50 billion. The best defense for advertisers according to Shawn Lim, author of the aforementioned article, is “Brands and publishers need to work with transparent supply chains, reputable supply partners, and know what ads are appearing – and where.”

If you’re an advertiser, you would be right to pose the question; “Who has my back?” For all of the money invested by digital advertisers in specialist agency support, fraud detection services and brand safety tools, who is safeguard their funds? It seems as though the only thing advertisers have to show, for the promise of efficiency that was ushered in by programmatic digital media, is suppressed working media ratios.

The risks continue to mount as the amount spent on digital media in the U.S. is approximately $79 billion, with 85% of the total transacted programmatically (source: Interactive Advertising Bureau, February 2020). eMarketer estimates that advertisers spent 38% of their non-social programmatic display budgets on programmatic fees in 2019, a 20% increase over the prior year.

As one example of the congested digital media ecosystem, Danny Khatib, CEO of Granite Media wrote an excellent article in AdExchanger illustrating the inefficiency of the programmatic digital media supply-chain. Entitled; “Can We Please Reduce This Link In The Programmatic Chain Already?” the article advocates for consolidation between the DSPs and SSPs, long thought to function respectively as buyer and seller advocates, with “each taking a 15-20% cut and confusing the heck out of the web ecosystem in the process.” According to Mr. Khatib, “there really shouldn’t be a traditional SSP business separate from a DSP business – that distinction no longer makes sense, if it ever did.”

No wonder advertisers have stepped up compliance and performance audits of their suppliers and have heartily begun to embrace supply-chain optimization. The madness has to end and fueling investments in specialist agencies and adtech solutions is simply not achieving the desired result.

 “Insanity: Doing the same thing over and over again and expecting different results.”          

~Albert Einstein

 

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It’s Only Money…

5 Jun

digital mediaThere was one particularly startling revelation that came from the ANA’s recent Agency Financial Management conference in San Diego. During the presentation of this year’s “Agency Compensation Trends” survey results it was noted that the ANA found that almost half of the members it surveyed had not reviewed the findings of the ANA’s 2016 Transparency study.

Think about that. If an organization did not review the Transparency study’s findings, that means that there must not have been any resulting internal dialog with or among marketing’s C-Suite peers, no direct interaction with their agency network partners, no review of existing Client/Agency contracts, no improvements in reporting and controls in which to illuminate how an advertiser’s funds are being managed.

This, in spite of the level of trade media coverage regarding transparency issues ranging from rebates, discounts and media arbitrage, to the Department of Justice investigation into potential ad agency bid rigging practices or the level of ad fraud, traffic sourcing or non-disclosed programmatic fees on both the demand and sell side of the ledger.

There is only one conclusion that can be drawn from this remarkable revelation…many marketers simply don’t care how their organization’s advertising investment is being allocated or safeguarded. Unfortunately, we regularly see the ramifications of this attitude of indifference in our contract compliance audit practice:

  • Client / Agency agreements that haven’t been reviewed or updated in years
  • Failure among clients to enact their contractual audit rights with key agency partners
  • Limited controls regarding an agency’s use and or disclosure of its use of affiliates
  • No requirement for agency partners to competitively bid third-party and affiliate vendors
  • Lack of communication to media sellers regarding ad viewability standards
  • Failure to assert an advertiser’s position on not paying for fraudulent and non-human traffic
  • No requirement for publishers to disclose the use of sourced-traffic
  • Incomplete instructions on buy authorizations to media vendors, minimizing or blocking restitution opportunities
  • Poorly constructed media post-buy reconciliation formats that lack comprehensive information and insights

Interestingly, there have been many positive developments from key industry associations such as the ANA, 4A’s, IAB and public assertions from leading marketers such as P&G and L’Oréal to further inform and motivate marketers on the topic of transparency accountability. Yet, given the materiality of an organization’s marketing spend and the publicized risks to the optimization of its advertising investment, many organizations have not yet taken action, tolerating the risks associated with the status quo. As the noted British playwright, W. Somerset Maugham once said:

“Tolerance is another word for indifference.”

The failure to proactively embrace transparency accountability can pose perilous risks to an organization’s marketing budget which in turn directly impacts its company’s revenue. Many would rightly suggest needlessly.

In these instances, the fault for the increased level of attendant financial risk, fraud and working media inefficiencies lies squarely with those companies that have adopted an attitude of indifference toward these very real proven threats. One cannot blame an ad agency, production house, tech provider, publisher or media re-seller for taking advantage of the status quo and acting in manners that, while not in the best interest of the advertiser, are not expressly contractually prohibited.

The good news is that advertisers can address these issues head-on in a quick and efficient manner, mitigating the risks posed by transparency deficiencies. It all begins with a review of existing Client/Agency contracts and engaging one’s agency partners in dialog regarding the adoption of industry best practice contract language to facilitate an open, principal-agent relationship. The Association of National Advertisers (ANA) has a wealth of information on this topic and can also recommend external specialists to assist an advertiser with agency contract development and or compliance auditing.

Interested in safeguarding your marketing investment? Contact Cliff Campeau, Principal at AARM | Advertising Audit & Risk Management at [email protected] for a no-obligation consultation on this topic.

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What if You Discovered That Your Digital Dollar Netted You a Dime’s Worth of Digital Media?

12 Feb

dreamstime_xs_2601647In 2014, the World Federation of Advertisers conducted a study which demonstrated that “only fifty-four cents of every media dollar in programmatic digital media buying” goes to the publisher, with the balance being divvied up by agency trading desks, DSPs and ad networks.

Fast forward to the spring of 2016 and a study by Technology Business Research (TBR) suggested that “only 40% of digital buys are going to working media.” TBR reported that 29% went to fund agency services and 31% to cover the cost of technology used to process those buys.

Where does the money go? For programmatic digital media, the advertiser’s dollar is spread across the following agents and platforms:

  • Agency campaign management fees
  • Technology fees (DMP, DSP, Adserving)
  • Data/Audience Targeting fees
  • Ad blocking pre/post
  • Verification (target delivery, ad fraud, brand safety)
  • Pre-bid & post-bid evaluation fees

It should be noted that the fees paid to the above providers are exclusive of fees and mark-ups added by SSPs, exchanges or publishers that are blind to both ad agencies and advertisers. What? That is correct. Given the complex nature of the digital ecosystem, impression level costs can be easily camouflaged by DSPs and SSPs. Thus, most advertisers (and their agencies) do not have a line-of-sight into true working media levels…even if they employ a cost-disclosed programmatic buying model (which is rare).

Take for example the fact that a large preponderance of programmatic digital media is placed on a real-time bidding or RTB basis, and a majority of that, is executed using a second-price auction methodology. With second-price auctions, the portion of the transaction that occurs between a buyer’s bid and when the clearing price is executed without advertiser or agency visibility, thus allowing exchanges to apply clearing or bid management fees and mark-ups as they see fit. So for example, if two advertisers place a bid for inventory, one at $20 per thousand and the other at $15 per thousand, the advertiser who placed the higher bid of $20 would win, but the “sale price” would be only one-cent more than the next highest bid, or $15.01. However, advertisers are charged the “cleared price,” (could be as high as $20 in this example) which is determined after the exchange applies clearing or bid management fees. How much you ask? Only the exchanges know and this is information not readily shared.

Earlier this month Digiday ran an article entitled, “We Go Straight to the Publisher: Advertisers Beware of SSPs Arbitraging Media” which profiled a practice used by supply-side platforms (SSPs) that “misrepresent themselves.” How? By “reselling inventory and misstating which publishers they represent.” The net effect of this practice allow the exchanges an opportunity to “repackage and resell inventory” that they don’t actually have access to for publishers that they don’t have a relationship with.

Let’s look beyond programmatic digital media. Consider the findings from a Morgan Stanley analyst, reported in a New York Times article in early 2016 that stated that, “In the first quarter of 2016, 85 cents of every new dollar spent in online advertising will go to Google or Facebook.” What is significant here is that until very recently, these two entities have self-reported their performance, failing to embrace independent, industry accredited resources to verify their audience delivery numbers.  

The pitfalls of publisher self-reporting came to light this past fall when Facebook was found to have vastly overstated video viewing metric to advertisers for a period of two years between 60% and 80%.  

By the time one factors in the impact of fraud and non-human viewing, and or inventory that doesn’t adhere to digital media buying guidelines and viewability standards, it’s easy to understand the real risk to advertisers and the further dilution of their digital working media investment.

Advertisers have every right to wonder what exactly is going on with their digital media spend, why the process is so opaque and why the pace of industry progress to remedy these concerns has seemingly been so slow. Sadly, in spite of the leadership efforts of the Association of National Advertisers (ANA), The World Federation of Advertisers (WFA), The ISBA, The Association of Canadian Advertisers and the Interactive Advertising Bureau (IAB) there is still much work to be done.

The question that we have continually raised is, “With advertisers continuing to allocate an ever increasing level of their media share-of-wallet to digital, where is the impetus for change?” After all, in spite of all of the known risks and the lack of transparency, the inflow of ad dollars has been nothing short of spectacular. According to eMarketer, digital media spend in the U.S. alone for 2016 eclipsed $72 billion and accounted for 37% of total media spending.

There are steps that advertisers can take to both safeguard and optimize their digital media investment. Interested in learn more? Contact Cliff Campeau, Principal of AARM | Advertising Audit & Risk Management at [email protected] for a complimentary consultation. After all, as Warren Buffett once said:

“Risk comes from not knowing what you’re doing.”

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Here We Go Again…

5 Jul

mobilityIs the ad industry about to make the same mistake with mobile as it did with digital? Early on in the platform’s development, it would appear so.

On a positive note, according to new figures from eMarketer, mobile ad spending will surpass $100 billion in spending in 2016, accounting for more than 50% of all digital ad expenditures.

However, there are challenges that need to be addressed. Chiefly, there are a lack of uniform viewability and audience measurement standards in place to validate publisher performance. Today, different publishers utilize a variety of different methods for counting impressions. The key point of contention with mobile is whether or not the publisher delivers on ads rendered or fully loaded as opposed to ad calls.

According to the Media Rating Council, which issued their “mobile viewable ad impression measurement guidelines” this past spring “Each valid viewable impression originates from a valid rendered mobile served impression. In no case should viewable impressions exceed render mobile served impressions counted on a campaign.”

When you look at the numbers, the waste factor in mobile advertising is alarming. In a recent article by Allison Schiff on Adexchanger, entitled; “The Buy Side Doesn’t Want Impressions Counted Before They Hatch” mobile ad server, Medialets, suggested that in a review of “2.7 billion impressions across its mobile ad server” that it found that “roughly 20% of ad calls on the mobile web were “wasted,” aka they don’t ever fully render on a device.”

Concerns over ad delivery and measurement issues related to mobile sound all to familiar to the growing pains suffered by advertisers with online display advertising served to desktop devices. Add in the newness and complexity of the segment, and advertisers would be foolish not to be mindful about their investment in this area.

In the near-term, the best path forward for advertisers to take is to enforce an ad rendered versus ad called verification approach, establish minimum viewability thresholds and utilize only MRC accredited vendors that are willing to adhere to industry standards. It should be noted that while the Interactive Advertising Bureau (IAB) established a 70% viewability threshold for measured impressions in 2015 many mobile platforms are “guaranteeing” viewability levels as high as 100%.

When you consider that according to eMarketer, over 31 million U.S. internet users will only go online using a mobile device in 2016, it is clear that the segments potential is high. Let’s hope that the learning curve is not as steep as the adoption path.

 

 

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Advertisers Can Shield Themselves From Digital Ad Fraud… Somewhat

19 Jan

Fraud PuzzleLet’s set the stage, so that we are all clear on the risks faced by advertisers when it comes to digital media in general and programmatic digital media buying in particular. Consider the following quote from Bob Liodice, President and CEO of the Association of National Advertisers (ANA):

“The level of criminal, non-human traffic literally robbing marketers’ brand-building investments is a travesty. The staggering financial losses and the lack of real, tangible progress at mitigating fraud highlights the importance of the industry’s Trustworthy Accountability Group in fighting this war. It also underscores the need for the entire marketing ecosystem to manage their media investments with far greater discipline and control against a backdrop of increasingly sophisticated fraudsters.”

What prompted Mr. Liodice’s comments? Quite simply, the ANA and White Ops updated their 2015 “BOT Baseline: Fraud in Digital Advertising” study, which suggested that the ad industry would see $6.3 billion in digital ad fraud in 2015. In light of the fact that the Interactive Advertising Bureau (IAB) reported that digital ad revenue surged almost twenty-percent through the first half of last year, can we be surprised by the fact that the level of fraud escalated as well. To what, you ask. According to the ANA report, it is estimated that the level of digital ad fraud will grow to $7.2 billion in 2016.

The challenge for individual advertisers is to determine how best to insulate their organizations from digital ad fraud, while continuing to support industry initiatives focused on the same end.

For many advertisers the question is quite simply; “But where do we begin?” The answer as the late Stephen Covey once intoned is to; “Begin with the end in mind.” So what is the end goal? For most advertisers the aim is to focus digital media investment on media sources that can reliably drive the highest level of effectiveness using the best quality inventory at the lowest possible price.

One important component of this challenge is obviously the continued growth of programmatic digital media buying. It should be noted that of the estimated $60 billion in digital media spend, programmatic will account for $15 billion or 25% of the total spend. However, one must consider that programmatic buying represents a very high percentage of digital ad fraud, up to 90% according to some industry experts.

The range of tactics employed by entities and individuals seeking to profit from the growth of digital spending are many and varied, they include; click-fraud, the use of BOTs, hidden ads and impression laundering. However, the primary source of digital media fraud is in the form of URL masking, which makes it impossible for advertisers or their agencies to know where their digital ads are running. Studies have shown that nearly 45% of transactional digital URLs do not match the URL where the impressions were actually served… a sobering statistic to be sure.

In our experience there are three things that advertisers can do to mitigate the level of risk posed by fraudsters.

First and foremost, advertisers must improve the level of transparency between their programmatic buying partner and their own organization. This can be done by employing contractual language and controls which narrow the transparency gap that more than likely exists today. Too often, agencies simply introduce their trading desk operation to their clients, without amending their current agreement or allowing the advertiser to contract directly with the trading desk entity.

Contract language should provide limitations on the percentage of total digital media spending that can be allocated to programmatic and impart clear “signing authority” guidelines in the event those levels are to be altered. Additionally, the agency should be required to provide a staffing plan, which includes data scientists and data analysts, along with the team’s estimated utilization rates and hours by individual. Complement this by incorporating copies of the media verification and performance tracking reports that will be utilized to monitor impression delivery, ad viewability and fraud detection. Finally, we suggest requiring the agency to separate the costs for media, data and technology licensing from agency fees, each of which should be reconciled to actual.

The second line of defense for advertisers comes in the form of requiring their programmatic media buying partners to utilize a Media Rating Council (MRC) accredited digital technology/ platform provider. Firms such as Integral Ad Science and Double Verify, for example, have a range of tools that can integrate with pre-bid platforms to provide real-time impression authentication to improve the odds that an advertisers impressions will be delivered in a contextually relevant, brand safe and fraud free environment. When nefarious behavior is identified, these tools can block impressions from being delivered there and dynamically blacklist those sites. In addition, there are tech solutions now available, which can assess inventory hygiene within ad networks and exchanges, allowing advertisers to target higher quality impressions.

Finally, advertisers must apply their buy-side leverage and demand that their agency partners and third-party vendors work collaboratively to optimize their digital media investment. Those parties that cannot demonstrate that they are continuously improving their tools, methodologies and compliance monitoring processes should be dropped from consideration set. Voting with one’s dollar has always been and remains one of the best ways to incent the behavior and secure the types of results that diligent advertisers deserve.  

In the words of Samuel Johnson, the celebrated eighteenth century English writer:

“What we hope ever to do with ease, we must learn first to do with diligence.”

 

 

 

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What if Advertisers Suspended All Digital Media Spend?

23 Jul

committeeSound preposterous? Perhaps not when you consider how much of an advertiser’s investment is siphoned off by digital fraudsters and criminals. One has to wonder if the efficacy of a reallocated media mix would really hamper in-market performance.

Let’s face it, in spite of the incessant level of press coverage, advertiser, agency and publisher posturing and the formation of numerous industry task forces, digital ad fraud has continued unabated.

In March of 2014 the IAB estimated that approximately 36% of all web traffic was fake, the result of bots. In December of 2014 a joint study by the ANA and White Ops, an ad security firm, estimated that digital fraud accounted for $6.3 billion out of a total estimated spend of $48 billion.

Various other studies have suggested that up to 50% of publisher traffic is bot related and that somewhere between 3% and 31% of programmatically bought ad impressions were from bots. During December of 2014 there was a research study done on FT.com which revealed that “in a single month, 72% of the ad impressions offered on open ad exchanges as being on FT.com were fraudulent.” The impressions were from sites pretending to be the FT and the ads appeared only on sites viewed by bots.

Ironically, in spite of the financial impact of these crimes, advertisers continue to spend an increasing percentage of their marketing budgets on digital media. According to Strategy Analytics, digital media will reach $52.8 billion in U.S. ad spending in 2015, accounting for 28% of every dollar spent, second only to TV. Further, while every other medium is either losing revenue or seeing low single digit growth, digital is anticipated to grow at 10% to 13% per annum over the next three years.

There are a number of industry stakeholders benefiting from the meteoric growth in digital spending, publishers, ad tech providers and agencies to name a few. For example, the major ad agency holding companies have seen revenues from digital media grow to represent up to 50% of their annual revenue base.

Thus it was with a slightly cynical eye that I viewed the recent press release from the Trustworthy Accountability Group (TAG) regarding their latest initiative to combat digital ad fraud. The focus of the release was straightforward enough, dealing with working to minimize “illegitimate and non-human ad traffic originating from data centers.” However, in the end it was about Google lending the group its blacklist of suspicious data center IP addresses for use in a pilot program.

As most industry participants know, TAG is the joint effort of the ANA, 4A’s and IAB launched in 2014 to work collaboratively with companies in the digital advertising space to combat ad fraud. While supportive of industry stakeholders teaming up to address key issues, one wonders how likely it is that TAG will be able to mitigate advertiser financial risks in the near-term.

Curiously, on July 23rd the 4A’s announced the formation of a committee that will focus on addressing “issues related to the digital supply chain.” Their press release pointed out that the newly formed committee will work closely with “other 4A’s committees and task forces, such as the Media Measurement, Data Management and Mobile committees, on policies and best practices.”

Have any of the existing task forces’ yet demonstrated tangible evidence of progress being made to combat digital fraud? It is difficult to imagine how the formation of yet another committee is going to make a difference. Do the organizations forming these ad hoc groups feel that the industry is so superficial and shallow that the news of a new committee will help advertisers feel better about the lack of measurable progress being made on this front?

If the industry doesn’t make concrete progress in the near-term, there is a strong likelihood that we will be welcoming a new “alliance partner” to the team… regulators. We know that historically business in general and the ad industry in particular have never been fans of government involvement. However, if the industry’s self-regulatory approach doesn’t begin to yield results, Washington will assert itself and they should, advertisers are literally being robbed. This is white collar crime at the highest level when you consider that in the U.S. alone, $6.3 billion is being siphoned off by bad actors on an annual basis, 13% of total spending in this specific area.

While the industry struggles to bring order to the chaos surrounding digital media advertisers might rightly ask the question; “Does it really make sense to continue to allocate hard earned dollars to a medium with the audience delivery and viewability issues that currently plague digital?”

What if advertisers were to place a moratorium on digital ad spending until more concrete actions are taken by the industry to protect their investment?

An extreme position? Yes. Unlikely? No doubt. However, this is the type of dramatic action required to force reform and provide advertisers with the transparency and controls required to yield satisfactory returns on their digital media investment. If nothing changes, every incremental dollar invested in digital media will continue to line the pockets of the tech-driven criminals which are preying on advertisers. In turn, this rapidly growing revenue stream allows fraudsters to expand their capabilities at an even quicker rate than those trying to police them creating a “no win” situation for the industry.

From this writer’s perspective, while industry task forces and committees can play a role in furthering the dialog, they will not suffice. Traditional outcomes from these groups include recommended best practices, guidelines, advisory white papers and the formation of new committees to continue the fight… hardly enough to strike fear in the hearts of digital criminals.

In the words of noted businessman Ross Perot:

“If you see a snake, just kill it – don’t appoint a committee on snakes.”

 

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Progressing Toward a Viewable Impression Standard

1 Feb

digital media viewabilityAs we have learned in both business and politics, “declaring” victory and actually earning one can represent two different positions on the continuum of success. That said, the news on Friday is that the ANA, 4A’s and IAB have agreed that viewable impressions will ultimately be the method for assessing digital media efficacy… not click-through.

Clearly, this is a positive first step toward reform in digital ad campaign measurement. However, much work remains to be done in addressing concerns over the variety of measurement services and the accuracy of their respective methods for assessing viewable impressions.

Several years ago, the aforementioned trade associations formed the “Making Measurement Make Sense” (3Ms) task force to work toward a multilateral solution to this measurement challenge. Of late, the task force has been working closely with the Media Ratings Council (MRC) to assist in establishing measurement standards that will smooth out some of the counting discrepancies between publishers and digital ad measurement providers which currently exist when it comes to viewable impressions.

Interested in learning more? Check out the Ad Age article regarding this announcement.

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The Ad Viewability Debate Rages On

5 Jan

ad viewabilityThere has been much discussion in the wake of the Interactive Advertising Bureau’s (IAB) mid-December release of their proposed “standard” for the measurement of digital media delivery in 2015. 

Advertisers, agencies and publishers should celebrate the progress being made and the healthy nature of the dialog now occurring between each of the participating stakeholders in this important sector of the global advertising marketplace. Having said that, the pace of change and the level of investment being made by the three major industry associations whose members have the most at stake has been disappointingly slow. 

By way of background the Association of National Advertisers (ANA), American Association of Advertising Agencies (4As) and the IAB formed the Measurement Makes Sense (3MS) task force in 2011 with the goal of “fixing digital measurement.” According to the IAB, the three industry groups have spent $6 million collectively in pursuit of this goal.  

Not to diminish either the effort or the investment, during this same time frame digital spending has increased from $86.6 billion in 2011 to an estimated $142.0 billion in 2014, up 17.2% year-over-year, is forecast to represent 30% of global ad expenditures in 2015 and will likely eclipse TV spending by 2017. Which in this author’s humble opinion supports the observation that the industry has simply not done enough to remedy the limitations that exist when it comes to validating digital media delivery. 

On the surface, many were surprised at the progressive stance taken by the IAB in suggesting that the industry adapt a “70% viewability threshold” for measured impressions in 2015. The question others are asking is, “Progressive relative to what?” The IAB suggested that up until its proposed 2015 transitional guidelines that the “industry standard” was a definition of viewablility issued by the Media Ratings Council (MRC). The MRC’s definition considered a desktop display ad to be viewable if 50% of the ad’s pixels were in view for at least one second and two seconds for desktop video ads.  

It should be noted that the MRC’s definition, which was introduced in the spring of 2014, was never adopted by the advertising industry as a standard to guide publisher/ advertiser negotiations. Thus, it was no surprise when the 4A’s immediately issued an opinion to its membership to reject the IAB’s online viewability guidelines. According to one industry executive, Todd Gordon, EVP of Magna Global, a leading media planning and buying agency, “Running a campaign and paying for 30% of the ads not being viewable isn’t acceptable to us or our clients.” 

In the press release announcing their proposed 2015 guidelines, the IAB trumpeted the “shift from a served impression to a viewable impression” as “yet another step to greater accountability in digital media.” So it was something of a surprise and contradiction to learn that the first of their seven proposed “2015 Transaction Principles” suggested that “all billing continue to be based on the number of served impressions during a campaign.” Additionally, the proposed guidelines segregate served impressions into two categories, measured and non-measured, with the 70% viewability guideline applying only to measured impressions. Understandably, advertisers might view this as something of a disconnect as it relates to the transition to a viewable impression standard. 

We understand that digital campaign viewability measurement is a challenging proposition due to variances in the types of ad units being utilized and the different audience delivery measurement methodologies in use today. However, the IAB’s proposed guidelines continue to place the lion’s share of the financial burden for these shortcomings square on the backs of the advertiser community. Given that the composition of the IAB’s membership is largely made up of publishers, which have benefitted tremendously from the dramatic growth in digital media revenues, we believe that the 4As was right to reject the IAB’s proposed guidelines, with the goal of pushing for a more balanced standard, with more aggressive viewable impression delivery guarantees. 

And while continued dialog between the ANA, 4As and IAB on this topic is encouraging, we know from experience how long and arduous a journey toward an industry “standard” can be. It is for this reason, that we applaud the efforts of those advertisers and their agencies that have taken matters into their own hands and begun to eschew digital ad inventory of questionable value or with limited delivery guarantees. It has been reported that advertisers such as Kraft, for example, have “rejected up to 85%” of the digital ad inventory offered to them.  

Historically, we know that when advertisers self-police their ad investments, audit contract compliance and supplier performance and withhold ad dollars where appropriate, agencies and publishers will begin to take the notion of transformative change as it relates to digital media much more seriously. As Kevin Scholl, Digital Marketing Director at Red Roof Inn aptly stated in a recent Adweek interview on the viewability issue, “If we were buying in spaces with lame guarantees, we had to question continue buying there – or evolve how were buying.” 

Let us know your thoughts on this important issue by emailing Cliff Campeau, Principal at Advertising Audit & Risk Management at [email protected].

 

 

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