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GroupM Singles Out Piracy Websites as Marketers' Next Ad-Fraud Headache

Costing advertisers $200 million a year

Sites with pirated content rip off advertisers. Getty Images

As the advertising industry looks to get a better handle on fraud, it's getting more specific about the types of sites that cause huge spikes in bogus traffic while also demanding more from ad-tech vendors.

Today, WPP's GroupM, which has been vocal about ongoing fraud and viewability issues, is implementing new guidelines requiring all of its media partners to receive anti-piracy certification from the Trustworthy Accountability Group (TAG).

According to a report from the Digital Citizens Alliance, $200 million in advertising is spent each year on websites that rely on pirated content—like copied news articles or e-commerce sites that sell counterfeit goods—to trick ad networks into thinking they are legitimate properties on which to run ads.

Such fraudulent sites rip off advertisers in two ways: They sell ads against copied content, or they set up botnets that infect computers with viruses that drive huge numbers of clicks on ads.

"We realized that this is a major, growing issue," said John Montgomery, chairman of GroupM North America and co-chair of the TAG Anti-Piracy Working Group. "For the past few years, we've been tackling this process by creating our own lists of pirated sites and making sure that our ads didn't go onto those sites." (GroupM handles $106 billion in media for advertisers.)

The WPP-owned media company started beta testing the program late last year with Veri-site and is now requiring that other verification companies—like DoubleVerify, Integral Ad Science and Moat—get TAG's seal of approval. All ad networks and publishers that work with WPP will also need to work with a TAG-approved provider.

The first round of approved companies—which TAG calls Digital Advertising Assurance Providers or DAAPs—will be released during the fourth quarter of this year. On Jan. 1, GroupM will start enforcing the rule in its campaigns.

According to Montgomery, none of WPP's clients have been hit with fraud from bootleg websites yet, but the company wants to add the extra verification step should it become a bigger issue.

"Just because there's no crime doesn't mean you fire the police force," Montgomery said.

Regardless of who is behind ad fraud, tackling piracy is another step in the long process of stamping out fraud altogether, said Mike Zaneis, CEO of TAG.

"What we see as an industry is that there's not much differentiation between the fraudulent activity and things like proliferation of malware and the stealing of content through piracy sites," he said. "These are all links in a chain of criminal activity that is victimizing the digital advertising supply chain. It's perpetrated by the same entities."

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