Ad Fraud May Be Down, But Marketers Are Cautiously Optimistic at Best or Downright Skeptical

Responses to ANA’s Bot Baseline report are mixed

The report predicts that the budget lost to ad fraud this year will be $5.8 billion—down from over $6 billion two years ago.
Photo Illustration: Trent Joaquin; Sources: Getty Images

The Association of National Advertisers (ANA) and cybersecurity company White Ops opened its fourth annual Bot Baseline report with the proclamation that “in some important ways, things are better than they have ever been.” But in spite of that cheery headline, the report left industry leaders feeling cautiously optimistic at best, and downright skeptical at worst.

The report, released last week, predicts that the budget lost to ad fraud this year will be a mere $5.8 billion—down from more than $6 billion just two years ago. White Ops pulled those numbers courtesy of the 50 ANA member participants in its study, who ran 2,400 campaigns across 606,000 domain, with 27 billion impressions between them.

“For the first time, the majority of fraud attempts are getting stymied before they are paid for,” the report reads. “[Either] by DSPs and SSPs filtering fraudulent bid requests, by clawbacks, or by other preventative measures.”

In other words, anti-fraud measures are baked into more layers of the ad-tech stack than ever before, lightening the load that those on the buy side need to lift when buying a publisher’s inventory. Meanwhile, industry heavyweights like Google are pulling its partners to adopt ads.txt in an effort to quash bots and brand-unsafe experiences.

“Thanks to the wonders of capitalism and competition, there’s a whole market for fraud controls that simply didn’t exist when we ran our first report,” said Michael Tiffany, the president and co-founder of White Ops. “Nobody in 2014 could have done any of this.”

When those fraud-fighting tools become more robust, he explained, bad actors struggle to find work. According to Tiffany, while the demand for bot traffic is still booming in 2019, the market for it has largely dried up; either because the bot sellers weren’t sophisticated enough to outfox modern algorithms or were forced further underground, cutting off their supply to buyers on the open web.

The news, while positive, led to little more than some hesitant hoorahs from voices in the industry. John Montgomery, evp of global brand safety at GroupM, said that “It’s encouraging to see the number come down, but the potential financial risk is still high for marketers who do not take robust actions to avoid ad fraud.”

“Measuring, benchmarking and using technology to avoid ad fraud, and optimizing media schedules to stay away from risky environments must be standard protocol for every campaign,” he cautioned. “If marketers and their agencies take these precautions, exposure to ad fraud can be minimized.”

Montgomery wasn’t alone in coupling his optimism with a measurement of caution that agencies and their clients need to keep their guard up.

Johnny Ryan, chief policy and industry relations officer at Brave, said it was “useful that the ANA continues studying the multibillion-dollar ad fraud problem. Every dollar that criminals steal from advertisers is a dollar stolen from publishers who could have used it to fund editorial production.”

He also said that he agrees with White Ops’ “warning to ‘reject the temptation of buying for tonnage,’ adding, “Buying ad views of unknown provenance is a losing proposition.”

Greg March, CEO of independent media agency Noble People, said he wasn’t surprised that the report found forms of ad fraud on the decline, given the attention paid to the issue in recent years.

March added that just accounting for fraud was not enough, arguing that media agencies need to employ higher standards for media buying more broadly.

“By default, if you optimize your buys properly and intensely, that will minimize your exposure to fraud,” he said.

Louis Jones, evp of media and data for 4A’s, stressed that the attention paid to the issue is partially due to measures the association had recently taken to beef up security for its members, like the introduction of the Advertiser Protection Bureau, or APB.

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