AOL’s Has a Major Problem With Suspect Inventory, Say Buyers, Researchers

Some contend that bots, nonviewable ads pervade exchange, though vehemently denies it

When it comes to online ad exchanges, the rule is, buyer beware. The same might be said for companies that acquire them.

Indeed, according to multiple digital buyers and researchers,, which AOL agreed to acquire last week for $405 million, is rife with suspect ad inventory. While video networks and exchanges have long had challenges with cheap gimmicky inventory like autoplay ads that appear below the fold, in-banner video ads and hidden ads with no sound, has a particular problem with straight-up bogus ad impressions generated by bots for the purpose of taking from advertisers, say multiple sources with first-hand knowledge of the exchange. Some experts pin the amount of suspect inventory in’s exchange at anywhere from 30 to 80 percent. That’s a lot of maybe dicey inventory for $405 million.

It seems that while bot-driven fraud has plagued the online ad world for years, the bad guys have shifted gears toward the still-emerging video market for three simple reasons: the money’s a lot better (10x CPMs), the security isn’t as mature and the measure for campaign success isn’t as hard to meet (click-throughs aren’t that important).

For example, one top exchange buyer said in a recent report that 32 percent of's sites were flagged as suspected of being bogus (nearly 500 sites), compared to 3 percent for other video exchanges. Separately, a Web fraud researcher found at least 30 percent of’s traffic to be bot-driven. The percentage of suspect inventory grows when nonviewable ads are included.

Another buyer said: “ has historically been the worst inventory we see in terms of suspicious activity. At one point it was close to 80 percent of their traffic. This month it was 40 percent suspicious.” That buyer added that a large amount of’s suspicious traffic probably is driven by bots, since they consistently see an extremely high overlap between sites.

Other buyers complain that a large amount of’s inventory falls outside the U.S., or that small percentages of impression volume will result in large ad click-through responses. founder and CEO Amir Ashkenazi emphatically denied that the company’s exchange is rife with bots or fraudulent traffic. “It is absolutely not true," Ashkenazi said. Today, every publisher is being [vetted]. We are absolutely ahead of the market on this. There is not a single publisher with fraud in our exchange now.”

To be fair,'s challenges are not unique in the Wild West that is online video. "Video exchanges’ inventory continues to be suspect,” said Abe Snyder, Traction's media director. 

"This is a serious problem for the industry," said another researcher.

But upon the announcement of the deal, AOL was touting as a best-in-class product for top publishers; a product/company that had been vetted for a year. That didn't ring true to some.

“The inventory they sold was all off-brand weird sites," said one buyer. "One of the sites that sticks in my mind from an inventory report was low-budget travel videos. I don't think is worse than a lot of others, but they're not as legit as Google."

One agency executive said his team tried’s products, only to back off after a few months. The problem, this buyer said, was that while promises transparency and control, sifting through the good stuff results in a very small inventory pool.

Per comScore, in June,’s exchange delivered over 1 billion ad minutes, just behind BrightRoll’s exchange (1.1 billion). That’s 18 ads per viewer. Google, which of course owns YouTube, delivered just 300 million ad minutes in June, though it did average 30 ads per viewer.’s reach was bigger than Google’s (39 percent of the U.S. Internet ad population vs. 35 percent).

Since the middle of last year when the bot problem started surfacing, launched a series of proprietary tools designed to help identify fraud, including one called Jambalaya, while also profiling fraud perpetrators in order to catch the next trickster. Per Ashkenazi, bans five to 10 sites per week, and has kicked out over 40 this month. It has four employees dedicated solely to weeding out questionable inventory, not including engineers. As a result of this aggressive tact, from January to March the amount of a inventory on’s exchange has dropped 40 percent to 4.8 billion impressions a month.

Ashkenazi walked Adweek through how’s buying interface for its exchange works. Buyers can select from a large number of criteria for placing ads, including demographics, individual sites, video player sizes and page locations. Buyers can also elect to choose whether ads are in-banner or in-stream, feature audio or no audio, or whether they are actually viewable or not. Yes, you can deliberately buy nonviewable ads on the exchange. And you can even choose to buy inventory that is a risk for fraud, or not.

Why not make viewable ads the default?

“We are not here to define what is good or bad,” said Ashkenazi. “It’s all OK as long as you and the buyer know … We believe we are the leader in quality. Our exchange offers complete transparency."

Among the sites listed in the exchange are and Per Ashkenazi, the company carries inventory from 72 of the top 100 video sites. But when it was building the exchange, it touted selling Blastro, Clipsyndicate, Dailymotion, Mindjolt, Nabbr, Redlasso and Videojug in a 2010 press release.

To be fair, has its vocal defenders. Several buyers praised its technology and its slew of buyer controls. 

Ari Bluman, chief digital investment officer for GroupM North America, said that the AOL deal presented an opportunity. “One of the many issues [in Web advertising] is the complexities it brings, and if this acquisition helps AOL make it easier to conduct business and brings pricing and performance advantages to our clients, then we’re fans of it.”

“Like any exchange there is more and less valuable inventory that can be sourced,” said Donnie Williams, chief digital officer at Horizon Media, of “The thing to note is that has lots of controls/filters/brand safety features. So, you can effectively limit your exposure to bad stuff.”

Plus, it’s worth nothing that AOL hasn’t necessarily talked up’s exchange when announcing the deal. Rather, the focus was on’s technology, and its role as a platform. Besides an exchange, manages a demand-side platform, a sales-side platform and an ad server. "AOL needs real-time bidding,” said one agency exec." I don’t think Adapt's inventory is what they are after.”

And to be fair, the lousy inventory/fraud issue seems to have infected much of the ecosystem. Several observers contend that is no worse than anybody else, and may have better technology.

That’s certainly Ashkenazi’s belief. "Not all ad exchanges are created equal," he said. "I don't think that every company is putting in the strict processes like we do. We don’t want to see video go like display. 

"We ran over 26,000 campaigns last year," he added. "We’ve never had a single campaign stopped."