The Ad-Tech Industry Takes Aim at Its Unloved Middlemen

Ad fraud and wasted spending are top of mind for advertisers in the push for transparency

Getty Images, Triplelift

Programmatic’s “unknown delta”—the recent finding that 15% of ad spend seems to vanish into the ether—has sparked efforts to shine a light on ad tech’s opaque supply chain. That is translating into added scrutiny of redundant middlemen and fraudsters alike.

In a recent “directness test,” sell-side platform (SSP) TripleLift found that cutting out an intermediary shaved 28% off the advertiser’s CPM costs, according to results shared with Adweek. The test examined the same ad campaigns with and without a reseller. Alongside lower costs, it also found that campaigns were three times as likely to win premium ad inventory on auction.

Sonja Kristiansen, TripleLift’s vp of platform partnerships, told Adweek she was “floored” by the magnitude of the test’s findings. “When you take away a financial intermediary from a transaction, that’s going to allow lower bids to win more often,” Kristiansen said. 

“Direct path to inventory from a DSP directly to the exchange and publisher has a significant impact when it comes to campaign performance and the marketer’s bottom line,” she added.

Meanwhile, a recently unveiled partnership between Index Exchange, an SSP, and White Ops, an anti-fraud firm, is looking to clamp down on invalid traffic. Increasing adoption of industry initiatives like ads.txt and sellers.json are helping prevent such fraud, White Ops co-founder and CEO Tamer Hassan told Adweek. “When we all band together, every new fraud scheme we see informs our defenses and takes another arrow out of the fraudsters’ quiver,” he added.

TripleLift, Index Exchange and White Ops are joining a growing chorus of programmatic players focused on supply-chain transparency. In April, the Trade Desk began asking SSPs for streamlined supply paths to premium ad inventory—a move Kristiansen cited as part of the motivation for the TripleLift study. 

The government has gotten involved in cracking down on ad fraud, too. Last year, two Kazakh nationals pled guilty to orchestrating a $29 million online ad fraud scheme uncovered by the FBI and several cybersecurity firms, including White Ops. The plot, called 3ve, planted invisible browsers on consumers’ computers in order to impersonate ad traffic.

Maggie Louie, founder and CEO of Devcon, a cybersecurity firm that works on similar cases, told Adweek that ad fraud schemes are becoming increasingly easy to perpetrate. “[The digital ad space] is the perfect ecosystem for criminal activity: money laundering, ad fraud, data theft,” she said. “And it’s really driven by the cheapness, the level of anonymity that’s achievable, and the ability to exit through Bitcoin and anonymous digital money.”

According to recent research from Scalarr, which investigates mobile ad fraud, AI-driven “click injection” kits are now being sold for cheap on the dark web. Click injection spoofs user inputs to fake ad engagement.

According to Louie, such kits show how much easier committing fraud has become. “The industry has done a great job of making WYSIWYG-type tools that enable your Aunt Betty to build her own website with zero code skills. The criminals have done an excellent job of creating the same kind of WYSIWYG toys—but for enabling criminality,” she said.

Still, despite the industry consolidating around combatting ad fraud, Shailin Dhar, CEO of Method Media Intelligence, an analytics firm, told Adweek that rooting it out entirely is likely impossible. “This concept that we’re going to get rid of ad fraud is kind of ridiculous,” he said. “[40 to 50 percent] of the internet’s activity is from automated browsers and bots [such as web crawlers to index content]. We just have to make sure we identify them and separate them from human activity.”

Ethan Wu is an intern on Adweek’s media team. He is also a rising senior studying economics at Cornell University.