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Under Pressure From Buyers, Fraud-Plagued AppNexus Girds For Battle

appnexus-fraudThe digital ad sector has made some tangible progress in the war on fraudulent ad impressions, thanks to new detection methods and improved hygiene from many sell-side platforms. But one of the biggest exchanges has added rather than subtracted invalid impressions, and buyers are complaining.

AppNexus, the industry's uber-exchange and one of the most promising ad tech platforms globally, has in recent months come to be seen as a major point of entry for invalid impressions in the programmatic space.

Multiple sources on the demand-side tell the same story: AppNexus has over the past year or so allowed legions of new supply partners, many of a long-tail nature, into its ecosystem. Many are legitimate publishers. Others are bot-fueled "ghost sites," ad farms and other sellers of a dubious nature.

Today, as much as 30 to 40% of the total impression volume flowing through AppNexus is impossible to verify. Not necessarily fraud, but not not-fraud.

And, while smart buyers are able to avoid much of this stuff by vetting supply sources, working with anti-fraud vendors, and applying best practices, other less sophisticated buyers are still snatching up those ads like so many knock-off Louis Vuitton handbags.

O'Kelley Acknowledges 'Trust' Issue

The good news for aggravated buyers is that AppNexus is aware it has a problem, and is working to solve it.

In an interview with AdExchanger, CEO Brian O'Kelley acknowledged the existence of "trust gaps" between buyers and sellers on his company's exchange. And he outlined plans to overcome the issue, including a new certification program that will essentially act as an AppNexus stamp of approval for verified ad space.

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Q&A: AppNexus CEO Brian O'Kelley On Fraud And Certifying Digital Ad Supply

BrianOKelleyAn AdExchanger story published Wednesday describes the persistent problem of fraudulent ad impressions in the AppNexus inventory supply, and the company's plans to fix it.

Its plan of attack includes a new certified supply program that will clearly label inventory AppNexus has deemed "valid." Buyers can choose to purchase only the good stuff, while ignoring the uncertified inventory that could be harboring botnet-generated, toolbar-injected, nonviewable or otherwise undesirable ad impressions.

Much of the material in the story came from a direct interview with AppNexus CEO Brian O'Kelley. Since the interview has substantial material that didn't make the story, we're publishing it in full here.

AdExchanger: How do you respond to concerns about fraudulent impressions trafficked through the AppNexus platform?

BRIAN O'KELLEY: AppNexus is a different kind of platform than almost anything else in the industry in that we are usually indirect in how we access supply. We have plugged into every supply source on the planet: every SSP, every exchange, every ad network, everything else. There's a very broad range of traffic we see. Some of it is fantastic, it's the best inventory in the world. Some of it is mediocre at best.

A key thing we talk about is "valid" vs. "invalid," not good vs bad. Valid traffic to us is, to the best of our knowledge, a human being on a web page or app. It looks to us like some source of inventory that is not hateful, pornographic, that is not a site supporting piracy. We have a whole list of criteria. The vast majority of our work goes into trying to delineate between invalid and valid. It's been in our policies for a long time. There's a ton of effort in the line between invalid and valid.

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DMP Lotame Crosses Cross-Device Off Its Road Map With A New Tool

LotameCrossDeviceCross-device is hot (hey there, Atlas), and now data-management platform Lotame has tossed its hat into the ring with a feature built from AdMobius’ technology, a company Lotame acquired earlier this year.

The feature, announced Wednesday, uses a combination of deterministic and probabilistic algorithms to create device matches and cross-screen audience segments within Lotame’s DMP.

Targeted Victory, a digital agency focused specifically on political candidates and causes, was one of Lotame’s beta partners, of which there were several, said Lotame CEO Andy Monfried. The tool, which Monfried positions as an alternative to the big boys (Facebook, eBay and, ostensibly, Google) is now generally available.

Lotame’s cross-device offering is baked directly into its existing DMP functionality, Monfried told AdExchanger, thereby giving clients the ability to simultaneously tap into other parts of the Lotame system, including its audience insights tool. The combination aims to enable clients to optimize campaigns by determining which device – be it PC, smartphone or tablet – is driving the best results.

A media-agnostic DMP like Lotame is well-positioned to play in the cross-device game because it gives users what Monfried called “complete ownership” over their audience segments, as well as flexibility to use whatever exchange, DSP or SSP they want for their execution. Once links are established between devices, users can transfer audience data gathered from cookies to mobile device IDs and vice versa – a feature that particularly appealed to Targeted Victory cofounder Michael Beach.

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CRM Startup Iris Mobile Builds Cross-Device Linkages Using Mobile Phone Numbers

marc-grabowski-irisChicago-based Iris Mobile provides a CRM platform that helps retail industry clients identify and personalize messaging to their customers across devices.

The system works partly by taking a phone number from a customer record, and then pinging the phone associated with that number to establish a device link. Iris then tries to deliver offers most likely to maximize lifetime value for that person.

This week the company hired Marc Grabowski as CEO. Grabowski was the COO at Nanigans and ran North America media sales at Yahoo, so he knows a thing or two about both SaaS and media sales models. He plans to bring that business knowledge to the project of ramping up the Iris platform in the marketing industry.

Iris employs less than 50 people and has an undisclosed number of customers. It has raised $3 million to date from a group of Chicago-based angels and VC firms, including Origin Ventures.

Grabowski spoke with AdExchanger.

AdExchanger: What problem does Iris solve?

MARC GRABOWSKI: Advertisers are going through the same path of acquiring data on mobile as they've done on desktop. The difference is all the experiences on desktop live within a single browser, so it's much easier to aggregate information on a user basis attached to a cookie. On mobile the experience is disparate. It's app, it's browser, it's messaging. Cookie-based targeting doesn't have the same impact. To aggregate all that experience together and have a single unique identifier, you have to go beyond the cookie. You have to go beyond the device identifier. You have to go to look at the only identifier that's really pure in mobile, and that's the cell phone number.

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Who Can Challenge Facebook In The Deterministic New World Order?

faacebookatlasNo one’s going to say that walled gardens don’t have their perks. Just look at Facebook and the new and improved Atlas.

Facebook’s long-awaited announcement of a cross-device user ID solution, made Monday as part of Advertising Week in New York City, invites advertisers into a putative Eden that gives them access to what could be 800 million cross-device logged in users. The solution comes with a new reporting tool, released in August, that tracks ad performance across devices.

But what advertisers don’t get is true data portability.

“Yes, companies like Facebook and Google have logged-in authenticated users and a lot of PII [personally identifiable information] which makes it easy for them to connect the dots across multiple devices and platforms, but that data still exists somewhat in a silo and there’s a limited reach,” Forrester research analyst Jennifer Wise told AdExchanger.

The latter point is particularly noteworthy, Wise observed, as scale “is going to be a problem for Facebook and the others, at least in the short term” – and that’s because there’s no standard cross-platform device ID.

“Google and Facebook obviously have a leg up on everybody because they’re bigger and they have IDs and everybody gets that,” said Lotame CEO Andy Monfried. “But what would be really good is if Facebook would give the IDs back to the marketers that spend with them.”

As Merkle CEO David Williams recently pointed out in a chat with AdExchanger, Facebook is in a strong position to close the cross-device loop, “but the underlying problem with addressable audience platforms like Facebook is that it might solve the issue on Facebook, but what happens outside the walled garden?”

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AOL’s Programmatic Upfront: Converting Convertro Into A DMP, Unveiling TV Targeting Tools

ProgUpfrontIf AOL hadn’t already made it clear it would double down on digital video and end-to-end marketing tech at its Digital Newfront in May, Monday’s Programmatic Upfront at Advertising Week in New York left no doubt.

AOL’s latest development? The company has layered in and built a data-management platform (DMP) out of attribution vendor Convertro, which it purchased in May.

The DMP will complement ONE by AOL, an early-stage unified platform combining video from AOL’s Adap.tv acquisition, the AdLearn Open Platform and AOL Marketplace, which the company unveiled in March.

AOL will roll out the DMP first to existing programmatic customers and it is designed to provide a single view across a marketer’s entire inventory – both on AOL and off. If 2014 was the year of the rebrand from AOL Networks to AOL Platforms, 2015 will be about the DMP or the “marketing investment platform.”

“Customers are changing the way [media] decision processes are happening,” said AOL CEO Tim Armstrong to a small group of press and analysts before he presented to an intimate gathering of 150 agency employees and marketers at Spring Studios in SoHo. The crowd was substantially smaller than last year's inaugural programmatic upfront, which drew 700.

Marc Fonzetti, director of media strategy and investment for Verizon Wireless, revealed during the Programmatic Upfront that AOL’s ability to blend CRM, media and second-party data led to a new partnership. Verizon Wireless could also augment data in AOL’s ONE platform by hooking it up to Oracle-owned DMP BlueKai, an openness which spurred Verizon's selection.

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With Atlas Relaunch, Facebook Advances New Cross-Device ID Based On Logged In Users

atlas-facebookFacebook has done something big with the relaunch of its Atlas ad server, acquired from Microsoft 16 months ago, but that something has little to do with serving ads. Rather it's about replacing the beleaguered cookie with a new, more reliable ad-tracking mechanism for the mobile age.

The new Atlas – expected to be unveiled Monday – leverages the relationships Facebook has with users who are logged in across devices to support a new persistent tracking mechanism. This ID, which strips out all but the most basic information about a Facebook user, is the first salvo in what many expect to be a series of moves by large Internet companies such as Google, Yahoo, Amazon and Twitter to use the login as the foundation of ad personalization and measurement.

"What we're bringing to the table is mobile," said David Jakubowski, who joined the company recently to head up Atlas and the Facebook Audience Network, the company's nascent ad network. "When you run an ad on Facebook, they know because you're logged in. We've partnered with all the major apps and ad networks and exchanges very specifically around the mobile world to enable Atlas to receive the ad events. When the ad runs from those places, we can use that to tie back all of the channels."

With the new cross-device measurement solution, Atlas will also begin to support other features, such as retargeting and pooling data from different sources, that have traditionally been the domain of specialized vendors such as data-management platforms and demand-side platforms.

But the new Atlas has its limits, chief among them that marketers are constrained in their ability to intermingle Facebook's cross-device data with other forms of first- and third-party data they house in outside platforms such as Acxiom. In short: Facebook's new tracking standard may be ready-made for the multidevice era, but you can't "take it with you."

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Fraud-day With comScore: An Ad Impression Is A Terrible Thing To Waste

fraudThis is the ninth in a series of interviews with vendors combating the problem of ad fraud. Other companies participating in this series include Moat, Sizmek and Asia RTB. Read previous interviews with DoubleVerify, Dstillery, Forensiq, Integral Ad Science, PubChecker, Telemetry, Videology and White Ops.

Digital ad fraud isn’t anything new.

comScore has been picking up on instances of non-human traffic dating all the way back to 2001, when it launched its audience measurement and media planning tool Media Metrix. 

“Of course, it’s changed dramatically over the years and it continues to evolve,” said Brian Pugh, comScore’s SVP of audience.

In an effort to keep up with that change, comScore acquired Mdotlabs at the beginning of August, a company with roots in the cybersecurity space.

“We’re data scientists,” said Timur Yarnall, co-founder of MdotLabs and SVP and anti-fraud evangelist at comScore.

And data scientists are what comScore needs if it’s going to “build trust across the whole comScore system,” said Pugh.

“comScore is a third-party neutral currency and it’s our responsibility to only report people,” he said. “We’ve been dealing with non-human traffic for a long time, and we simply cannot report those ‘audiences’ with our measurement tools. That’s the cost of doing business for comScore.”

Pugh’s and Yarnall’s teams are working on integrating the MdotLabs tech into comScore’s various offerings, including validated Campaign Essentials (vCE) and validated Media Essentials (vME). Although there’s no specific date set, Pugh said integration will be complete “very soon.”

“We want to help publishers and advertisers feel confident about their inventory,” Pugh said.

AdExchanger spoke with Pugh and Yarnall.

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WPP Group Supplies AppNexus With Open AdStream And A $25M Check

bigbrians-lesser-okelleyAppNexus wants to rethink the publisher ad server as a holistic platform for yield management, and it's starting with a rather old piece of technology.

The company will acquire Open AdStream (OAS) from Xaxis as part of a major transaction with WPP Group that will also give the holding company a $25 million stake in the programmatic platform. After the transfer of OAS (valued at about $155 million) and the new stake, WPP will have a roughly 15% position in AppNexus, which is now valued at $1.2 billion.

The transaction is part of a round AppNexus first announced one month ago that also includes a $60 million investment from an unidentified Boston public equity and asset management firm.

"We live in a world where there's only a handful of foundational technology platforms," said AppNexus CEO Brian O'Kelley. "One of those foundational areas is the publisher ad server. For the last 20 years it's been the most important technology for the publisher that wants to make money in the online advertising space. To this day it remains one of the most important and perhaps one of the least changed parts of the space."

As AppNexus and WPP see it, a platform offering independent of major consumer media platforms Facebook and Google is needed in the ad-server category.

"As Google continues to use its overall heft to drive publishers to DoubleClick for Publishers (DFP), there's a real risk that publishers are being left out of the programmatic revolution," O'Kelley said. "It's daunting. Google has a very strong position, but it's time for a change."

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FTC Big Data Workshop: More Transparency, Please

FTC ImageThe Federal Trade Commission (FTC) wants to know what marketers are doing with segmentation profiles like “urban scrambler” and “ethnic second city struggler.”

The potential for advertising segmentation to exacerbate inequality was a central topic at Monday’s FTC workshop, “Big Data: A Tool for Inclusion or Exclusion?” The Washington, D.C., event included representatives from advocacy groups like the American Civil Liberties Union (ACLU) on the consumer side and the National Retail Federation (NRF) on the marketers' side, as well as data companies like Epsilon.

While the FTC has proposed legislation to address issues in data marketing, the workshop also served as a forum for how the industry, especially data brokers, should self-regulate.

“There needs to be more accountability throughout the ecosystem,” FTC Commissioner Julie Brill told AdExchanger at the event. The FTC has already made legislative recommendations regarding data brokers and data security. Some are outlined in an FTC report, “Data Brokers: A Call for Transparency and Accountability,” released in May. (more…)