Calling Out Suppliers of Fraudulent Inventory Will Go A Long Way

jeff-banderData-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Ephraim (Jeff) Bander, president and chief revenue officer at Sticky.

We have increasingly become familiar with jaw-dropping, disheartening stats around digital advertising fraud. A recent study suggests that there is between 88% and 98% of bot-driven fraudulent activity.

Imagine if consumers experienced these abysmal metrics in real life. What if, for example, half of all Amazon orders never arrived, but customers still had to pay for them? Consumers simply wouldn’t allow it.

But in digital advertising where ads are increasingly bought and sold programmatically, brand advertisers have little recourse because the supplier’s identity is often hidden beneath a complex network of instant transactions.

But what if all suppliers were tagged?

Google’s Ad Traffic Quality team recently proposed a concept it calls Supplier Identifiers, which it is actively discussing with the Trust Accountability Group’s (TAG) Anti-Fraud Working Group. Essentially, the buyer of any branded (non-blind) impression should receive a chain of unique supplier identifiers for each reseller, such as an exchange, network or sell-side platform, and the publisher.

“With this full chain of identifiers for each impression, buyers can establish which supply paths for inventory can be trusted and which cannot,” wrote Vegard Johnsen, a product manager with Google’s Ad Traffic Quality team.

I believe Johnsen presents a great first step to addressing fraud in our industry.

Address The Transparency Problem

How can the digital ad industry’s endemic fraud problem be fixed if we can’t precisely pinpoint the culprits?

First and foremost, anyone trying to solve this widespread, intricately complex problem needs to prioritize transparency. Making data and information more easily accessible would give brands and agencies better information to avoid spending and partnering with bad actors.

The Supplier Identifiers approach takes a step toward providing the ecosystem with much needed transparency.

“If a buyer finds a potential issue, and it’s clear where the problem lies in the supply path, then there should be an unambiguous process for refunds. It will also be easy to avoid this supply path in the future,” Johnsen wrote.

Tagging the participants along the supply path provides a transparent feedback loop by which buyers can assess whether they would like to pursue or avoid the supplier. TAG already announced plans to create, maintain and share a fraud threat list of domains that have been identified as known sources of fraudulent bot traffic for digital ads.

A Simple, Sustainable Solution?

In theory, the Supplier Identifiers concept presents an elegant solution to creating transparency and accountability across the ecosystem. It sounds simple enough – buyers of any impression can just tack on another tag at the point of sale. But this solution also could also face challenges.

From a technical point of view, implementing Supplier Identifiers can be complex, and hackers could still game this system. As long as multiple hands touch an ad before it goes live, there will always remain the risk that savvy, well-funded tech hackers will activate new ways to steal value.

Additionally, the proposed solution only deals with non-blind impressions. In real-time bidding, impressions are blind, so as RTB buying and selling accelerates, this solution would need to account for blind impressions.

Many businesses have built entire revenue streams off of fraudulent activity. Therefore, while the industry will inevitably solve ongoing technical challenges, this solution may face resistance from the companies whose existence relies on keeping their business models intact.

Looking Ahead

If the idea of Supplier Identifiers takes hold in the industry and forms of it are implemented, the industry should begin discussing practical, enforceable ideas on how to take action upon this new capability.

For example, brand advertisers could develop processes and policies that activate information obtained from the Suppliers Identifiers. They could use the information to blacklist or remove offending digital publishers or partners from future media buys, demand refunds within 30 days of identifying a problematic supplier or report suppliers to a task force, such as TAG. As a result, suppliers will be forced to reassess their business models and align with buyers’ rightful demands for quality inventory and real human engagement.

The idea that Johnsen proposes is one of numerous great solutions that industry leaders are pursuing to preserve the health of digital advertising. The more we can do to encourage these debates and find ways to partner on industrywide initiatives, the better positioned the industry will be to reduce and prevent future fraud.

Follow Ephraim (Jeff) Bander (@Stickyadman), Sticky (@sticky_ad) and AdExchanger (@adexchanger) on Twitter.

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  1. Thanks for bringing this program to light, Ephraim! Trust and transparency are the features we most need to share. On that note, I’m not sure I would characterize all RTB impressions as blind. Facilities exist in OpenRTB to share all relevant data about the ad opportunity with the buyer. In a trusted transaction, the seller is the buyer’s eyes.

  2. Is there a proposal (via TAG, Google, or otherwise) yet? At the very least, each exchange agreeing to identify the last-mile-seller, as (I think) Andrew suggests in his post, would go a long long way. Contracts between exchanges and participating sellers should IMO make this an absolute must – while you don’t have to disclose the underlying publisher and/or site URL, you should at least have to disclose YOUR identity. That way, I at least have some way of blocking you (and everything below you in the supply chain) out, at the exchange level. Not as ideal as full transparency, but a damn good start and one quite a few exchanges don’t [yet] provide.