New Year’s Resolutions For The Methbot Hangover

paulbannisterThe Sell Sider” is a column written for the sell side of the digital media community.

Today’s column is written by Paul Bannister, co-founder and executive vice president at CafeMedia.

A new year brings the opportunity to start fresh and kick things off the right way. Often, the resolutions we choose are direct reactions to the excesses of the year prior, whether personal or professional.

The hangover that many are waking up from right now in ad tech is Methbot, possibly the largest case of fraud against the media industry in history.

It’s clear that we all should resolve to prevent things like Methbot from happening again, in whatever form they may take. There is a lot of diligence that is happening across the industry, but much more needs to be put in place, and it is equal parts technology, methodology and communications.

Beyond the technology, what made Methbot so successful was that it created an illusion of something that all buyers wanted – inexpensive, high-quality video inventory on premium publisher sites, at scale. Everyone who was duped by Methbot wanted to believe that the inventory was real, because it was much easier to believe the systems than to question them. To prevent these issues in the future, we must question everything, and everyone must take action.

Here are a few of the many resolutions we should collectively make in 2017.

Publishers: Pick Your Partners Carefully

While not directly affected by Methbot, aside from domain names being used without authorization, publishers were nothing more than lucky in this scenario. The next fraudulent attack on our industry could hit publishers, and they need to be prepared for this eventuality. With header bidding, publishers are connecting to more and more partners, and this promiscuity could easily be a vector for the next strike. To prepare, publishers need to act and think more like ad tech companies.

Just as exchanges and DSPs need to be more diligent about their partnerships, so do publishers. Starting any partner conversation with “How was your exchange affected by Methbot?” is a good start, but each publisher should deeply validate the anti-fraud mechanisms that their partners are putting in place, for their own safety and for the integrity of the digital ad ecosystem.

Agencies: Work Directly With Publishers

Methbot capitalized on the anonymity of RTB systems. There’s just enough transparent information embedded within the OpenRTB protocol to make it effective when all parties can be trusted, but any criminal parties in the system can take advantage of this same information. Working directly with publishers via technology like PMPs significantly reduces the risk of fraud. If agencies know the counterparty in a transaction, they’re much less likely to be taken advantage of. When that party is anonymous or even just purchased indirectly, who knows what you are getting?

Advertisers: Recognize The Fair Value Of Media

From the very beginning of programmatic buying, there has been a perception that programmatic is cheap. While programmatic has many benefits, price is no longer one of them. Media is media, regardless of the channel by which it is purchased.

Programmatic may be cheaper than standard IO-based buying, but the discount is likely around 20%, mostly from efficiencies in the buying process – not from the media cost itself. The total 80%-plus discounts that may have existed in the past are disappearing, and when they do exist, they are likely too good to be true – just like Methbot inventory.

Exchanges And DSPs: Audit Your Partners

As the central players within the programmatic ecosystem, exchanges and DSPs touch nearly every other party. Many have already come out and documented how little their clients were affected – which is fantastic. However, a number still remain quiet, either because they were heavily affected or aren’t even sure, and both are bad outcomes. For those who weren’t affected, the self-congratulating should quickly end and immediately be replaced with an even greater sense of urgency to validate the integrity of every partner they work with.

For The Industry

As always, the hardest part of a New Year’s resolution is sticking to it. For our industry to continue to grow, it is critical that these points be addressed quickly and firmly. 2017 can be another breakout year for programmatic, and we can’t allow fraud and lack of trust to hamper adoption and keep buyers on the sidelines. The systems and processes we put in place need to be bulletproof, so the scammers will look for a different industry they can take advantage of.

Follow Paul Bannister (@pbannist), CafeMedia (@CafeMedia) and AdExchanger (@adexchanger) on Twitter.

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