For Publishers, Anti-Fraud Measures Are The Best Defense Against Walled Gardens

The Sell Sider” is a column written by the sell side of the digital media community.

Today’s column is written by Joe Hirsch, CEO at YellowHammer Media Group.

The IAB Labs’ “ads.txt” initiative is one of several recently proposed solutions to minimize digital advertising fraud. Participating sellers, including supply-side platforms and publishers, would place a file on their servers listing every company they work with, which could then be cross-checked to make sure claims line up.

It’s a relatively clean solution to counter site spoofing, a type of content and ad fraud that sucks up millions of digital advertising dollars every year. The initiative benefits brands, which are wasting money, and especially publishers, which are losing money to fraudsters and losing ground to safer walled gardens, such as Facebook and Google.

For publishers in the open web, anti-fraud measures are the best defense against the encroaching walled-garden ecosystem. Brands don’t like a hassle, and the appetite for complicated quality control measures is limited. Viewability is a good example. With multiple third-party vendors of record and an unending array of ad types and page templates across publishers to compare, many buyers have simply retreated to the standardized and safer inventory in the walled gardens. Anti-fraud measures like ads.txt need to be streamlined and simple to entice buyers to play ball.

There are a few hurdles to get through. A lot of companies must adopt it before it works, and even though IAB recently launched a web crawler to speed up the cross-checking process, it’s not remotely real-time enough to be part of the initial programmatic bidding process. What’s more, two cooperating companies could game the system, and outsiders could hack into individual files and alter them.

These issues all have solutions. As more companies adopt ads.txt, it’s likely that programmatic companies will build solutions to the real-time problem. A central and open repository to collect all of the information could also speed things up and offer an auditing opportunity to further protect from hacking or collusion between two bad parties. It is in the publisher’s best interest to work with partners to solve these problems and to cooperate quickly to gain a critical mass. To amass scale in an ecosystem that currently rewards reach over quality, publishers have tons of syndication and distribution partners that need to be vetted and accounted for.

Indexing inventory for quality publishers offers more than a barrier against fraud, as it is akin to creating an instant “open web walled garden.” For high-value inventory like video, an indexed pool of inventory allows a buyer to select a category like “large player click-to-play” and be confident that they are actually getting it. It would diminish the complexity of buying across publishers and increase the consistency and quality.

Unfortunately, the buy-side focus on scale is the one problem that requires buyers to change before publishers have their day in the sun. Brands and their buyers have become accustomed to a lot of scale at low prices. It’s all an illusion, but one that claims millions, if not billions, of dollars in ad budget annually. When fraud is cleared away, scale on the open web will inevitably shrink, but will buyers allow prices to rise?

Many publishers have fought hard to increase prices as viewability measures tighten. Ads.txt could create an even more severe contraction. Unlike viewability, good publishers have everything to gain with anti-spoofing measures because their sites should be unaffected and the value of their content should grow. It’s possible competition for – finally! – good quality inventory increases enough to raise prices without a fight. But brands and buyers must be willing to embrace this change, which is simply a more accurate representation of real impressions reaching real people.

Agencies and middlemen benefit from a highly distributed, large-scale marketplace, and they are set up to focus on low prices and big reach. Agencies in particular are paid and measured by metrics that chafe against anti-fraud measures that lower scale, increase prices and encourage their embrace of Facebook and Google. The complexity of a media buy with the open web also includes trading desks, demand-side platforms, supply-side platforms, networks and other middlemen that have a variety of incentives to play ball or not.

The problem with misaligned incentives in digital advertising is not new, but in the case of spoofing, a brand’s money is wasted in a way that also hurts publishers. If publishers don’t engage brands quickly, they will simply retreat further into the safety of the walled gardens. There is a unique opportunity for the buy and sell sides to put pressure on the middle from both ends and employ a practice that will decrease wasted spend and increase money going to real publishers. The two sides have a lot of work to do before any of these initiatives are possible.

Follow YellowHammer Media Group (@yellowhammermg) and AdExchanger (@adexchanger) on Twitter.

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1 Comment

  1. Neal Richter

    Great comments Joe. One note of clarification is that no crawler should be fetching this data from the publishers webservers in real-time during the bidding process. That’s not tractable due to latency issues, the data should be cached for use and recrawled often. The reference crawler code is an example implementation one how to fetch, parse and store the data for loading in a cache.