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P&G Acts on its Promise to Clean Up Supply Chain

Well, P&G has done it — exactly as Chief Brand Officer Mark Pritchard promised a year ago it would.  The consumer giant cut the number of agencies it works with from 6000 to 2500 and next year will cut that number in half again. According to Chairman and Chief Executive David Taylor, the company has found and eliminated as much as 20% media waste and still increased its reach 10%. Somebody woke up the hibernating bear and it was hungry for change.

For years some of us in the industry have been simultaneously laughing and crying about waste and fraud in digital advertising. No one seemed to care. But all of a sudden the KPIs for everyone from media buyers to middlemen seem to have changed, and everyone’s serious about cleaning up the waste.

P&G is just one example of changes in the media industry that will come about in the coming years. The hammer has now come down on fraud, wielded by the only people who ever could swing it with enough power, the brands that pay the bills.

Now what’s going to happen next? Taylor already told a Consumer Industry Analyst Group that P&G is taking more of its media buying inside, and it will do that “through private marketplace deals with media companies, and precision media buying fueled by data and digital technology.” So much for waste.

What does this mean for the online publishing ecosystem?

For the ad agencies and trading desks it probably means a round of layoffs and belt tightening as many of them lose a big piece of business. For brands, it means some broad shoulders to stand on as they demand greater transparency and more attention to brand safety.  In other related news, Unilever’s CMO, Keith Weed, threatened at the IAB Annual Leadership Summit that it would pull its advertising from Facebook and Google if the platforms don’t curb hate speech and controversy.

For ZEDO it means increased focus on our core mission, which has always been to help our publisher partners to monetize their inventory more completely and at hight rates. For the past three or four years, we have been operating as a private platform that joins publishers who have premium content with big brands in a secure buying environment. We have made certain that any transaction within our control is transparent, viewable, and brand safe.

It seems like the industry is coming our way.

 

 

Trustworthy Accountability Group

The Trustworthy Accountability Group (TAG) has accomplished an incredible amount during its first year, including rolling out a TAG Registry, an Anti-Piracy Initiative, Certified Against Fraud, Certified Against Malware,  and updated Inventory Quality Guidelines. Now the work begins: to round up more participants. The early adopters are already on board: 127 companies are already TAG-Registered. To be registered, companies must complete a self-assessment and attest to having certain processes and procedures in place and a plan to keep them in place for the coming year. TAG Registered companies have been verified as legitimate participants in the digital advertising industry through a proprietary background check and review process powered by Dun & Bradstreet and approved by TAG. Once registered, companies are awarded a TAG-ID, a unique global identifier that they can share with partners and add  to their ads or the ad inventory they sell.

130 people, myself included, have completed Compliance Officer Training, and have been designated Compliance Officers for their companies.

I first became involved with the Trustworthy Accountability Group last January, when it held a meeting at the IAB Annual Leadership Conference. Because I’ve represented ZEDO for five years on several industry initiatives that fit our “high-road” approach to partnership with both advertisers and sellers, I attended the meeting and listened to the plans. I had no idea how fast they would move.

By the end of the year, TAG had released a suite of anti-Malware tools, including “Best Practices for Scanning Creative for Malware,” a glossary of terms that establishes a reference of malvertising types, and a Malware Threat Sharing Hub, where certified companies can join a trustworthy collaborative network that qualifies and tracks malicious ads.

The Certified Against Fraud program, which was the last to roll out,  is open to participation by buyers, direct sellers and intermediaries across the digital advertising ecosystem.  Requirements to achieve the TAG “Certified Against Fraud” Seal differ according to a company’s role in the supply chain.  These requirements are outlined in details in the Certified Against Fraud Guidelines.

Companies that are shown to abide by the Certified Against Fraud Guidelines receive the “Certified Against Fraud” Seal and can use the seal to publicly communicate their commitment to combatting fraudulent non-human traffic in the digital advertising supply chain.

When the group sent out its press release earlier this year on the first hundred companies to get registered, it reiterated its pledge to create industry transformation at scale. It was formed in response to multiple accusations by news sources and participants of lack of transparency. With TAG, the industry hopes to prove that it can regulate itself.

Online Advertising Faces Big Change (Again)

After the week of handwringing and testiness that was New York Ad Week, we can at least all agree on something; digital advertising isn’t going to go away right now. Digital ad spend will continue to increase as TV dollars come online. Publishers are not going to allow themselves to go out of business, and brands are not going to find magical new ways to find customers and give information. But we have had that brush with death that should convince us our industry isn’t immortal.

Advertising must and will change. We don’t have a crystal ball any more than you do, but experience tells us these things are likely to happen in the near future:

1)The number of intermediaries in transactions will decrease. Each intermediary not only increases page load time and annoys privacy advocates, but increases the chance of fraud. This was discussed at a session on Cleaning up the Supply Chain, in which the participants talked about cleaning up bot fraud. One way to do that would be to buy direct, or to buy on a private platform that only admits premium publications and the advertiser who wants to buy them. We think this will be the wave of the future, and advertisers will feel much more secure buying this way. This, of course, does not exclude the automated work flow that came with programmatic, but it does stem the tide of fraud and solve the viewability problems.

2) Premium publishers will take another look at  how they position themselves as premium. The flight to quality started in the summer, when advertisers began to realize how much money they were throwing away on bot traffic. A recent study by Digital Content Next demonstrated that there was 89% less bot traffic in video and 75% less bot traffic in standard display ads on premium publisher sites. The key here is to define whether a site is premium. For a while, the notion of a premium publisher was almost lost in the race for sheer numbers.

3) Ad formats will change to be less interruptive and obstructionist. One enormous and welcome change is the end of support for Adobe Flash, which was a groundbreaking tool to produce rich media back in the day, but  has proven out to be more of a hassle than a help as the ecosystem matures. Yes, producing ads in HTML5 may be more costly at first, but if that ensures more security it’s a net gain.

4)Customers, as usual, will tell us what they want. As advertisers, we are going to have to take into account the data plans of our mobile customers, and design and buy ads that don’t use up 50% of a phone’s data plan. Our inArticle format never did autoplay audio, which has made it much more adaptable to mobile than other video ad formats.

5)At the end of the day, we are going to have to make it worthwhile for consumers to turn off the ad blockers and pay attention to ads. This was said many times, but we must make our ads better and more compelling. There’s no reason why the same people who used to watch the Super Bowl just for the commercials can’t learn to trust the advertising industry again. This will mean offering more choice in whether and how to track customer data.

We’ve had a brush with disaster that should have taught us something: we can no longer take the consumer for granted.

Will An End to Ad Fraud Mean Bigger Budgets?

As buyers begin to demand better metrics on both ad fraud and viewability from publishers, the definition of how to measure  ad fraud keeps changing. Like viewability, fraud numbers can vary depending on the third-party monitor. And if you’ve ever seen a rat on a charged grid stop moving because of operational neurosis, you know that marketers won’t unleash the biggest budgets unless they have some standards with which they can feel comfortable.

The only thing that will change all this is greater transparency. Earlier this year, IAB in partnership with ANA and 4As started an industrywide initiative known as the Trustworthy Accountability Group to help promote transparency. The MRC is also trying to establish a certification for fraud detection. But as with viewability, it’s not so simple. In March, the group released list of first principles around fraud detection, source identification, process transparency and accountability.

The first step is to arrive at a common definition of what constitutes fraud.

There exists a set of ad-related actions generated by infrastructure designed not to deliver the right ad at the right time to the right user, but rather to extract the maximum amount of money from the digital advertising ecosystem, regardless of the presence of an audience. There also exists a set of actions generated in the normal course of internet maintenance by non-human actors – search engine spiders, brand safety bots, competitive intelligence gathering tools. These and other actions, whether they be page views, ad clicks, mouse movement, shopping cart actions and other seemingly human activities  must be expelled from the supply chain.

The supplier (ad network, exchange or publisher) must institute technology or business practices to eliminate bots, adware and malware traffic, and other sources of malicious activity.

At ZEDO we have been active in anti-malware efforts and have been selected for the Online Trust Association’s Honor Roll four years in a row. We were on the front end of this movement long before it became fashionable, and we developed our own technologies to weed out adware and malware.

Buyers should be able to identify the URLs  on which their ads appear. If the URL is masked, there must be enough trust and transparency so the buyer still feels comfortable. Suppliers must also able to supply information about what processes we employ to root out fraud. This is now becoming an industry-wide supply side requirement. There must be a rating scale, and an explanation to the buyer about how that scale works, how it is used, and what happens to the lower quality traffic.

The intent of the industry efforts is to develop a set of best practices so companies trying to achieve compliance will know what their guidelines should be. For publishers, exchanges, and networks, this should be a big opportunity, because compliance will unleash bigger marketing budgets. And since we already comply, we’d be happy to see the fraudsters chased out of the supply chain.

 

We Play it Straight: Our Stance on Fraudulent Traffic

We’re not fans of overgeneralization, nor of oversimplification. Alex Kantrowitz’s post on ad fraud contains both. In addition, it is incredibly cynical and tars the entire industry with the same brush. Here’s a sample:

Purging fraudulent impressions from the system would mean higher media prices and lower performance (though more accurate). Fraud pumps up publishers’ traffic, exchanges get paid a percentage for trading it, buying platforms’ performance looks better because of it, and agencies can bring those great results to clients. Everyone wins!

We’re not denying that ad fraud exists in the industry. But we’ve been in business since 1999, primarily as an ad server for publishers and a partner to help them adjust to the realities of the digital world. We were there when ad fraud first began, and because our positioning depended on helping our publishers, we got busy on combatting it almost immediately.

Because, you see, fraud doesn’t pump up publishers’ traffic if advertisers won’t pay for the ads. Once again, we were early to notice that our publishers weren’t getting paid for ads that weren’t clicked on. And now they’re not getting paid for ads that aren’t viewable.

We partnered with DoubleVerify and AdXPose (now comScore), and worked with every industry group to fight spam, fraud, and malware. In fact, we had, and still have, an employee dedicated to industry efforts to professionalize ad tech and weed out the scammers. But if you take the trouble to run Ghostery on any of our publisher sites, you will still find a myriad of trackers and ad networks besides ours.

For example, the site shown below has 110 trackers of various kinds, some of which could be fraudulent. But how can you weed them out if you are honest? The answer is, you can’t. Between the marketer and the publisher are 110 entities dropping cookies, selling data, and potentially committing ad fraud.  These are all the entities in the famous Lumascape. Much traffic that hits a publisher site does not even go through our ad server, so there’s nothing we can do individually.

110 Trackers on one News Site

On our own network, we do weed out fraudulent traffic. For us, refunds for fraud traffic are a contractual obligation, as Kantrowitz suggests they should be.

“Harvard professor and ad-fraud researcher Ben Edelman suggests making refunds for fraud traffic a contractual obligation. “In practice right now, you promise to deliver it, you don’t quite deliver it, people shrug, the world moves on,” he said.”

We’re not trying to say that ad fraud doesn’t exist, or that it is not important. But we are saying that condemning the entire industry doesn’t fix the problem and just makes the people who play it straight mad.

Ad Fraud: Long Term Industry Killer

There’s always something happening in the advertising business, and this week it’s fraud. Now that the dirty little secret that a high percentage of ad traffic comes from non-humans or bots, everyone is wringing their hands.

 

online fraud

online fraud (Photo credit: ivers)

Actually, the problem of fraud is not new. It originated almost as soon as publishers moved online. And the fact that there’s more data than ever before doesn’t solve anything. Each one of the accredited fraud detectors or viewability detectors has a different method of detection, and no only doesn’t anyone know what they’re detecting, they may actually all be detecting slightly different kinds of fraud.

 

There really ought to be a common data standard for what constitutes fraud, and that standard should be applied by both buyers and sellers. However, the industry is now so fragmented that it will be difficult to force the adoption of a standard unless—unless the people with the money, the people in brand marketing, demand it.

 

Right now, although it’s sad. almost everyone involved in the ecosystem is benefitting from fraud in the short term while they are also suffering from it in the long term.

 

Publishers are suffering because in buying cheap traffic, they’re jeopardizing their brands and their ability to command the eCPMS for premium content. By opening up too much inventory to RTB, they drive their own prices down in an effort to fill every ad unit.  They may be filling all their availability, but not with the income they want. Perhaps they’d be better off running some house ads than selling themselves to the second lowest bid.

 

Advertising agencies are suffering because they are not getting the return on their clients’ investment that the clients want. On the other hand, the harried media planner is buying audience, and desperate to use all the spend to get the commissions and fees the agency needs for survival. Long term, not being able to produce real conversions on the client marketing dollar will come back to haunt them.

 

Brands are suffering because they are spending large amounts of money to reach customers and increase conversions. Sure there’s “brand lift,” but at the end of the day brand lift doesn’t pay the bills. Customers pay the bills.

 

At ZEDO, we’ve got elaborate systems to block ad fraud and bot traffic before we serve the ad. This is something our team has to stay in front of on a daily basis. We also serve on all the industry working committees involved in trying to develop standards and processes. Because online advertising is still a relatively new business, we’re all on the same journey. Long term, it is not in anyone’s best interest to tolerate ad fraud.