Navigating ad fraud and consumer privacy breaches in programmatic advertising – TechCrunch


Programmatic advertising is a $ 200 billion a growing and large-scale global market, with connected television (CTV) serving as the latest accelerator. Unfortunately, however, it is also an industry rife with fraud and abuse of consumer privacy, particularly in emerging forms of media like CTV and mobile.

Global losses due to advertising fraud overwhelmed $ 35 billion last year, a figure expected to reach $ 50 billion by 2025, according to the World Federation of Advertisers. According to the WFA, ad fraud is “the second most important source of revenue for organized crime after the drug trade,” but there is no single ad fraud strategy.

To capitalize on the promise of video advertising on mobile and CTV, and measure the effectiveness of ads with confidence, business leaders need to make sure they’re reaching customers – not bots – and that they meet their business goals while remaining compliant with the latest regulations and laws.

Business leaders can take a few key steps to protect their reputation and ad spend:

  • Deploy sophisticated tools to reveal the types of ad fraud attacks your ad budgets are plagued by.
  • Analyze your budget with quality vs. reach in mind: Scammers continue to take advantage of advertisers’ historical obsession with reach.
  • Recognize that the “age of privacy” has arrived; business leaders must remain compliant and protect their brand image in the advertising market.

Know the different types of ad fraud in CTV and in-app mobile to better protect your ad spend

It’s important to take into account the different ways your advertising dollars can be wasted on incorrect traffic. Although 78% of U.S. households are now accessible through programmatic advertising on CTV, ad fraud rates remain high, at 24% in Q4 2020. Traditional ad fraud attacks, such as identity theft (i.e. pretending to be a different publisher) and bogus sites or apps, are being supplanted by more advanced systems, such as email farms. CTV devices.

Knowing that ad fraud is eating into your budget is the first step, but business leaders need to understand the different patterns so that they can apply the right protection at the right time.

Knowing that ad fraud is eating into your budget is the first step, but business leaders need to understand the different patterns so that they can apply the right protection at the right time.

Look at the scope through a quality lens

Historically, the standard way to measure advertising has been reach. However, reach is now more of a vanity metric if decoupled from traffic quality.

Striving to achieve reach while ignoring quality creates a prime opportunity for ad fraud. Generating fake traffic to create the illusion of ‘reach’ has become a staple in many ad fraud schemes, with some CTV systems making up to 650 million auction requests per day from bots, per day. Battery.

High impression rates that don’t turn into actual sales and pricing anomalies (compared to a peer group) are compelling warning signs of traffic quality issues.

As the growing CTV ecosystem charges premium prices, advertisers may be tempted to seek deals. However, several major streaming TV providers, such as XUMO and Philo, have warned advertisers about prices that sound too good to be true, noting that they may be signals of fraudulent activity. Try to identify where the traffic is coming from and ask questions when the data looks suspicious.

The advertising industry itself is also fighting back by giving business owners tools to thwart ad fraud. There are several industry task forces and oversight organizations, including the Media Rating Council, the Interactive Advertising Bureau, and the Trustworthy Accountability Group, which accredit certain platforms and vendors to fight ad fraud. These working groups and organizations also regularly publish industry standards and programs designed to combat fraudulent activity, such as the Ads.txt initiative to help advertisers know they are purchasing inventory through legitimate third parties. All business owners should use certified platforms, along with emerging programs and standards, to stay on top of the latest ad fraud trends.

Business leaders must prioritize safety and brand compliance

In addition to navigating the complex world of ad quality, brands now need to determine whether the publishers they work with are brand-safe and compliant with the latest consumer privacy and compliance laws.

Pixalate estimates from May 2021 show that 22% of Apple App Store apps and 9% of Google Play Store apps that serve programmatic ads do not have a privacy policy. This is important because there are already documented cases of consumer data is misused in ad fraud schemes. And 70% of apps in the Google Play Store have at least one of what Google calls “dangerous permissions,” a 5% increase in 2020. In addition, among applications that serve programmatic ads, 80% of Apple App Store applications and 66% of Google Play Store applications have children aged 12 and under in their audience, which brings COPPA compliance risks also in the equation.

There are several things at stake in brand safety that business leaders and brands should be aware of. Most importantly, what is considered “safe” for a brand is based solely on that brand – there is no gold standard because each brand has a different vision, mission and goals. Brand security is subjective. However, it is essential for success.

Ad fraud, brand security and data compliance are continually evolving, and leaders need to keep track of the numbers, stay on top of market changes, and invest in the right partnerships to ensure consumers, not bots, engage with the most impactful and effective content.

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