Hey Digital Media Doomsayers—Did You Forget About Ad Fraud?

Repent, sinners, because the digital media apocalypse is now upon us. Even outside the trades, the news is awash in talks of corrections; discourses on the failure of advertising and why subscriptions are the only option; and pre-emptive surrenders of souls to the Duopoly. I hear bunker sales are through the roof and there might be a shortage of canned goods!

Sure, November has been awfully eventful: Mashable was acquired for a fraction of its previous value; Time Inc will be swallowed by Meredith; new media darlings Vice Media and BuzzFeed missed revenue goals, and the latter announced severe layoffs (8% of staff!).

But in all the digital advertising existential dread that seems to swirl around my Twitter feed, there’s one thing I haven’t seen discussed much, especially considering the peak outrage back in October: ad fraud.

You remember the dramatically headlined exposé “Attack of the Zombie Websites” that appeared in beleaguered BuzzFeed? It was a well-researched investigation of a circle of websites that were using bot traffic to rake in millions in ad spend off the exchanges. I was most despondent by how depressingly common this kind of story has becomeThe Wall Street Journal reported on a similar ad fraud scheme less than two weeks ago.

Over the last few years we’ve seen a lot of eyebrow-raising headlines about ad fraud. The Association of National Advertisers said $7.2 billion could go into fraudsters’ pockets in 2017 while WPP put that figure at a whopping $16.2 billion. These numbers are highly debatable, but they do raise a significant question: if that spend hadn’t been snatched by scoundrels, where would it have gone?

Put these two stories together. It may be true that there are too many publishers for all the ad dollars out there, but we can’t really judge because a fair deal of those ad dollars keep getting thrown to scam artists.

Yes, We Have Solutions

Ads.txt should be a game-changer here by disenfranchising domain spoofing and taking a chunk out of the arbitrage game that has kept a lot of useless intermediaries afloat. Publishers have realized this and are getting their files in order, and DSPs are stepping up to read the files. They all need to embrace scanning ads.txt files post haste. I have far less faith in TAG’s anti-fraud certification because it seems like a glorified white list that potential malfeasants could pay to jump on.

But another angle is one I’ve been hitting a lot lately—the buy side needs to wise up. At its heart, programmatic is about offering greater control to both buyers and sellers when it comes to digital advertising transactions. With great power comes great responsibility, a fictional character once said, but the buy side keeps shoving the blame away.

The irony of agencies and advertisers putting onerous demands on premium publishers for guaranteed deals while throwing away their money chasing cheap impressions has long lost any humorous value. The buy side needs to realize that the promise of “reaching your audience on a million sites!” was more a pipe dream—one soiled by the ease of committing fraud. They need to scrutinize all their partners, and demand that their ad tech providers get on the ads.txt train. The transparency the buy side has long claimed to crave is available through transactional tools such as private marketplaces and programmatic guaranteed.

I’m not saying we should see an extra $16.2 billion dollars in premium publisher revenue reports next year because of ads.txt files and smarter buying, but we will see an impact. It’s a positive path forward as opposed to all the doom and gloom out there.

Don’t Give Up on Prog!

Many of the “end is nigh” pieces I’ve been scanning this week rightly point out that the “pivot to video” move is/was misguided, with one aptly describing it as a Hail Mary pass. (Smart digital publishers with a history in text see video as potentially lucrative, but a channel with high barriers to entry.) But some also suggested that the integration of programmatic was a failure.

I think the notion is weakened by the fact even though it laid off a lot of revenue people, BuzzFeed also said it was hiring—bolstering its programmatic workforce.

It’s arguable, but BuzzFeed’s revenue slump can be tied to its over-reliance on a branded content (or native, if you like) program. When the company announced it was opening up the programmatic floodgates this summer, many us thought, “It’s about time.”

BuzzFeed could not rely on its native program alone to achieve its lofty scale and revenue goals (especially when it’s buddy/engine Facebook keeps tinkering with its algorithms and offerings). As I’ve argued, the new monetization dichotomy is not premium and remnant, but a mix of custom/branded content offerings and (primarily programmatically transacted) media.

Programmatic has been a rocky road—full of potential, but with a lot of bad actors (and I don’t just mean the fraudsters) inhibiting its development. Although the space has its troubles, programmatic is not the problem; it’s a big part of the solution.