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This Week
September 02, 2021
Phantom Ad Requests Are Robbing CTV's Ad Dollars
Is Apple Really Giving Into App Pubs?
The UK Could Be Leaning Into Consumer Choice
Phantom Ad Requests Rob CTV of Millions of Ad Dollars
Photo by Tara Winstead from Pexels
According to eMarketer, 55% of CTV ad budgets (an estimated $6.7 billion) are spent via programmatic bidding and serve paths. A report recently released by Method Media Intelligence discovered a rogue group of five individuals who pretend they are streaming platforms like Netflix and Hulu, and send phantom ad requests. This small but nimble team is managing to steal as much as $10 million a month in ad dollars that is supposed to go to CTV.

“They are fabricating the existence of an ad slot,” explained Shailin Dhar, CEO and founder of MMI, to Marketing Brew, noting that “there are a lot of buyers desperate to show they bought CTV,” even if an ad never ran.

MMI does not stop the fraud from happening, rather it observes how the fraud occurs, in an effort to determine how to prevent future occurrences.

“The speed of these transactions, combined with the limited amount of buyer scrutiny (i.e. lack of app-ads.txt enforcement) has enabled half of the supply to be illegitimate,” the report noted. “If the market is able to de-monetize this counterfeit traffic sooner rather than later, it will be advantageous in the long run to not allow targeting models or detection algorithms to train on bad data.”
Why This Matters
Ten million a month compared to $6.7 billion a year seems like a drop in the bucket, but as the popularity of CTV buys continues to rise, so will ad fraud, if it’s not curbed.

The CTV has grown fast and furious in the past year and many believe that the accelerated growth makes it near impossible to keep up with the fraudulent ad requests.
CTV is wrought with fragmentation, which opens it up to challenges on how to measure it and price it. As AdMonsters noted in a previous article: “Like mobile advertising before it, advertisers have been forced to figure out OTT advertising as they go. The challenges are plentiful. For one, not every service monetizes with advertising via programmatic pipes (ever see an ad on Netflix aside from subtle product placements?).

Those that do vary wildly in implementation. Most don’t even use the same metrics to measure a campaign. So it’s really fragmented. It won’t get easier either. There are over 200 providers to date, with more platforms scheduled to release in the coming year.”
Apple Reports “Concession” To App Developers. But Is It Really?
Most of the recent news surrounding Apple and app developers sways to the position that the behemoth made major changes as part of a lawsuit with app developers. Many on Twitter, on the other hand, took a close look at the lawsuit and found that what Apple was offering was more clarification than concession. This only refers to USA-based companies, nothing overseas.

“The company will let developers tell its iPhone and iPad customers about ways to pay outside the official App Store, it said in a news release late Thursday. It also expands the types of prices that developers can offer for subscriptions, in-app purchases and paid apps, among other initiatives… Apple is also expecting an imminent judgment in a suit by Epic Games over similar allegations.”

Apple noted that it plans to create a $100 million fund to help small developers in the U.S. This sounds too good to be true, right? Kind of.

“The plaintiffs’ lawyers want $30 million of the $100 million fund for small developers,” noted NY Times reporter, Jack Nicas, on Twitter. He also pointed out that “companies like Netflix and Spotify already don't allow people to purchase subscriptions in their apps, allowing them to avoid Apple's 30% commission,” and believes “Apple made this minor change, agreed to keep its commission rates flat for at least three years, and paid $100 million to make a potentially large legal headache go away.”
Why This Matters

Remember that drop in a bucket comment from earlier? It applies here, too. One hundred million is a lot of money, but not to Apple. The App Store brought in an estimated $64-72 billion in revenue last year. One hundred million is pennies to Apple and a small price to pay to stop the continuation of a lawsuit that could potentially come for some of that billion-dollar revenue.

Meghan DiMuzio, executive director of the Washington-based Coalition for App Fairness, wrote in response that “allowing developers to communicate with their customers about lower prices outside of their apps is not a concession and further highlights Apple’s total control over the app marketplace.”

This good-faith gesture isn’t just about avoiding or circumventing this class action suit, it’s also about making grand gestures in light of the antitrust cases against the company's overall monopolistic practices (especially in the App Store). It’s easier to offer a branch than the whole tree (i.e. the App Store earnings).

Apple is “clarifying that developers can use communications, such as email, to share information about payment methods outside of their iOS app,” the company said in a statement. Clarifying does not equate to concession.
Is the UK Leaning Into Consumer Choice?
Perhaps. No one who uses the internet will tell you that they like, let alone read, those annoying cookie pop-ups? You know, the ones that inform you that the website you’re browsing using cookies, and yes, will you accept all of them, please? Most people, without reading or batting an eye, click yes to accept all cookies. Because it’s exhausting to see the same pop-up on every site.

“Britain will attempt to move away from European data protection regulations as it overhauls its privacy rules after Brexit. The freedom to chart its own course could lead to an end to irritating cookie popups and consent requests online, said the culture secretary, Oliver Dowden, as he called for rules based on ‘common sense, not box-ticking.’”

“The UK is starting to show that there is room for diversion from EU data protection law whilst still retaining the GDPR as a framework,” said Eduardo Ustaran, a co-head of the global privacy and cybersecurity practice at the law firm Hogan Lovells. “What this means in practice is that the way in which international data flows are approached is not identical to the way the same data flows are treated in the EU, but this doesn’t necessarily mean that the protection is going away.”
Why This Matters
Consumers can avoid cookie pop-ups by using privacy-forward web browsers like Brave, Ghostery, and Tor, turn off cookies or reject all cookie consent notices. Problem is, this puts so much onus on the consumer that fatigue wears through fast.

“The focus on consumer choice fails, in part, because consumers often don’t understand how information is collected and used online (and how they may benefit or be harmed by that use)…,” Jessica B. Lee, Co-Chair Privacy, Security & Data Innovations, wrote in AdMonsters. “Consent-fatigue hits even the most vigilant consumer, and at some point, it’s just easier to click accept so you can read that article and move on with your life.”

Lee also offered easier, more consumer-friendly ways that companies can explain to consumers what data is collected and how it’s used. Like a one-page privacy notice in layman’s terms and light on the legalese. Or a white list of advertising activities that can be universally approved and agreed upon, like website measurement and analytics.

Should the UK get anywhere with its measure, will it have bearing on how consent is managed in Europe? And since California’s and Colorado’s Privacy Laws are built on the foundation of GDPR will that impact how consent is managed in the U.S.?

The UK's effort to replace GDPR may be more of a problem than a solution, given that many businesses spent hundreds of thousands of dollars, if not more, to update to GDPR standards. Do businesses have the stomach to go through that process again, so soon after GDPR?
Sweet Tweet
Maybe It's Time to Rethink Advertising KPIs

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Sean Lane talks primarily to marketing and sales operations folks in his podcast but this episode lends itself nicely to some conversations advertising operations folks were having at #PubForum Vail about The Ideal Ad Ops Team Structure In 2021
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