“The video advertising industry has a problem with, and there’s no other word for it — fraud,” says Matt Timothy, President of Vindico, whose video ad management company recently launched Adtricity, a verification and viewability tool. “We’re not calling out ad networks or saying ad networks are bad. But with the pressure to deliver, some ad networks end up buying inventory from folks who have bought it from other folks, who in turn have bought it from other folks. And it ends up on a soft porn channel in Tunisia somewhere, or perhaps on a ‘ghost site’, which are essentially impression mills that trade in viewerless impressions. And there are a lot more of these than you would think.”
While Timothy has a new product to sell, you do get the sense he’s genuinely frustrated with what’s happening in the industry he helped to create. Prior to working with Vindico, Timothy once worked in TV at CBS Interactive, where he says he was one of the people who realised early on that the future of TV was online. But even now, he thinks video still has much to learn from TV. “There are a few things that happen in television that we on the digital side simply don’t do as well.” he says. “For example, we don’t tell you who watched it, TV does. In the US, Nielsen will tell you, for example, how many adult males, 18-34 or 35-49 you reached. So they can tell you who watched it and how many watched it. Yes, it’s an estimate and to a certain degree it’s a faith-based measurement, but it works and an entire media economy is based on it.”
“Another thing TV provides without fail is the consistency and the excellence of its execution,” he adds. “There isn’t a TV buyer in this country, the EU or anywhere else that says, ‘I bought this channel and I’m not sure where the ads are going to show up, so my ads might appear on a porn channel somewhere else’. It simply does not happen. But this happens every single day in the online video space,” he says.
Fraud Can Only Exist in the Dark
“If you’re going to tell a story, and improve on the storytelling we see on TV, the quality of the story is controlled by the advertiser. They have full control over the concept and the production of the creative. But the quality of the execution of that story — and who that story gets told to — in the digital space that’s out of their control. And that grey area, in that darkness, is where the fraud takes place. Fraud can only exist in the dark. It can’t exist in the bright light, and TV is currently the bright light where it’s currently very difficult to commit this kind of fraud.”
How fraudulent practices managed to find their way into the industry is a story that’s impossible to disentangle from how the history has evolved. This is a story Timothy is well placed to tell. Vindico was one of the industry’s first video ad servers and was built in 2007 by an ad network called BBE. Getting to market early paid off and Vindico, which is Latin for ‘delivery’ or ‘to deliver’, now has holding company agreements with five of the six major agency holding companies in the US. Timothy says that on any given day about 40% of the market flows their ad servers.
Having that vantage point gave Vindico a vantage point from which it was relatively easy to see what was fuelling fraud: the root of the problem was too many ad networks competing for a small pool of video inventory. “It’s not hard to start an ad network,” says Timothy. “You need good sellers, a good pitch, a handful of good sites, and you can quickly start competing for impressions and budget. In 2010 there were 50 ad networks that we served into on top of all of the premium publishers and destination sites. In 2011 we had 100 ad networks and in 2012 we had 128 ad networks. So you’re seeing an enormous increase on the sell-side, which isn’t necessarily matched by an increase in inventory, so all of a sudden there was an incentive to find creative ways to generate impressions.”
How They Do It
Fraud takes place in few different ways and with varying degrees of severity, and it’s impact is felt right across display and video advertising. You have ‘ad injectors’, which are browser plugins that hijack ad calls and display the fraudster’s ads instead. If you’ve ever seen seemingly hand-drawn ads for teeth whitening or belly reduction on sites where they look out of place, the chances are you’re looking at an ad injector’s handiwork.
Another tactic used by fraudsters serving masses of fake impressions by serving an entire web page — complete with multiple ad units — into a single ad unit, or into ad units that are impossible to see via the viewport. Then the page is often set to automatically refresh on multiple tabs, thereby driving massive amounts of traffic over short periods of time.
Finally, there’s “stacking”, where multiple ads are served one on top of the other, even with video ads that play in sync with one another. Similarly, sometimes multiple auto-play ads are being shown at the bottom of a page where nobody is likely to be looking.
Enter the Viewability and Verification Tools
To help combat these problems, Vindico has created Adtricity, which indexes advertisers and publishers and grades them according to past behaviour. So, for example, with publishers Vindico would look at the viewability of the ad units, the quality of the content, the execution of the ad and the site’s main traffic sources.
Vindico collects the data from a variety of sources, as Timothy explains, “There are three legs to our stool, and two of those are commonly used by verification companies. We use a panel that currently stands at around 800,000 users and is on its way to around one million users, which monitors the browsing behaviour of users. Secondly, from that panel we can then send a crawler to get screenshots to understand what’s happening on that site. And the third thing we’re able to add is the ad serving pixel, which can summon a crawler, but it also gives us the ability to see the entire campaign, how that campaign was run across wherever it ran, how it was handled, and match it back to the campaign goals.”
“Those three things set us apart from everyone else,” he says. “Everyone else in the verification space has focused on display, and switching from display to video is very difficult, because you have to also deal with the player. They also tend to be inventory owners and they’re doing it to grade their own inventory. So we realise that by being a third party, by having a great and trusted relationship with all of our advertisers, that we were in a decent position to do this.”
Adtricity is entering what has become an increasingly crowded market. Many of the ad tech vendors have already launched verification and viewability services of their own, although the fact that Vindico is relatively removed from the inventory should stand it in good stead in an industry that appreciates the need for independent third party verification.
[Clarification: Vindico is an independently run part of Specific Media, who run an ad network and own MySpace. While VAN has no reason to question that independence, it was an editorial oversight to not make that fact more clear for the purposes of this article.]