How Ad Fraud Affects Programmatic Auctions

How Ad Fraud Affects Programmatic Auctions By Kyle Smith
Since the standardization of programmatic over 10 years ago, media has been increasingly easier and easier to trade. In fact, so many advancements have been made within the industry over the past decade that taking the technology and the process for granted is pretty much not even a thought that would cross the minds of many. But in reality there are so many finite calls, requests, and actions just to monetize a singular event through a programmatic auction. The process is simple on the outside. This unfortunately means that the complexity on the inside is easy to derail, intentionally or not. We live in an era where if you have a good idea and can create great content, then plugging in a couple demand sources is a pretty trivial process. If you have a great marketing plan and want to execute a programmatic strategy, then putting that plan in motion is fairly painless. It all just works, right? Results are generated and money changes hands. Simple. Not so much. Supply and demand will always be optimized for best results, but you eventually get to a point where questions start to surface after the audiences have been fine tuned and landing pages rotated, etc. Could my fill rate be higher? These clearing prices seem low. Are my KPIs off? Well, if you’ve tried a bunch of tweaking on your end and are still having these types of questions, then you’re probably on to something. Invalid traffic (IVT) can have drastically negative effects on programmatic auctions and the worst part is that without knowing the level of exposure, then any of the answers to the above questions can be difficult, if not impossible to answer. First, we need to understand that if you’re a publisher, advertisers are paying for access to your audience. If you are instead giving them invalid traffic (which then becomes ad fraud), they can never realize a positive outcome for the particular campaign served. If you are an advertiser, buying invalid traffic ensures that your campaign goals will not be reached. So what happens in this situation? The advertiser never sees a result, which leads to a halt in bidding or decreased bidding on the publisher. The publisher then sees lower clearing rates and less fill. Both parties are then left looking for answers, pivoting and optimizing based off invalid traffic while neither are achieving the desired results. It’s easy to see that invalid traffic and ad fraud not only causes a host of financial damages, but will also cause a lot of time to be wasted as well. The simple answer is to know your exposure level and then block out IVT in real-time before it can create problems. There are many other undesirable outcomes related to invalid traffic such as reputational hits, relationship damage, clawbacks, and even permanent bans. Detecting and preventing ad fraud is definitely worth it for any player that touches programmatic. About Kyle: I started one of the leading ad networks in the early 2000s. After the dawn of programmatic, we became an SSP and went on to host billions and billions of monthly openRTB and header bidding auctions. Over the past 20 years, I've worked with many exchanges, thousands of direct publishers and advertisers of all sizes, and have seen the effects of ad fraud firsthand. Today, I run escalated.io We help individuals and companies across the entire spectrum of adtech detect invalid traffic and prevent ad fraud within multiple mediums including display, video, mobile, app, and CTV.
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By Kyle Smith

Since the standardization of programmatic over 10 years ago, media has been increasingly easier and easier to trade. In fact, so many advancements have been made within the industry over the past decade that taking the technology and the process for granted is pretty much not even a thought that would cross the minds of many. But in reality there are so many finite calls, requests, and actions just to monetize a singular event through a programmatic auction. The process is simple on the outside. This unfortunately means that the complexity on the inside is easy to derail, intentionally or not.

We live in an era where if you have a good idea and can create great content, then plugging in a couple demand sources is a pretty trivial process. If you have a great marketing plan and want to execute a programmatic strategy, then putting that plan in motion is fairly painless. It all just works, right? Results are generated and money changes hands. Simple. Not so much.

Supply and demand will always be optimized for best results, but you eventually get to a point where questions start to surface after the audiences have been fine tuned and landing pages rotated, etc.
Could my fill rate be higher? These clearing prices seem low. Are my KPIs off?

Well, if you’ve tried a bunch of tweaking on your end and are still having these types of questions, then you’re probably on to something.

Invalid traffic (IVT) can have drastically negative effects on programmatic auctions and the worst part is that without knowing the level of exposure, then any of the answers to the above questions can be difficult, if not impossible to answer.

First, we need to understand that if you’re a publisher, advertisers are paying for access to your audience. If you are instead giving them invalid traffic (which then becomes ad fraud), they can never realize a positive outcome for the particular campaign served.

If you are an advertiser, buying invalid traffic ensures that your campaign goals will not be reached.

So what happens in this situation? The advertiser never sees a result, which leads to a halt in bidding or decreased bidding on the publisher. The publisher then sees lower clearing rates and less fill. Both parties are then left looking for answers, pivoting and optimizing based off invalid traffic while neither are achieving the desired results.

It’s easy to see that invalid traffic and ad fraud not only causes a host of financial damages, but will also cause a lot of time to be wasted as well. The simple answer is to know your exposure level and then block out IVT in real-time before it can create problems.

There are many other undesirable outcomes related to invalid traffic such as reputational hits, relationship damage, clawbacks, and even permanent bans.

Detecting and preventing ad fraud is definitely worth it for any player that touches programmatic.

About Kyle: I started one of the leading ad networks in the early 2000s. After the dawn of programmatic, we became an SSP and went on to host billions and billions of monthly openRTB and header bidding auctions. Over the past 20 years, I've worked with many exchanges, thousands of direct publishers and advertisers of all sizes, and have seen the effects of ad fraud firsthand. Today, I run escalated.io We help individuals and companies across the entire spectrum of adtech detect invalid traffic and prevent ad fraud within multiple mediums including display, video, mobile, app, and CTV.

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