Publishers are losing up to $1.27bn a year due to fraudsters impersonating their inventory on ad exchanges, with such bad actors conducting up to 700m false ad requests per day, according to a study published today (December 12) by Google.
The study found that publishers were losing up to $3.5m a day based on a valuation of $5 video CPMs, due to fraudsters ‘spoofing’ their web domains on ad exchanges, with the total loss to premium publishers equating to over $1.27bn a year.
Looking at the total available inventory across all exchanges for the 26 web domains, the study found video callouts were overstated by 57 times the available inventory; representing about 700m counterfeit callouts per day. The study also found that display inventory callouts were overstated by four times the available amount, representing billions of counterfeit callouts per day.
Google conducted the study with a host of premium publishers such as Business Insider, Turner and the Washington Post along with adtech outfits Amobee plus Quantcast, concluding that high value video CPMs now the preferred hunting ground for fraudsters.
Counterfeit impressions is created when a bad seller replaces the URL of a low quality site with a premium publisher URL, or a fraudster creates fake impressions and labels them with a high quality publisher’s URL.
The counterfeiters then send their fake inventory to auction at multiple exchanges and supply-side platforms (SSP), without the knowledge of the publishers they’re impersonating, to trick advertisers into thinking they are buying premium publisher inventory.
The IAB Tech Lab has begun combating such activity with the rollout of its ads.txt initiative, which means participating publishers publicly list the authorized resellers of their inventory which demand-side platforms (DSPs) can then use to discern between legitimate and bad actors.
The study concluded that marketers looking to execute efficient, brand safe programmatic campaigns should start demanding that their campaigns run only on authorized inventory, as defined by publishers’ ads.txt files, and encourages advertisers to work more directly with their preferred publisher brands.
Dennis Buchheim, senior vice president and general manager, IAB Tech Lab, said the results of the study confirm that ads.txt needs to be adopted as rapidly as possible to cut off the flow of counterfeit website inventory.
He added: "It is critical that the industry comes together to put a stop to criminal activity and secure the health of the supply chain."
Jana Meron, vice president of programmatic and data strategy at Business Insider, added: “If the industry is going to seriously take on counterfeit inventory, publishers need to immediately get behind ads.txt otherwise this problem will linger and continue to hurt both brands and publishers.”
Jason Baron, SVP of direct marketing and programmatic for Turner Ad Sales, added: “Ads.txt is a strong answer to the digital marketplace’s clarion call for greater transparency, ensuring marketers have verified access to high-quality video and display inventory. We’re hopeful on its wider adoption, as well as continued industry support of upstanding publishers and delivering greater results for advertisers.”
Publishers in the study reported using, 12 exchanges with 28 accounts to sell display, and two exchanges with six accounts to sell video on average, but the DSPs found their inventory available across 22 exchange and 129 accounts for display and 26 exchanges across over 1,000 accounts for video on average.