Ad fraud in OTT is real, and AdLedger wants to be the leading force to slow it down

AdLedger wants to use blockchain to combat emerging fraud in OTT

Just because it’s on a TV screen doesn’t mean it’s safe from fraud.

AdLedger, a non-profit consortium using blockchain and cryptography to fight fraud, has been working to educate the marketplace on just that since its formal launch in January 2018.

To continue those efforts, AdLedger released a report today (10 July) showing that 18% of ad requests for over-the-top (OTT) inventory are fraudulent.

AdLedger executive director Christiana Cacciapuoti said the reason the group put the report together was because “we had heard a lot in the market of this notion that people think universally there is no fraud in OTT”.

“The mechanisms for buying OTT are very different than the mechanisms you would use to buy linear, and they much more closely mirror digital than linear,” Cacciapuoti told The Drum. “A lot of the same fraud schemes are present in OTT that there are in digital, but with a slightly different twist to accommodate for the differences in platform.”

The report found that the common types of fraud on OTT are similar to what occurs in digital: device-based fraud, when a single device reports a high number of ads in a given time period; app-based fraud, when the same OTT app shows a high rate of activity around the clock; and misrepresentation, which is similar to domain spoofing in digital.

Cacciapuoti said fraudsters are taking advantage of the OpenRTB protocol, the standard for transacting media created in 2010 before digital and TV truly converged.

“Streaming wasn't really a thing in 2010, said Cacciapuoti. “How is the protocol able to adapt to that?”

While Cacciapuoti acknowledged that the industry will always have to catch up with the latest fraudulent schemes, she did say there are ways to play offense. AdLedger’s tactic is through blockchain and cryptography.

“We obviously believe those are tools that we've never had before and we've never really integrated into our workflows as an industry,” said Cacciapuoti. “As you innovate, you create new situations and… you might have to do a bit of swerving to catch up with fraudsters, but I think cryptography and blockchain are relatively new tools that if we implement them correctly into advertising, we will be able to have a better handle on fraud prevention.”

Other companies are beginning to form partnerships that address fraud on OTT. Both Integral Ad Science and Oracle Data Cloud have started separate measurement initiatives that track ad completion and invalid traffic on connected TVs.

Cacciapuoti said those partnerships help bring needed attention to fraud in OTT, but they’re ultimately commercial products, whereas AdLedger’s status as a non-profit hopefully acts as a differentiator.

“AdLedger’s constituency is structured to empower who we see as the true stakeholders of an advertising transaction, which are the publishers, agencies and brands,” said Cacciapuoti. “Technology providers are welcome to join and participate… but they don't get a vote, and that is specifically to encourage innovation.

“I think a lot of times the issues that trade groups run into... is that when you have existing incumbents in the room, it can be hard to innovate because everybody's worried about, 'well how does this impact my business,' and 'if we open source this particular part, does this make my business obsolete,' and there's that push and pull of tension. That's really why we designed the bylaws the way that we did was to focus on the end users.”

The Hershey Company, Omnicom Media Group, IPG’s Reprise, Hearst Television, MadHive and Beachfront Media all contributed to the report.

According to Magna, another IPG subsidiary, OTT ad spend in 2018 increased by around 40% to an estimated $2bn since the year prior.

MadHive found that average CPMs on OTT run between $20-$25, and BeachFront Media estimated that the open auction contains about five million OTT impressions on any given day.

“Many of our demand partners seem to think that you can’t buy OTT inventory in the open auction,” Frank Sinton, president of supply-side platform Beachfront Media, said in the report. “Although it’s true that OTT’s relative scarcity in the programmatic ecosystem makes publishers more likely to sell it in private marketplace deals, there is still plenty to be found on the open exchange.”

AdLedger noted that a similar report from advertising analytics firm Pixalate found a 19% fraud rate across global OTT inventory.

"In digital and social economies, the major platforms and ad tech companies walk away with much of the publisher's audience value,” said Jonathan Sumber, vice-president of digital sales at Hearst Television. “Our hope is that blockchain technology brings some balance back to this relationship, in both advertising and the surfacing of authoritative/trusted content.”

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