Media Transparency: Perspectives on Ad Fraud, Ad Blocking, Viewability and Programmatic Advertising

February 4, 2016

Part 1 of AAM's Guide to Media Transparency sets the stage with overviews of the four main industry issues: programmatic advertising, ad fraud, ad viewability and ad blocking.

Susan Kantor, Director, Marketing and Communications

Digital advertising hit a record-high total of $60 billion in 2015. Today, it's growing six times faster than traditional advertising and is expected to overtake TV advertising in spend in 2016.

The pace of change isn't going to slow any time soon. With this change, concerns about online ad fraud, ad blocking, invalid traffic, lack of programmatic advertising transparency, ad viewability and overall brand safety continue to rise from all sides of the industry. With a fast-paced, increasingly automated environment, marketers, media agencies, technology companies and publishers all need to build more accountability and media transparency to foster trust to secure a strong industry with long-term market appeal.

For AAM’s Guide to Media Transparency, we talked to leaders from all sides of the industry to answer that question and many others that stem from it. Over the next few weeks, we’ll release sections of the guide that will delve into these topics, share, and outline questions to ask your industry partners. The collection will give you the practical advice needed to be confident that your organization is transacting with trust.

In this first section, we set the stage with overviews of the four main industry issues: programmatic advertising, ad fraud, ad viewability and ad blocking. Let’s take a look.


Programmatic Advertising: Technology Takes Control

Programmatic advertising has revolutionized advertising, bringing efficiencies, cost savings and audience targeting. It’s also expanding to more traditional media. Time Inc. was the first to pioneer print programmatic advertising. McClatchy, for example, has an in-house programmatic advertising team and also works with the Local Media Consortium for programmatic selling.

“It’s one of the fastest growing revenue categories for us,” explained Dan Schaub, corporate director of audience development at McClatchy. “We’re always looking for services, solutions and features that make it easier to meet needs of retailers and advertisers.”

But while automation brings efficiencies, it’s a complicated process that happens quickly and involves many third parties. When ads are sold and bought in milliseconds, how can each side of the industry better understand what they’re getting? Part 2 of the guide looks behind the scenes of what really happens in the programmatic advertising environment.

U.S. programmatic digital display ad spending grew in 2015 to $15.4 billion.


Ad Fraud and Piracy: The Cost of Online Corruption

Because the programmatic advertising environment is automated and complex, there are ways for the systems to be tricked and ad fraud can tend to creep in with falsified traffic and inventory.

The IAB and EY recently released a study that detailed the cost of corruption to the digital ad industry. The combined impact of ad fraud, invalid traffic, infringed content and malvertising cost the U.S. advertising industry $8.2 billion each year, lowering ROI for advertisers and revenues for publishers. Industry organizations such as AAM, IAB, MRC and TAG are working on a number of projects to fight ad fraud, piracy and malware.

“This should not be something that becomes a point of difference from one player to another,” said Joe Barone, managing partner at GroupM. “We should all be doing this together as an industry solution. Those pirates can survive without our (one player’s) money, but not without everybody’s money.”

In Part 3 of the guide, we look closer at the industry’s game plan for fighting back against ad fraud, how the various initiatives fit together and what you should know about them.

Invalid traffic, infringed content, and malware make up the $8.2 billion lost to fraud.


Bringing Clarity to Viewability Measurements

The transition to viewability transactions was a major industry initiative focus over the past few years. As viewability becomes the currency, what does that mean for the overall state of media transparency?

"We’ve seen definite increases in viewability rates,” Barone said. “Publishers are redesigning sites to optimize viewability, and reconciling on viewability numbers. Viewability has moved into the mobile space with in-app ads. There has been tremendous progress in viewability. I think you’d be on an island as a publisher if you’re not transacting—or at least reconciling—with viewable impressions.”

The conversation about viewability has progressed from the perspective of Cynthia Young, head of audience at The Globe and Mail, as well.

“The MRC has made statements about what is viewability, what does it look like on display, what does it look like on video,” Young said. “We actually have numbers against those pieces so we’ve really come far in the conversation. When we think about our agencies and the terminology used by the junior planners and buyers, they are becoming much more accustomed to asking the questions so it’s obviously becoming a part of what we do.”

What’s next for viewability? There is still work to be done in eliminating non-viewable inventory, defining the digital GRP for cross-media comparability, and creating mobile ad viewability guidelines. Part 4 takes a deeper look.

90% of newspaper publishers are not fully confident that their digital working media meets industry viewability standards.


Ad Blocking and Beyond

While ad blocking is not a new concept, it’s becoming mainstream. Intrusive ads that eat into users’ data plans, increase load times and bring up privacy concerns have caused nearly 200 million users to install ad blockers. According to a 2015 PageFair report, U.S. ad blocking grew by 48 percent to reach 45 million active users in 12 months up to June 2015.

“Ad blocking actually offers the industry an opportunity to get its act together,” explained Ted Boyd, CEO of Sandbox Advertising. “We would have continued going down very bad governance pathways if we hadn’t been told that people are now voting with their eyes and saying, ‘We would rather have an experience without ads at all than to be forced to deal with an ever expanding array of ads that whistle, squeak and take forever to load.’”

Publishers and advertisers are taking different approaches to address the ad blocking issue. At McClatchy, the team focuses on consumer and advertiser feedback to develop products with the user at the center of the design. Schaub explained: “For us, it’s more about the consumer experience and trying to truly understand what consumers want. As we customize products for consumers—a morning briefing, an afternoon recap—we ask what do they want for content? How do they want to connect with us?”  

Part 5 gives more examples of how publishers and advertisers are stepping up to take on ad blocking.

Ad blocking's estimated cost to publishers during 2015 was $22 billion.


The Takeaways

Throughout the series, keep in mind these 10 steps to media transparency that ultimately lead to a transaction built on trust.

All of these issues have a major effect on digital advertising. The good news is that the industry is vibrant and growing, and smart people are working to clean up the issues, improve fundamental business practices and educate the next generation of media professionals. And as an organization that represents all sides of the industry, AAM helps provide information to help work on those solutions. Contact us to learn more.

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