Fraud in Video Advertising

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The shift to digital video advertising

The Wall Street Journal gives us key information regarding fraud in video advertising. Advertisers were expected to spend over $68 billion 2014 on television ads. With the shift of advertising dollars moving online, publishers and advertisers have adjusted their strategies on how they buy and sell online video. Of course, there are always individuals who try to game the system and ruin the digital ecosystem for everyone.

Why the shift from traditional to digital video?

  1. Keep up with changing viewing habits – We give more and more attention to online video content. In December 2012 39 billion videos were watched online. In December 2013, 52 billion videos were watched. Anyone know the data for 2014? Definitely still a huge increase.
  2. Targeting – Media companies such as Facebook, Yahoo, AOL, YouTube and the Wall Street Journal are able to approach advertisers with the promise of being able to targeting and market to granular and engaged audience segments. It is generally agreed upon that the younger generation consumes more media on their computers, laptops or mobile devices opposed to traditional cable TV. (where targeting is more broad)

Why have advertisers not fully jumped ship to online video?

Many of the “water cooler worthy” type programs still are viewed through traditional television channels. Media buyers on behalf of brands know exactly what kind of content their advertisements are being paired with. This eliminates the risk for brand advertisements to be shown alongside user generated content or any other pieces of media that a brand would not want their message to be associated with.

Video Advertising Fraud Defined

Also known as Ad scams, fraud in video advertising most often occurs unknowingly when fake traffic (robots) are sent to “view” video ad impressions on pre-roll (seen before a piece of content) advertising. Video advertising still can be considered a new frontier in the digital advertising ecosystem. Companies and integrated technology is not quite there yet and makes video buys not so easy to execute, measure and scale across all platforms.

Most often, brokers (middlemen are used) to take on advertiser budgets and media buy on behalf of the brand. Ad exchanges are used to reach the massive audiences needed to fulfill the advertisers impression and demographic requirements. Unfortunately not all traffic is “real” on ad exchanges. For example, a website can hide ad spaces by placing many 1×1 pixels on their web pages and attempt to receive credit for faulty views. They even may have web crawling robots that visit their pages to make it seem like they have a large amount of traffic.

How much is spent on fraud impressions?

As much as 25% of online ad revenue is spent on fraudulent ad impressions. This has been the Achilles heel of the industry but many strides have been made by ad tech companies to combat fraud as well as awareness campaigns like the one below in NYC.

NYC Anti-Fraud Advertisement

NYC Anti-Fraud Advertisement

Video ad spend is expected to double over the next two years from around $4 billion dollars in 2014 to $8 billion in 2015. the growth mainly depends on marketers confidence that they are getting what they paid for and not fraud impressions.