As you are likely aware, over-the-top (OTT) television expenditures are rising incredibly fast. According to Magna Global, OTT grew at a rate of 39% this year with advertisers spending $3.2 billion in this sector of the TV marketplace. Further, Magna is projecting spend levels of $5.0 billion in 2020.
As consumer demand for viewing video content via the internet on devices such as smart TVs, gaming consoles, laptops, tablets and smart phones continues to escalate, advertisers are jumping at the opportunity to reach these so called “cord cutters.” However, while advertising demand is strong the supply of OTT impressions or inventory is limited.
This scenario has created an opportunity for fraudsters that attempt to fool advertisers into buying OTT inventory that doesn’t actually exist. eMarketer estimated that in 2018 fully 1 out of 5 OTT impressions were invalid due to “a combination of fraud and ad serving measurement errors.” Compounding this issue is the fact that approximately 40% of OTT ad impressions are served via server-side ad insertion (source: AdLedger, 2019) thus rendering traditional fraud detection services, which rely on Java script, ineffective.
One cannot help but view this scenario and its similarities to the challenges and risks associated with programmatic digital media and real-time bidding. Sadly, the ad industry’s demonstrated willingness to latch on to “shiny new objects” comes with real risks and at a significant cost. Worse, once the proverbial genie is out of the bottle, the industry has demonstrated an inability to marshal its resources in a timely, efficient manner to create standardized measurement and tracking solutions to combat fraud and safeguard advertiser funds.
And, as with the meteoric growth of digital advertising, advertisers are all too willing to jump in, versus testing the waters or forgoing investing in these emerging channels while fraud prevention controls are introduced, tested and rolled out. The net result is that advertisers must spend more money spent on ad tech, fraud detection and viewability services, while the downward pressure on working media dollars multiplies.
Earlier this spring, Forbes published an article on ad fraud and the OTT market, in which it interviewed Adam Helfgott, CEO of MadHive. Mr. Helfgott identified a range of ways in which OTT ad fraud can manifest itself. These included fraudulent arbitragers misrepresenting where an advertiser’s impressions actually ran and app-based or device-based fraud which report uncharacteristically high activity levels, not reflective of human consumption patterns.
While Mr. Helfgott believes that OTT ad fraud can be combatted using blockchain-based technology, he suggested that the first step in the process is for industry stakeholders to acknowledge that OTT ad fraud can and is occurring. That said, it is scary to think that there are those who would believe otherwise.
If knowledge truly is the key to success, then perhaps the ad industry would benefit from Austrian philosopher, Ludwig Wittgenstein’s words of wisdom:
“Knowledge is in the end is based on acknowledgement.”