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Ad fraud driven by poor procurement culture says VivaKi boss

06 Oct 2014  |  David Pidgeon 
Ad fraud driven by poor procurement culture says VivaKi boss

As the industry wakes up to the sheer scale of online advertising fraud, Marco Bertozzi, VivaKi's president of audience on demand, EMEA, has said the root of the problem is procurement departments that push agencies to chase increasingly lower CPM rates.

The boss of Publicis' ad tech solutions business said that the entire procurement model is in disarray and forces media agencies to buy cheap, low quality and high risk inventory from online "cesspools" filled with ad fraud.

Speaking at MediaTel's Automated Trading Debate on Monday (6 Oct), Bertozzi said: "We have a situation where every day advertisers, procurement departments and auditors are pushing agencies to buy cheaper and cheaper inventory. The only sign of success is a lower CPM year on year.

"The idea of value doesn't seem to have any resonance...the whole procurement model is a mess."

Bertozzi said that as cost saving initiatives begin with procurement departments, tackling a culture in which measurable value is discarded in favour of using cheap inventory (where ad fraud is likely to operate) is only feeding the problem.

Forecasts suggest, globally, ad fraud could cost marketers as much as $11 billion in 2014, a 22% increase over 2013.

The problem came to prominence in May after a story in the Financial Times revealed that an online Mercedes ad was viewed more often by automated computer programmes - 'bots' - than by human beings.

Marco Ricci, CEO of Adloox, an ad verification company, has said that online ad fraud is now a bigger issue than 'viewability' or brand safety.

"It's more concerning because it's very, very clever," he said. "Publishers are also underestimating the scale of the problem because they are often blind to it.

"Fraudsters are able [to mimic] different websites. You think you're viewing a top premium site, but someone is manipulating that to sell it to someone else."

The solution, both Bertozzi and Ricci argue, is to place a renewed emphasis on value and adequate measurement as well as higher pressure from advertisers to only use premium quality inventory.

"We should not be fishing in these cesspools," Bertozzi said. "Don't accept a £4 CPM from a video ad network and then say it's quality - it's not."

Paul Longhurst, founder of Longhurst Communications, an advertising consultancy, said the industry has not helped itself by being so slow to tackle the problem.

"If you look at the IAB [Internet Advertising Bureau], they've developed a code of practice and I think there's a good understanding within the industry that this is a real problem and I think the guidelines, the principles and policies are gradually coming into place," he said. "It's just not going fast enough."

In the US, the IAB, 4A's and ANA last week announced plans to create a first-of-its-kind cross-industry accountability program designed to fight ad fraud, malware and the piracy of intellectual property, in an effort to increase marketplace transparency in the US.

Established as a jointly controlled body, with its own board and leadership, the organisation aims to "operationalise principles around the critical issues that face the industry in this arena."

AOL UK's managing director, Noel Penzer, whose business publishes The Huffington Post, TechCrunch and MyDaily, said ad fraud is a growing concern and that he is now looking at the UK's IAB for guidance.

IAB UK told Newsline that it is currently in talks with the US team about taking action in the UK, and that it hopes for a clearer picture in the coming months. The IAB added that any proposals made will require further agreement from JICWEBS.

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Tom Denford, CEO, ID Comms on 10 Oct 2014
“It's a daft thing to say, that agency bad practise is procurement's fault. That one has been peddled out for years, probably way before digital even existed. Agencies have an important role to play here, considered by their clients as experts in their fields and paid good money to work fully in the interested of the client, they need to be addressing any bad practice in the market which is a threat to value (whether that be fraud, viewability or even bad procurement processes) and not blame the client themselves. The industry, especially digital trading, would benefit from a ceasing of the finger pointing and blame culture which has so far undermined all the positive aspects of technology's impact on marketing performance. A general cloud of distrust is damaging to all, it would be nice to hear these guys at their incessant digital conferences talking constructively about how they are using their considerable expertise, scale and vision to improve trust and standards for marketers in this space.”