One of the root causes of fraud in the programmatic ecosystem is the increased length of the supply chain, compared to traditional media. With so many new intermediaries between the advertiser and the publisher that will ultimately run the ad, it can be difficult for marketers to even know who owns the media they’re buying. But a new proposal under discussion at the Interactive Advertising Bureau (IAB) Canada may go a long way to increasing transparency in programmatic transactions, and limit the kinds of fraud that less-scrupulous players are able to perpetrate.
The information that sellers must provide about themselves when holding an auction on an ad exchange is surprisingly slim. Most required information has to do with ad specifications — the size, format and placement (above- or below-the-fold). As far as self-identification, all that’s usually required is the name of the domain where the ad will run, like YouTube.com or AOL.ca.
It’s relatively easy for bad actors to counterfeit legitimate domains — claiming their ads are running on YouTube or Facebook, but redirecting them to a copyright pirate site or a ghost site riddled with bots. Even more nefarious are “ad injection” schemes, which (through malicious add-ons or toolbars that unsuspecting users install) insert extra ads on legitimate websites when the user visits them. Although these ads are in fact running on the legitimate domains they advertise, the publisher that owns the site isn’t seeing any of the revenue — it goes instead to whoever programmed the toolbar.
Without knowing who the seller is, it’s difficult for buyers (and their programmatic algorithms) to separate fake inventory from the real deal.
One way to resolve this situation could be to make sellers give more information about themselves when they post impressions for auction on the exchanges. That’s the route suggested by Andrew Casale, vice-president of strategy for Casale Media, a supply-side technology platform that licenses the technology to run ad exchanges. In a recent column for Ad Exchanger, Casale outlined a “Seller ID” system that would require auctions to include the name of whoever gets the check after the impression is sold. Buyers could put a real company’s name to the impression, giving them an extra layer of accountability. They could also compare the domain name with the payee, which would make it fairly obvious when an ad injection company is trying to hock inventory on someone else’s site.
“If you see the URL is TheStar.com, and you bid on it, you assume that you’re transacting with the Toronto Star,” said Casale in an interview with AD-Vantage. “It would be a whole lot better if the URL was TheStar.com, and the payee — person responsible for the business transaction — is the Toronto Star… Today it’s not like that, but hopefully we can get it there.”
Such a system would be simple to implement, since marketplaces must already have payee information in order to make payments to publishers. A few additional lines of code added to the IAB’s OpenRTB framework could do the trick, Casale said. Exchanges like Casale’s Index Exchange would then have Seller ID enabled by default.
IAB Canada president Chris Williams informally supported the idea in a recent column, adding that an organization like the IAB could set standards for information that exchange sellers must provide to make sure it was coherent across all open and private exchanges. Auctions could include additional details, like a physical location and contact address for the seller. Seeing a premium Canadian impression sold out of Bermuda could be another key warning sign for buyers.
Who’s at the bottom of the daisy chain?
Seller ID would have one major weakness: the seller on an exchange is often not the ultimate owner of an impression. Some networks buy impressions on exchanges and then re-sell them for a slightly higher price elsewhere; indeed, impressions can be resold several times before reaching the buyer. That’s one of the reasons for the distance between buyer and seller — fraudulent impressions can often get picked up by legitimate networks, and unintentionally laundered before they reach the buyer.
John Murphy, vice-president of marketplace quality for OpenX, another major ad exchange, drew attention to this flaw. “It’s only going to be possible for most exchanges to go one layer deep,” he said. “It could be there are four, five, six different entities in the chain, and we’re only going to have insight into the entity with which we have that direct relationship.”
However, he says OpenX and several other exchanges have limited the number of times an impression can be resold, effectively banning reseller daisy-chains. That would mean the buyer is at most one link removed from the ultimate seller — and with a seller ID, buyers would have someone to call who knew where their inventory originally came from.
Regardless, Murphy said, seller ID is a step in the right direction. “The interest of promoting transparency in the ecosystem far outweighs any downsides,” he said
The IAB’s Williams addressed the daisy-chaining issue by suggesting a tiered classification system for inventory. Inventory that was sold directly by the media owner, with a payee ID and no purchased traffic, would be tier 1 – the highest quality inventory available. Inventory that was sold by a first-degree network with a payee ID would be at a lower tier. Inventory with no payee attached, or multiple network links, could be tier 4.
The idea, Williams says, is to give buyers a sense of how transparent the media they’re buying is — and how much they should be willing to pay for it.
“Some buyers want to buy blind, because they want to buy really, really cheap media,” Williams said. “It’s dangerous. You take on a risk for the price to be really low.”
Some exchanges may cater to those buyers, he said. “The exchanges don’t all necessarily have to be the same. If there’s a very strict exchange that has a very high level of transparency, it will attract a certain type of buyer and a certain type of seller. Other exchanges will be different.”
Building barriers to fraud
No one should expect Seller ID to put a final end to fraud, said Casale. Committed fraudsters will find their way around it, just as they’ve found their way around every other security measure that exchanges and buyers have added.
But the point, he said, is that an added layer of transparency makes fraud incrementally more difficult. Forging a domain is easy. Forging a legitimate-seeming company, while not exactly difficult, adds considerable time and energy. If fraud becomes costly enough, then the economics will no longer make sense for fraudsters — and the industry will see drastically fewer of them.
Williams said the idea is still in its early stages, and will need to be investigated extensively by the IAB before any formal proposal could be put forward. Without a standard for seller information, exchanges would likely be reluctant to implement the system on their own. Moreover, demand-side platforms likely wouldn’t make the updates required to capture and display that information, unless the system was widely implemented.
Nonetheless, Williams was enthusiastic about the idea. Although many of IAB Canada’s initiatives originate with the unaffiliated IAB in the U.S., this could be a could be a chance for the Canadian industry to provide leadership and implement a home-grown solution.