advertising

Marketers are losing millions of dollars to fake ad slots on streaming platforms

According to a new report from a digital ad measurement firm, the “phantom ad requests” are coming from potential bad actors who pocket the money.
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Photo by Giorgio Trovato on Unsplash

3 min read

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Apparently, streaming fraud goes a lot deeper than sharing your Hulu password with your roommate. According to a report by Method Media Intelligence, a digital ad measurement firm, one group of bad actors has been able to scam as much as $10 million a month from ad budgets that were supposed to go toward connected TV, or CTV, like streaming platforms.

Here’s how they do it: The five-person team identified by MMI inserts itself into the programmatic bid stream by posing as a platform (is Fraud+taken?) like Hulu, and submitting “phantom ad requests.” And media buyers fall for it—or, at least, pay for it, according to MMI, which declined to tell Marketing Brew how it found the perpetrators.

“They are fabricating the existence of an ad slot,” explained Shailin Dhar, CEO and founder of MMI, to Marketing Brew, noting that “there are a lot of buyers desperate to show they bought CTV,” even if an ad never ran.

Watch me if you can

MMI estimates that as much as 50% of programmatic requests in connected TV are counterfeit. The firm says they are tracking at least 20 other similar operations. That’s a lot of 💰.

  • Instead of calling out the bad actors to shut down any potential scam, MMI, which makes its money from snooping out this kind of fraud on behalf of clients, is hoping to shed light on the technique used to rob marketers of their $$.
  • At the end of the day, the CTV platforms are still making money. “The demand is always there…It’s not like buyers buy less because that one scam operation isn’t making things available for sale anymore,” said Dhar. “This entire marketplace runs on advertisers’ budgets.”

In the CTV space, advertisers still rely on the platforms themselves to verify impressions, reach, and if an ad actually ran, according to Dhar. A key way to root out fraud would be a shift toward “a validated currency with some integrity behind it,” he said, like Nielsen metrics for traditional TV.

To avoid fraud, Ira Maher, VP at integrated marketing and advertising agency The Basement, doesn’t work with a verification partner, but does try to spend ad budgets directly with a streamer, as opposed to buyingthrough third parties. He says no measurement company has “cracked the code” to provide the industry with reliable metrics.

“There’s no question that fraud is an issue, exacerbated by the opacity of the CTV marketplace in general,” Maher told Marketing Brew. “The industry has grown so quickly in the last year that the necessary architecture just isn’t in place.”

Zoom out: CTV is billed as the new frontier of advertising, as it merges the best of linear TV (Seinfeld) with automated ad delivery that’s personalized for viewers. But for now, it still appears to be the Wild West.—RB

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