Supply Chain Accountability and Advertising Fraud: A Report on the 2014 IAB Ad Ops Summit

Earlier this week, I attended the IAB Ad Operations Summit. The spotlight theme was “transformation,” but the real focus was cleaning up the advertising supply chain, combating fraud, and identifying more streamlined ways to accurately measure ad performance. Throughout all of the presentations was the underlying message of collaboration and industry buy-in. Just as standardization is impossible unless everyone is committed to following the same standards, cleaning up the supply chain is impossible unless everyone agrees to identify and shut out disreputable players.

Sharks in the Water

The conference opened up with presentations by David Hahn, senior vice president of product management at Integral Ad Science, and Andrew Casale, vice president of strategy at Casale Media. Both spoke about the importance of cleaning up the digital advertising space.

Casale’s presentation focused on the porous nature of the advertising supply chain and ecosystem that results from the complexity of the ad placement process. Casale lamented that the many different avenues for disreputable actors to reenter the space under different company and domain names has left the industry “playing whack-a-mole.” Identified fraudulent domains more than doubled from August to September this year, and when one is shut down, the operators can just buy another and be back in business.

The ease of relaunching a business with new names with new domains is part of the difficulty with relying on domain whitelists and blacklists. We see this kind of behavior all the time throughout the advertising space, but with domain-based lists, the buck stops at the URL.

Ideas for Improvement

So, what’s the solution? Casale advocated identifying the actors and organizations behind the domain—“the name on the check,” as he put it—and tracking those to shut out bad actors from the supply chain once and for all.

I’ve personally leveraged the results of background investigations into companies and key stakeholders, using due diligence practices to uncover counterfeiting rings, domain squatting organizations, and serial compliance violators. Applying the same kind of practices to third parties in the advertising space could give us the edge we need to combat any number of problematic practices at the source.

Scott Spencer, director of product management at Google, pinpointed trust as the key to ecosystem sustainability. During his talk, he pointed out ad networks and exchanges, saying that they needed to take more responsibility for detecting bad actors and shutting down fraud, while calling on publishers to screen and remove bad traffic—lest they be labeled untrustworthy.

Steve Guenther, vice president of auditing for ImServices, Alliance of Audited Media, weighed in on the importance of accountability and transparency, offering up the concept of “trust but verify” to ensure that partners are operating as they should. After all, the bad actors aren’t going to present themselves for certification. So, we need to root out the bad actors through verification. “We need to hold each other accountable to industry best practices,” he commented.

However, Spencer cautioned that this kind of approach can’t be successful without concerted action on behalf of the entire industry. “Until we decide to cut bad practices off,” he stated, “we just create more opportunity for bad inventory and fraud.”

Spencer also proposed a three-step fraud-fighting process:

– Stop buying bad traffic;

– Monitor activity in the market; and

– Invest in trying to solve the problem.

It’s this last step—investment—that will likely pose the most problems within the industry because properly vetting every third party in the ecosystem is a significant undertaking—one that each value chain member will try to pass off onto any other segment but their own.

A Framework for Success

One of the biggest steps toward supply chain integrity is the establishment of the Trustworthy Accountability Group (TAG), formed as a cross-industry compliance organization to combat ad fraud, malware, and piracy and to promote brand safety through transparency. Linda Woolley, TAG’s new president and CEO, highlighted bot fraud, malware, data security, and ad-supported piracy as the worst problems in the advertising ecosystem and called for widespread industry accountability, promising penalties for those that failed to comply with standards.

As a cornerstone of her presentation, Woolley pointed out Washington’s interest in these issues, assuring the industry that the Senate and regulators—especially in light of this summer’s Senate hearings and recent FTC enforcement action and ROSCA suits—as well as the press, were paying careful attention to the industry’s issues and attempts at self-regulation. Furthermore, Woolley called attention to the issue of phony and deceptive ads, including malvertising, that eroded consumer trust in the advertising industry, contributed to ad blocking, and damaged advertisers’ and publishers’ trust and reputations.

In response to my question on what steps TAG would take to address issues related to consumer deception, Woolley commented that TAG would be working closely with the FTC to help combat deceptive and malicious advertising practices.

Most importantly, she expressed the sentiment that these problems are industry issues, and we need to band together to solve them. Although I think that the creation of TAG is a great first step in tackling these issues, it’s success will likely be predicated of the support and buy-in that it receives among the major players in the industry itself.

Thoughts on the Future

I, for one, will be particularly interested in how it plays out. A lot of the discourse in the town hall sessions at the conference seemed to center around identifying the players in the value chain that should be paying for some kind of solution to the fraud problem, but the outcome was mostly each value chain representative pointing fingers at everyone but themselves. Until each player understands the importance of actually supporting a solution that addresses problems at every juncture of the ad creation—placement, monitoring, and measurement processes—I think any real change will be a long way off.