Facebook shuts down ad buying platform after discovering ad fraud

Dive Brief:

Facebook is shutting down the demand-side ad buying platform it has been testing through its ad server Atlas, according to an announcement made by Facebook's Head of Ad Tech David Jakubowski.
Facebook made the move after discovering "many bad ads and fraud (like bots)," adding that they were "amazed by the volume of valueless inventory."
Facebook discovered that many ads being purchased through the platfrom were banner ads, but those ads were often being served to bots. Facebook found only two ad formats were delivering significant value — seven times greater than banner ads — to advertisers: native and video.

Dive Insight:

Ad fraud is a big problem for everyone, not just Facebook.

A recent report from the Association of National Advertisers (ANA) and White Ops, a digital ad fraud mitigation company, predicts that advertisers will lose $7.2 billion to fraudulent ad bot impressions in 2016. Two areas of digital advertising in particular were found to be especially vulnerable to bot fraud: Display media with CPMs over $10 had 30% more fraud than lower CPM media, and programmatic ads had higher bot fraud at 14% for display ads and 73% for video ads.

Facebook had been testing the programmatic ad buying platform on its ad serving platform Atlas, allowing marketers to use Facebook's targeting power to buy ads programmatically on other websites and mobile apps. The company shut down the pilot after discovering too much wasteful or fraudulent inventory, especially with the banner ads being served through the platform.

Despite that, Facebook did discover that native and video ads were delivering significant value. According to The Information, Facebook plans to ultimately build a new ad buying platform for these types of ads.

The Atlas ad tech project represents Facebook's bid to compete with Google's DoubleClick ad tracking platform, according to Fast Company. Google's market-leading DoubleClick platform could be vulnerable to a Facebook competitor as it was built for desktop, not mobile.

The ANA report offered marketers suggestions to address ad bot fraud, including understanding the programmatic supply chain, requesting transparency for inventory and traffic sourcing, and using third-party monitoring for all traffic.