Dive Brief:

• The Financial Times conducted internal research that found at least six ad tech providers of note — Verizon's Oath, AppNexus, PubMatic, Teads, SpotX and Comcast's FreeWheel — were tricked by the practice of domain spoofing, where fake ad space was presented as premium FT inventory, according to a report in The Wall Street Journal.
• The publisher sent letters to those companies notifying them of the issue, unnamed sources told the Journal. Several of these companies are now investigating and attempting to excise the bad actors, though FreeWheel resisited that it had a role to play. Through domain spoofing, bad actors can trick exchanges into placing advertisements on fake media space that's presented as premium publisher inventory. 
• Ad fraud hurts both advertisers and publishers because advertisers are willing to pay more for premium inventory such as on the Financial Times' web properties and the fraudulent ads are actually appearing elsewhere on the internet, possibly even on a website that doesn't receive legitimate traffic. For publishers, ad fraud takes revenue out of their pocket because they don't get paid for counterfeit ads.

Dive Insight:

When industry thought leaders such as Proctor & Gamble's Chief Brand Officer Marc Pritchard talk about increasing transparency in the digital media supply chain, counterfeit ads and practices like domain spoofing are one of the top concerns. Fake ads can be combined with other cybercriminal activity but even alone cause harm by impacting the trust advertisers have in digital media as well as confidence in ad tech firms being able to police the inventory they offer.

Calls to actions like P&G's have led to some progress, and the Trustworthy Accountability Group last week released a study that found efforts against ad-supported content piracy have helped reduced offending sites' revenue by 48% to 61%. Still, the Financial Times' findings underscore how some of the major ad tech players are failing to pull some of their weight in monitoring for bad actors that can convincingly trick automated exchanges into believing fraudulent media is the real deal. Some recent industry initiatives might help combat these practices. 

The Interactive Advertising Bureau has been releasing tools to help fight ad fraud, as the Journal pointed out. In May, the trade group introduced ads.txt, a solution for counterfeit ads and unauthorized programmatic impressions. One problem, however, might be a lack of adoption by publishers, as a study by Getintent found only 1.3% of the top websites in its inventory are using ads.txt files.

Last month, the IAB also released OpenRTB 3.0 for public comment. The latest version of the real-time programmatic bidding framework provides buyers with more transparency during the bid process and integrates ads.txt to improve programmatic buying and selling along.