Dive Brief:
- Eighteen percent of over-the-top (OTT) TV ad inventory is fraudulent, according to a study that AdLedger, a nonprofit research and development consortium working on blockchain applications for digital media, shared with Marketing Dive.
- The most common kinds of OTT ad fraud are misrepresentation (when a fraudster sells ads claimed to be shown to U.S. users, but are actually displayed on devices outside the country), device-based (when a single device reports a high number of ads during a given period) and app-based (when an ad-supported OTT app shows a very high rate of activity for the entire day), per AdLedger.
- The study analyzed over 1 billion OTT ad requests over two years. The consortium is currently working on projects with members such as Omnicom, MadHive and Salon Media that use blockchain and cryptography for verification of media performance.
Dive Insight:
OTT ad fraud has become a significant worry for marketers as they place more video ads on digital media platforms. OTT and social are forecast to drive spending on programmatic video ads, which is set to rise 19% to $34.9 billion in 2020 from $29.2 billion this year, according a separate report by eMarketer.
OTT services like Roku and Hulu are working to bring in new advertisers as cord-cutting audiences sign up for their services. "We just need to work together as an industry to proactively fight fraudsters, while providing transparency across the supply chain," Vinny Rinaldi, head of addressable media and technology for Hershey, said in a statement.
AdLedger's findings may support other estimates of losses to ad fraud on OTT media. Ad fraud among online, mobile and in-app channels will grow 21% to $42 billion this year among online, mobile and in-app channels, Juniper Research estimates. The firm said losses are mounting as online scammers use more advanced methods to commit fraud and smaller advertisers often don't use anti-fraud solutions.
As OTT services grow increasingly popular amid the cord-cutting trend, the channel is expected to be exploited.
"OTT TV service providers must address the issue of advertising fraud if they wish to attract high value advertisers to their platforms," Sam Barker, senior analyst at Juniper Research, said in a statement. "These players must prove the value of advertising on their services by minimizing exposure to ad fraud through the adoption of fraud detection and mitigation solutions specific to OTT TV solutions."
