[raimundjoss]

I think the analogy here with Wall St is apples and oranges. In Wall st, the security traded is fungible. Here in the ad world, an ad view could be high quality or lower quality. It could be a bot or a human looking to buy something.

I am an engineer who spent 12 years in the ad tech industry. This problem is especially acute in the online video ad side where dollars are exchanged based on views and CPMs, not someone buying something online (this being more accountable is less open to abuse). In my old job, we tested what % of traffic are fraudulent. These traffic are daisy-chained from one ad buyer/seller to the next. Inevitably it will hit someone unscrupulous. In aggregate we found anywhere from 20% to 95% of the traffic we see for video ads to be fraudulent.

There are some very sophisticated bot farms out there that gets around detection, mostly operated out in Eastern Europe and Asia. If you look at Comscore 100 video sites, you can always tell who's gaming the system when from one month to next, an unknown brand just jumped high in the top 100.

This is the reason Facebook had shut down Liverail that they spent $450M on. Super high percentage of ad fraud.

[vosper]

I worked in ad-tech for the past 4 years, this is a very accurate write up. I think exchanges have had their day - the quality of traffic is just too low, and due to their incentives the exchanges put all the burden for detecting fraud on their clients.

[shostack]

Senior buy-side guy here. Viewability measurement has made a small dent in things, but for the most part, my personal view is that a huge percentage of display inventory (especially video) is very inflated. Pubs are chasing the much higher video CPMs without a care for quality, and buyers seem to be eating it up for some reason.

In my mind there's only two things that will really change this...better viewability/inventory auditing and attribution technology.

The larger, more reputable inventory sources (Google, FB, etc.) have a VERY vested interest in pushing quality and using whatever data they can bring to the table to build that trust, and then use that trust as a moat against their competition. Viewability providers likewise have an easy sell once they can improve the accuracy and reliability of their offerings (they have a long ways to go based on general sentiment in the industry). This will put pressure on other pubs to up their game or be left out. Why bother with a crappy news site that has 50%+ bot views that you're being billed for if FB or Google can prove that their traffic quality is much higher, better targeted, and infinitely higher reach?

On the buy side, the pressure will come in the form of attribution. Right now, display performance, video in particular, is a super murky area in terms of measuring success. What is the value of a view-through? Most advertisers couldn't tell you. And the ones that can probably have a very fuzzy picture of it that varies based on the attribution model they are using. However the space has improved dramatically, and at the end of the day, performance marketers will be able to do a much better job of telling whether traffic is crap or not based on whether it backs out. Bots don't buy things (although they do sometimes sign up for lead forms now). So if someone with a solid analytics stack sees a ton of impressions and no sales through their various attribution lenses, guess what? They'll stop buying those impressions. And the more big buyers that get smart about attribution and stop buying based on impression counts, the more pressure will be exerted on the sell-side to clean up their game.

So while the problem is "self-correcting" in the sense that there is big money with very vested interests in solving for this, unfortunately it is a big ship to turn and will take time.

Articles that talk crap about the ad industry rarely get into the nuances which is horribly infuriating and does a lot to give the industry a bad reputation. Like any space, there are bad players. Legit players in this industry want the bots and garbage out of the picture yesterday. They make our jobs harder, and reduce our performance.

[raimundjoss]

Totally agree with this is why especially FB is winning. Especially in Mobile where every user is pretty a logged in user on FB, Instagram, WhatsApp, etc. Plus non-inferred actual demo data. Even Google can't touch FB...

Everyone else who's peddling non-logged impressions with BlueKai data, good luck - first, Bluekai is only accruage 1/3 of the time. Second, majority of those are bot views.

Attribution like you describe is notoriously hard to measure. As views get to mobile, FB wins again since most apps use FB auth.

[jackgavigan]

> I think the analogy here with Wall St is apples and oranges.

The similarities lie in the real-time nature of trading systems in both sectors.