Ad exchanges still have quality problems

Ad exchanges have an ongoing quality problem.

Media execs gathered in New York this week to discuss the future of programmatic at events including AdExchanger’s Industry Preview. But offstage, much of the talk was about low-quality inventory, fraudulent traffic, and whose job it is to fix the issues.

At a press event on Thursday, for example, Google’s ad exchange chief Scott Spencer said the company is constantly battling to keep low-quality inventory and shady traffic out of its network. It rejected more than 3 million attempts by dubious publishers and advertisers to join its network in 2013, he said, and also kicked over 500,000 of its existing customers out.

“For brand advertisers to spend programmatically, they need to know the inventory is real, and they need to know it’s of quality,” Spencer said.

On the one hand, the efforts should reassure marketers wary of the scruffier parts of the programmatic world. Yet there is also a tacit acknowledgement that the complex systems undergirding modern digital media have many side doors that unscrupulous actors are more than willing to use for their own gain.

Inventory quality is a known problem and one that’s relatively easy to find. Long-tail sites with violent, adult or pirated content are regularly littered with ads for major brands, which often end up there via exchanges. Some suggest, however, that many advertisers have no problem buying that type of inventory because it’s cheap and it performs well, despite what they might say publicly.

The fake traffic issue is more difficult to both spot and to quantify, however. Some ad tech execs say the issue is getting worse as “bad actors” become more sophisticated and more of them figure out how to game the system.

One told Digiday this week that he estimates as much as 50 percent of the traffic flowing through exchanges could be from bots or other non-human traffic, for example.

He also suggested some exchanges don’t do enough to maintain the quality of the publishers in their systems.

“When you’re in, you’re in,” he said. “A lot of exchanges don’t check the quality once a publisher’s in the front door.”

He refused to name which exchanges or supply-side companies he was referring to, however.

Others say the problems are exaggerated.

“The vast majority of the 70 billion daily impressions available [through exchanges] are perfectly safe and wonderful places for marketers to spend,” MediaMath CEO Joe Zawadzki told Digiday this week, after ads for his own company popped up on piracy sites.

“Small bad actors ‘hack’ the systems to get their bad inventory in there,” he said.

But to Spencer’s point, 2014 might be the year these issues really come to a head. Programmatic advertising grew drastically last year, and it now represents a significant part of some brands’ digital spend. Advertisers such as P&G are even building out in-house trading capabilities to help them spend more of their ad dollars that way.

But in order for programmatic advertising to really hit the prime time, it might be time for the industry to lose its scale fetish and start talking quality, instead of just VC-pleasing quantity.

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