Publishers like criticizing ad tech vendors for shady programmatic practices. But some publishers themselves are gaming the system by using tricks like ad refresh, bid pooling and paid traffic arbitrage, according to a head of programmatic from a midsize publisher, who used to work for an ad network.
For the latest in our Confessions series, where we trade anonymity for candor, this publishing executive detailed how publishers use the above programmatic tricks to bring in more ad revenues. Excerpts appear below, slightly edited for clarity and length.
You mentioned tricks that publishers use. Let’s start with ad refresh.
Publishers use ad refresh to get more money out of their pages. Big publishers do it nicely and ethically only when ads are in view. But for other publishers who don’t have the tech capacity [and] who don’t care about the long-term value of their inventory, they will refresh every ad on the page, no matter whether it is in view or not. They can refresh ads with 15-second or 20-second intervals for, like, one minute, so they can pump out 20 or 30 percent additional ad revenue. Publishers make more money while advertisers get swindled.
What is bid pooling?
Bid pooling relates to ad refresh. For example, when a publisher makes an ad request to exchange A, exchange A will come back with a bid. And then the publisher sends exchange B the same ad request; exchange B will come back with another bid. Now, the publisher has two or more bids that it can potentially use. If the second-highest bid from exchange B doesn’t win, the publisher still keeps that bid in its browser, and after a predetermined length of time, the publisher pushes it out on its page. That means the publisher doesn’t need to send out another ad request to refresh, and instead, it uses the second-highest bid [from exchange B in the previous round] even if the advertiser didn’t win the first time.
So publishers basically set their own auction rules?
Yes. And bid pooling is bad for advertisers because they submitted a bid to show [site visitors] the first ad they see when they log onto the page, not the second or third refreshed impression.
Can supply-side platforms and demand-side platforms track ad refresh and bid pooling?
It’s really hard for them to track. I know a publisher did it for a few years and just got caught once.
Is it because of technical hurdles, or is it more of a negligence issue?
Pure negligence. Most SSPs don’t care enough to police these activities because they are making more money when publishers serve more ads. If they examined log-level data more thoroughly, it’s hard not to notice it. Some SSPs like AppNexus are very diligent about policing this type of behavior and blacklisting offenders. Ad tech needs more human oversight.
Is paid traffic arbitrage as bad as ad refresh and bid pooling?
No, tons of people are doing it. Publishers pay content-recommendation vendors or Facebook on a cost-per-click basis to direct users back to their site, where publishers serve display ads. Potentially, [content recommendations] would be a small margin, given what publishers pay for and what they get. But when publishers employ ad refresh and bid pooling along with paid traffic, they can extend their margins the whole time without pushing out any extra content.
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There are also very heavy ad layouts that publishers hide from organic traffic and only show to users who come from paid traffic sources to increase margins. When publishers like this seek approval from exchanges or SSPs, it’s tough for vendors to find the layouts that are full of ads and no content. If SSPs found these layouts, they might not approve the publisher.
Are those practices open secrets in publishing?
I think so. People who have been around for a couple of years would know what a quality publishing business looks like versus what a traffic arbitrage publishing business looks like. The guys who are in the game don’t care because if one site is down, they will have another five sites.
Do most publishers you know use at least one of the aforementioned tricks? Or do only shitty publishers do things like this?
Most are long-tail, poor-quality publishers, which make up sadly a ton of supply volume. Unethical [ad] refresh happens on a surprising amount of large publishers.
Would ads.txt help alleviate this?
It would, to some extent. I saw [that] many shitty publishers have ads.txt on their pages.
What can the industry do?
It will come down to exchanges and SSPs making sure that they only allow quality inventory, but most exchanges only care about volume today. Some exchanges tell the press that they take ad quality [seriously] because they need to say that to keep their big publisher clients happy. And for long-tail publishers whose inventory is so little, exchanges usually feed them poor-quality ads.
How about the buy side?
Agencies and DSPs should give midsize publishers more opportunities. Some of them really want to do direct [business] with advertisers, and they have high-quality inventory. But since they don’t have a massive scale or a household name, it is hard for them to build direct connections with buyers.