Open-market video programmatic is rife with fraud, say buyers, further complicating an already-difficult marketplace

Much like the broader world of online advertising where the deeper into publisher inventory you go, the less quality you as an advertiser get, the world of programmatic buying continues to be fraught with problems, ranging from fraud to frequency issues.

Media buyers preparing for an unusual upfront marketplace say that’s especially acute in the red-hot streaming/connected TV video marketplace — where viewers continue to migrate away from linear TV. But buyers and analysts noted that it’s not all programmatic inventory that’s the problem. It’s the open-market programmatic inventory where upwards of 40 percent of inventory can be fraudulent — and almost never with the streamers themselves, who have better control over what they are selling.

“When you’re buying direct to publishers on the Hulus and Plutos and things like that, it’s a much cleaner process — much less risk for fraud,” said Dave Campanelli, executive vp and chief investment officer for Horizon Media. “The programmatic space is where a lot of that CTV fraud can happen and that’s where it tends to be messy.”

Matt Prohaska, CEO and principal of Prohaska Consulting, was even blunter. “You’ve got criminals that can misrepresent legitimate publishers and steal money,” said Prohaska, an ardent advocate for programmatic selling, but equally focused on eliminating fraud within it. “What’s also concerning for more than a decade is that the SSPs [supply side platforms] still get paid and almost all the time never send the money back.”

The problems with fraud in open-market programmatic, as opposed to programmatic inventory sold in private marketplaces (PMPs) can range from the outright criminal — representing fraudulent inventory that doesn’t exist or leads to the wrong content — to issues of frequency, where buyers have little to no control over where or how many times their client’s ad appears. 

Buyers said they would like to see more guaranteed programmatic inventory be available, ostensibly to get away from risking the purchase of fraudulent avails. “We are going to continue to push the sell-side on making more inventory available programmatically. We’re saying let’s push this to programmatic guaranteed… then we can optimize the rest of the buy,” said Megan Pagliuca, chief activation officer at Omnicom Media Group. “We think with the launch of clean rooms, we can pull analytics into those clean rooms to inform [this type] investment in a smarter way.”

“Fraud goes to zero when every deal is sold directly, whether it’s through an IO or [guaranteed] programmatic,” said Prohaska. “It’s the SSPs who are doing an awful job sheltering and allowing criminals to just set up shop.”

Besides the efforts to sidestep or eliminate fraud, frequency issues are a real problem that doesn’t get talked about often enough, but can lead to what OMG’s Pagliuca called “negative reach.” 

“We’ve done research around this concept — this is actually creating a negative reach” for the viewing consumer who’s seeing the same ad multiple times in a streamed program, she explained. “I was watching one of the streaming services the other night, and I was like, ‘Wow,  this is negatively reaching me!’”

“The frequency issues within CTV are real,” added Campanelli. “In theory, any publisher is supposed to have frequency caps on how many ads you’re supposed to get — if the buyer is doing their job. A lot of times it feels like that’s not even happening. And not only are there issues with single publishers and frequency, there [are] even worse problems when you go across publisher because they’re obviously not talking to each other.”

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