Exchange Fraud in Canada: The Simplest Solution

by Brad Jeffrey, Platform Services Manager

A report issued by the International Data Corporation (IDC) in October of 2013 projected that RTB spend in Canada would eclipse $80MM in 2014. Of that number, the percentage of ad dollars that could be going to fraudulent or deficient impressions (i.e. non-human, non-viewable) ranges from 20% to 50% (depending on who you ask). This is a scary reality and it emphasises that we have a significant problem in this industry right now that has the potential to impact the perception and growth of programmatic.

This begs the question; how do we combat this issue in Canada? Let’s first recall how we got here. What changes to the digital media landscape have enabled today’s supply side problems to flourish? Perhaps the most significant change is that we have stopped talking to each other, handing over critical control to the machines. The human element of media has always been so prominent, but is rapidly fading in the wake of automation overload. We’ve gone too far in one direction and we need the pendulum to swing closer to centre so that we can find our equilibrium.

Many of the supply problems faced today could be solved simply by promoting a return to one-to-one conversations between buyers/sellers and moving away from an over-reliance on automation. The reality is, of the $80MM RTB spend estimated by the IDC, you would be hard pressed to find a major Canadian publisher who believes they’re getting a significant share of that budget pool. If more conversations took place between major Canadian publishers and their counterparts, we would see far less money going to fraud, and the publishers who rightfully deserve the lion’s share of those media dollars would receive them. Channelling more ad spend to private exchanges ensures that brands end up with representation on quality Canadian sites as opposed to long tail US sites, next to pirated content or in a 1×1 pixel that no one ever sees.

More than ever, we’re seeing advertisers embrace private exchanges. In December, Marketing Magazine ran a story on exchange fraud in Canada which triggered a significant reaction in the marketplace. It prompted both publishers and advertisers to start asking the right questions and shortly thereafter we began to see sizable budget shifts from open to private marketplaces across our own exchange. On a broader scale, GroupM recently announced that as of 2015, almost all of their programmatic media dollars will be targeted towards private exchanges. And in June, the publisher consortium of CPAX took their inventory out of the marketplace for a voluntary period to highlight the problems in the industry. They came back to market with a revamped strategy that promotes the one-to-one connection between buyer and seller: now there is a direct relationship with every AOR, ATD and reseller within the CPAX marketplace. By teaming up together, these partners are able to offer buyers brand safe, quality inventory at scale.

We would all do well to remember that sometimes, the simplest solution is often the strongest: let’s start talking to each other again.

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