Australia has the third highest rate of ad fraud in the world with nearly one in three of all local programmatic ad impressions determined invalid traffic, according to Pixalate, a global fraud intelligence company.

Pixalate says it analysed billions of programmatic impressions across millions of domains for its latest quarterly report, finding the rate of invalid traffic for Australian programatic impressions nearly doubled to 29.5 per cent over the last quarter.

IAB Australia, the peak trade association for online advertising, has downplayed the report, partly because of the way Pixalate defines invalid traffic.

Pixalate defines invalid traffic (IVT) as traffic that does not meet certain ad serving quality or completeness criteria, or otherwise does not represent legitimate ad traffic.

According to Pixalate, among the reasons why ad traffic may be deemed invalid is it is a result of non-human traffic (spiders, bots, etc.), or activity designed to produce fraudulent traffic.

In Australia it now occurs in 30 per cent of all programmatic traffic, according to the research.

Point of contention

The Pixalate fraud rate includes both “General Invalid Traffic” and “Sophisticated Invalid Traffic” but does not break down a share of the two – a critical omission, according to the local arm of global industry group, the IAB. 

“Clarifying the types of invalid traffic is very important as the difference between general invalid traffic and sophisticated invalid traffic is enormous,” IAB Australia Technology lead Jonas Jaanimagi told Which-50.

According to Jaanimagi, “General invalid traffic is made up of benevolent spiders and bots, which is very easily filtered-out by all ad-serving platforms.”

He says, “Australian buyers that are following the latest industry standards, utilising best-in-class advertising technology and take a sensible approach to media quality have nothing to fear.

“It’s not the levels of fraudulent inventory that are available that are a concern, as this has always existed – it’s the levels of fraudulent inventory that are ignorantly or unknowingly being bought that is of concern. This steals revenues from publishers, wastes marketing budgets and funds crime – and has been a priority for IAB Australia and IAB Tech Lab for some time.”

Jaanimagi points to other measures of ad fraud from Integral Ad Science and Moat which peg Australian fraud rates much lower.

Rates rising

Pixalate says it analysed billions of programmatic advertising impressions across over 80 million domains, over 1.5 million apps, and over 75 million Over The Top and Connected TV devices, over the last quarter for its research.

The fraud intelligence firm’s data from the last year shows Australia’s ad fraud rate has only once been below one in five ads and the last quarter was the worst yet.

In terms of ad fraud, Australia’s rate of 30 per cent is only beaten by Columbia (35 per cent) and India (39 per cent), and significantly trails the US (19 per cent) and UK (11 per cent) markets.

Source: Pixalate, Q2 2019 Ad Fraud Report.

One of the digital advertising industry’s main responses to ad fraud has been the development of ads.txt, a text file publishers place on their sites which lists companies authorised to sell their inventory. Around half of the top 1000 websites have adopted the strategy in a bid to combat fraud in programmatic display advertising.

The Pixelate research found ads.txt has helped reduce fraud but its effectiveness appears to be decreasing. In the last quarter sites with ads.txt had 8.4 per cent less invalid traffic. However, the data suggests the gap in fraud rates between sites with ads.txt and those without is closer than ever.

Source: Pixalate, Q2 2019 Ad Fraud Report.

Where programmatic ad fraud is occurring

According to the Pixalate report, fraud rates are highest in mobile in-app video advertising – 36 per cent for phones and 31 per cent for tablets. 

But looking at only web browsing on mobile devices and the rates fall considerably – 12 per cent for phones and 11 per cent for tablets – suggesting the problem is more aligned with applications than devices.

Display advertising has less fraud than video, and in-app is again worse than web browsing. Smartphone and tablet in-app both had IVT above 20 per cent. 

Overall in-app advertising has risen to 25.2 per cent, according to the report.

Digital television programmatic advertising, despite being relatively new, also has a significant fraud problem. According to Pixalate, over 22 per cent of programmatic OTT/CTV video advertising is invalid.

iOS losing its edge

Historically Apple has offered an ecosystem where fraud was considerably lower than Android. But the Pixalate research finds the gap has narrowed to a new low, now about 1 per cent for in-app.

iOS and Android have in-app fraud rates of 24.7 per cent and 25.9 per cent, respectively. While Androids fraud rate has hovered around 25 per cent for the last year, Apple’s has nearly doubled.

“iOS devices have seen a 96 per cent increase in IVT (nearly 2x) over the last year, rising from 12.6 per cent to 24.7 per cent,” the report said.

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