Publishers are losing up to $3.5m a day to counterfeit video inventory according to a major study involving 16 publishers and tech firms Amobee, Google and Quantcast.

The study, which included publishers such as The New York Times, Business Insider and Washington Post, discovered massive volumes of counterfeit inventory across display and video inventory globally.

Based on a $5 per video CPM, fraudulent inventory is costing publishers up to $1.27 billion a year.

The demand side platforms – Amobee, Google’s DoubleClick Bid Manager, and Quantcast – provided anonymous data for a single day in August revealing the number of unique exchanges, unique publisher IDs, and number of impression callouts for 26 domains owned by the participating publishers.

The publishers then compared the DSP data against their own advertising system data.

Publishers in the study reported using 12 exchanges with 28 accounts to sell display, and two exchanges with six accounts to sell video on average, but the DSPs found their inventory available across 22 exchanges and 129 accounts for display, and 26 exchanges across over 1,000 accounts for video, on average.

Looking at the total available inventory across all exchanges for the 26 domains, the study found video callouts were overstated by 57 times the available inventory, representing about 700 million counterfeit callouts per day; and display callouts were overstated by 4 times the available inventory, representing billions of counterfeit callouts per day.

How it works

Counterfeit impressions are created when a bad seller replaces the URL of a low-quality site with a premium publisher URL, or a fraudster creates fake impressions and labels them with a high-quality publisher’s URL.

Then, the counterfeiters send their fake inventory to auction at multiple exchanges and SSPs, without the knowledge of the publishers they’re impersonating, to trick advertisers into thinking they are buying premium publisher inventory.

The result is publishers miss out on the ad money and advertisers risk buying mislabeled and potentially unsafe inventory.

The conclusion the study came to was the industry needs to adopt ads.txt now.

“If the industry is going to seriously take on counterfeit inventory, publishers need to immediately get behind ads.txt, otherwise this problem will linger and continue to hurt both brands and publishers,” said Jana Meron, VP of Programmatic and Data Strategy at Business Insider.

The study argues if advertisers want to execute efficient, brand-safe programmatic campaigns should start demanding that their campaigns run only on authorised inventory, as defined by publishers’ ads.txt files, or work directly with their preferred publisher brands.

“The results of this study confirm that ads.txt needs to be adopted as rapidly as possible to cut off the flow of counterfeit website inventory,” said Dennis Buchheim, Senior Vice President and General Manager, IAB Tech Lab, which helms the ads.txt initiative.

“It is critical that the industry comes together to put a stop to criminal activity and secure the health of the supply chain.”

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