The Online Safety Act overlooked ad fraud — we must do better

Opinion

It’s up to all of us working in digital advertising if we want to tackle what has quickly become our industry’s greatest threat.

As the slew of arguable industry predictions in the press tails off, one guaranteed projection is that this anticipated bounce in revenues will be matched by a growth in ad fraud. And we’re at a point where we can’t continue to stick our heads in the sand and view fraud as a natural consequence of advertising’s success.

Whether we realise it or not, the UK advertising industry is important to everyone, not just those working in it. It’s an industry contributing £129bn to the UK economy, representing over 3.5% of UK GDP and supporting 2m jobs.

Yes, we should be proud of this, but with this pride comes responsibility — because, behind these numbers, there’s another staggering one.

By 2028, Juniper Research estimates that $170bn of global digital adspend will be lost to ad fraud. That’s 23% of total digital advertising spend. Equally worrying is that only 23% of marketers working in large companies view ad fraud as very concerning, with some 14% stating they weren’t concerned at all.

One reason could be that they believe the technologies they’ve invested in to prevent this will mitigate it. Or maybe they think it’s the role of their agencies or other industry players to address it.

But the reality is it’s up to all of us working in digital advertising if we want to tackle what has quickly become our industry’s greatest threat.

Lack of regulations

Today, it’s easy for bad actors to plug into the ecosystem and let ad fraud revenue make its way undetected through legitimate ad marketplaces and networks.

There are few regulations in place to determine what part each participant in the digital ad ecosystem should be playing to prevent fraudsters from entering the supply chain and a lack of processes for preventing it — especially when it comes to verifying the identity of programmatic participants and intermediaries. That’s why it’s up to us all to do something, because it impacts every participant.

There are emerging signs that the UK government is waking up to the threat of ad fraud by seeking to tackle fraudulent ads in last year’s Online Safety Act. However, the more serious issue of ad fraud — the deliberate deployment of bots and invalid traffic to defraud brands — was largely overlooked.

This is because of the incorrect perception that it’s just an industry issue, not one that directly impacts consumers. But, ultimately, ad fraud left unchecked by lack of transparency and the ease of anonymity in the supply chain leads to money laundering on a mass scale. It removes value from the economy, funds organised crime and often funds hostile foreign states — all of which have national security implications.

Transparency needed

Addressing ad fraud requires that transparency and auditability are central to everything we do — and this should be a key focus of evolving and emerging adtech.

Unfortunately, it’s all too easy for bad actors to insert themselves into the programmatic ad supply chain — which currently processes similar transaction volumes to financial infrastructure, with a fraction of the know-your-customer and anti-money-laundering requirements.

Additionally, the industry works predominantly on a trust model, which fails both sellers and buyers. Brands are forced to rely on publishers and ad networks to supply campaign statistics, including ad fraud levels, while publishers rely on brands to accept their data and pay out for campaigns in a timely manner. By not being verifiable, this data is often disputed, resulting in strained relationships and publishers being paid late — and less.

This is why distributed ledgers are coming to the fore. They allow all parties to access verifiable campaign data in real time. Having a single, true representation of the data brings clarity, prevents disputes and ensures publishers are reimbursed quickly, proving the value of transparency.

Reliable campaign reporting

It is by offering reliable campaign reporting — including being open about ad fraud — that trust can be restored and necessary action taken to reduce it.

Tackling ad fraud is hard because the fraudsters are sophisticated. But this mustn’t be used as an excuse. We shouldn’t be lauding the success of our industry when the advertising castle is built on a foundation of fraud.

Instead, we should be doing something to ensure that the industry’s fine words around transparency and openness are matched by action. There are a lot of smart people working in it.

By concentrating the combined brain power, effort and will that built this industry and focusing them on tackling fraud, we can make a real difference.

Elliot Hill is chief marketing officer at VeraViews