Web fraud costs the advertising and publishing industries more than $7 billion annually, according to a report by the Interactive Advertising Bureau. That number means that upwards of 60% of digital advertising spending is lost to fraud.
To fight this pervasive crisis, the Local Media Consortium, which represents more than 75 local news media companies with 1,700+ digital publications, is partnering with the global data firm Integral Ad Science (IAS), which each day measures and analyzes the quality of 500 billion media metrics. In addition to fighting fraud, the partnership will seek to enhance brand safety and viewability.
I went to Toronto-based Ratko Vidakovic, whose blog AdProfs closely follows web ad fraud and its impact on the advertising, marketing, and publishing industries, for his opinion about the LMC-IAS undertaking against fraud. His assessment:
“I think LMC’s decision to use IAS is definitely a smart choice, given that IAS is the market leader in ad-verification tools. Furthermore, it’s great to see ad verification tools being used by a large publisher consortium like the LMC. Not only does it ‘certify’ the quality of its members’ sites that choose to utilize IAS, but the Consortium can no doubt use its clout as an organization to negotiate favorable terms on behalf of its members as well.”
In this Q & A, LMC’s Programmatic Exchange Champion Tobias Bennett details how his group and IAS are tackling ad fraud and other issues as Consortium members serve up 14 billion ad impressions monthly.
Does LMC agree that ad fraud is serious and does it think that its partnership with IAS will significantly reduce Consortium members’ exposure to ad fraud?
We wholeheartedly agree that ad fraud, or any fraud for that matter, is serious. We rely heavily on advertising dollars to subsidize our newsrooms, and it doesn’t look like that will be changing anytime soon. It’s in everyone’s best interest, buyer and sellers alike, to take the steps necessary to ensure as clean an ad ecosystem as possible.
IAS’s track record and reputation with the demand side was a major factor in our members’ decision to partner with them. We have no doubt that our members who enlist IAS’ services will be positioning themselves for success as the buy side’s fully justified demands for verifiable human-viewed inventory increase.
Will each individual LMC publisher have the option to pay for and use IAS? Or will it be implemented across the board for all their pubs?
All members will have the opportunity to utilize IAS’ services. The agreements will be 1:1 between a given member company and IAS under the terms that the LMC has negotiated on their behalf.
Who’s paying IAS — the LMC or each publisher?
Publishers will pay IAS for the services utilized.
What do those costs look like, on average, per member?
We don’t disclose the financial details of our agreements publicly. Safe to say though that we wouldn’t have a membership as deep as it is if we weren’t able to negotiate superior terms than most pubs can attain on an individual basis.
What about the “hybrid header bidding approach” discussed in a recent issue of eMarketer and which Ratko Vidakovic cited in his AdProfs blog on February 11? Is LMC using server-side bidding more often?
We are seeing a number of our members experimenting with server-side bidding as well as header bidding. I don’t know that anyone has “cracked the code” (or will) on a definitive optimal approach. I think a lot of it has to do with which channel the brands, agencies, desks, and DSPs ultimately adopt as their preference. I’d suspect that the minimized page load impact of server-to-server integrations would give it a leg up, but the performance has to be there as well. Time will tell.
In a related issue, how does Amazon’s Transparent Ad Marketplace affect LMC?
The LMC’s mission is pretty straightforward: chart a path toward a sustainable digital future for local news-gathering organizations. Any development that has the potential to shine a light on the superior engagement of local media audiences is welcomed with open arms. Amazon’s efforts to disrupt and evolve the ad ecosystem can only be a positive. From a publisher perspective, in programmatic yield management, it’s pretty firmly established that competition amongst buyers for like inventory improves yield performance. I think the same holds true in a macro sense. Amazon impacting the bottom line of organizations who’ve grown their war chests via dominance in the advertising space should improve the performance of the programmatic marketplace as a whole.
Couple the introduction of a new player in the demand space with the buy side’s realization that there really isn’t an infinite supply of high-quality inventory in the ecosystem, and we should start to see a positive shift in the perceived value of highly engaged, well-informed audiences.
You’ll also be working with IAS on ad blocking by users. What’s your take on this challenging issue for publishers and advertisers?
Ad blocking is a problem that publishers of all walks have wrought on themselves. The LMC’s overall strategy has been to encourage our members to be judicious in their implementation of new ad products and to purge their sites of those ad experiences that are undeniably bad. We also work very closely with our friends at Google to make sure that our members are fully informed on the impact of the work being done by the Coalition for Better Ads and the implications of the changes coming to Chrome.
Regarding user-implemented ad-blocking tech, last year, we formed a committee of members to review the myriad publisher-focused services and solutions that have popped up in the last couple of years. Without naming any names, we came out of the process rather underwhelmed. Those services that weren’t simply scams looking for us to pay them to allow us to run ads on our own sites were all deemed to be not worth the effort. The revenue recovered or preserved simply wasn’t enough to justify the cost or efforts associated with implementation or management.
That said, our members continue to experiment with various messaging tactics with the goal of opening up meaningful conversations with their users who are using ad blockers.