Ad Fraud in Connected TV (CTV)

The Cyclical Nature of Advertising and the Rise of CTV

The advertising landscape is characterized by recurring periods of intense enthusiasm for new channels. Strategies like native advertising, mobile targeting, and social media marketing have all, in recent years, been presented as revolutionary solutions for marketers seeking to capture audience attention.

Currently, attention is shifting towards connected TV (CTV). With connected TVs present in at least 80% of homes across the United States, advertisers are once again focusing their efforts on a potentially impactful medium.

The Appeal and Potential Pitfalls of CTV Advertising

CTV platforms, frequently utilizing technologies from companies like Google Chrome, Roku, and Apple TV, present a compelling proposition due to their high-quality content and extensive reach.

The anticipated phasing out of third-party cookies, which threatens ad targeting capabilities on traditional desktop and mobile platforms, further enhances the attractiveness of CTV’s available advertising inventory.

However, a significant risk exists for advertisers who fail to conduct thorough investigations. The current excitement surrounding CTV creates opportunities for fraudulent activities and exploitation.

Navigating the CTV Landscape

For advertising teams, particularly within startups and adaptable companies, CTV can represent a valuable addition to their overall advertising strategy.

It is crucial to recognize that CTV advertising introduces unique challenges and potential vulnerabilities. A cautious approach is essential.

Prioritizing due diligence and investing adequate time and resources to understand the intricacies of CTV advertising before substantial investment is a prudent course of action. Avoid being misled by exaggerated claims or becoming a target for fraudulent practices.

Understanding the Risks Within CTV Environments

Connected TV (CTV) offers access to new and specialized audiences, however, achieving transparency can prove difficult. Unlike advertising on desktop and mobile platforms, CTV ads often lack the same level of technical visibility, frequently missing client-side tracking when an advertisement is displayed.

This limited transparency represents only one potential risk associated with uninformed CTV ad purchasing. A comprehensive understanding of the challenges requires examining both the commercial and technical aspects that distinguish CTV.

Key Risks in CTV Advertising

Fraud is incentivized by high costs. CTV inventory generally commands a higher cost per thousand impressions (CPM) compared to many other advertising formats. This elevated CPM attracts fraudulent activity, as it maximizes potential returns for perpetrators. When combined with a susceptible advertising ecosystem, the potential for substantial profits with minimal effort creates an ideal environment for malicious actors.
Inventory scarcity leads to compromised standards. The availability of CTV video inventory is naturally limited. Expanding it necessitates the creation of additional CTV channels and the acquisition or production of content. This scarcity can initiate a chain reaction. Ad platforms and networks may become overly eager to secure sufficient inventory to maintain operations, resulting in reduced supply quality control.
Verification presents significant challenges. CTV environments predominantly utilize video ad serving templates (VAST), which restrict the ability of buyers to implement measurement code directly on the device. This limitation hinders accurate monitoring of ad reach and effectiveness, making even basic impression verification difficult. It not only restricts ad tracking but also severely impedes fraud detection.
SSAI presents both benefits and vulnerabilities. Server-side ad insertion (SSAI), also known as ad stitching, integrates advertisements seamlessly into the video stream, enhancing the user experience. However, this process prevents buy-side ad servers from directly interacting with the end user. Consequently, measuring delivery devices becomes impossible, and ad servers must rely on information like IPs and user agents provided by the SSAI servers. This reliance introduces the risk of fabricated data.
Low barriers to channel publishing. Certain platforms permit the publication of channels without requiring any programming. Considering this, alongside the aforementioned inventory scarcity, some CTV channels may function solely as fronts for fraudulent traffic. A growing trend involves selling advertisements through these minimal channels, which are then flooded with fraudulent activity utilizing the previously described methods.

Addressing these risks requires a proactive approach to CTV ad buying, focusing on robust verification and a thorough understanding of the ecosystem.

Managing Risk in Connected TV (CTV) Advertising

A more rigorous standard for inventory quality is essential when engaging in CTV advertising compared to other digital ad formats. Success in this space hinges on sourcing from suppliers who demonstrate high levels of trustworthiness and transparency. Collaborating with specialists possessing in-depth knowledge of CTV intricacies often proves to be the most effective strategy.

Key Considerations for CTV Ad Buying

Comprehensive Due Diligence & Blocklists: Irregularities can be identified through consistent monitoring of ad bid streams and delivery reports. Alternatively, proactive measures like thorough partner vetting and diligent blocklist maintenance can prevent issues. However, maintaining this level of scrutiny can be demanding, often requiring dedicated resources or specialized support.
Adhering to the “One-Hop” Supply Path: CTV supply chains should prioritize direct connections to publishers. While two-hop paths are acceptable for desktop and mobile advertising, the heightened risks associated with CTV necessitate a one-hop approach. Exchanges should consistently work directly with publishers, and only thoroughly vetted intermediaries should be considered.
Careful Evaluation of Server-Side Ad Insertion (SSAI): The potential for fraudulent traffic masking makes SSAI particularly vulnerable to exploitation. Any traffic exhibiting characteristics of SSAI should undergo rigorous analysis. Without expert oversight, accepting supply from intermediaries utilizing SSAI is discouraged, as is accepting it from publishers lacking a proven track record.
Avoiding Blinded Inventory: Transparency regarding the inventory utilized in your campaigns is paramount. A lack of transparency significantly increases the likelihood of quality issues and the delivery of questionable content. Accepting blinded inventory from any supplier, regardless of assurances, is not recommended. Fortunately, initiatives promoting greater transparency, such as the listing of authorized selling partners by CTV publishers, are gaining momentum.

Similar to other advertising channels experiencing rapid growth and attention, CTV advertising presents inherent risks for those lacking sufficient understanding. The unique technical characteristics of CTV introduce vulnerabilities, but also offer substantial rewards for advertisers who proceed with caution.

By prioritizing due diligence, maintaining awareness of potential fraud, and ensuring close proximity to the publisher in ad buying processes, advertisers can unlock the full potential of CTV and realize the benefits it promises.