Ad fraud and invalid traffic are two of the biggest and most costly problems plaguing digital advertisers. Yet two San Francisco researchers say they encountered significant resistance from brands and agencies to the idea of addressing the problem when they took a new solution to market.

For all the promises that digital data promotes, there still remains a gap in understanding the systems that generate them. The open, complex systems of the internet seem to be shrouded behind abstractions of what is marketed and what is actually possible, says Shailin Dhar, co-founder of Method Media Intelligence (MMI).

According to his co-founder and MMI CTO Praneet Sharma, “As the funders of this system, it’s ironic that advertisers have so little share of this data ‘currency’.”

“For this system to make good on all its offerings and capabilities, the brands must be given full transparency of each and every penny spent, and gain a full awareness of its limitations,” says Sharma.

Dhar, meanwhile, tells Which-50, “Proactive auditing empowers advertisers to take control of their data and classify valid and invalid spend into financial quantities.”

“After researching, consulting on, and sounding the alarm at the unaddressed extent of ad-fraud and invalid traffic, we created and launched a solution called Proactive Auditing that helps prevent budgets from being spent on objective waste, and creates a financial deterrence from invalid traffic from all agencies and ad-tech players.”

The solution has already been piloted with 10 advertisers since October 2017.

Dhar says his company approached the issue of invalid web traffic with an exoneration method, that is guilty until proven innocent, rather than an incrimination method, which is innocent until proven guilty.

“For years there have been debates over who detected what percentage of “suspicious” impressions, with no verification vendor being willing to show their work, admit to sampling constraints, or actually provide a method to account for waste/fraud in a financial impact. We set out to change that by offering a solution where agencies and adtech companies were not beholden to a third-party’s “proprietary” detection techniques to battle.”

Settling on an appropriate pricing model proved something of a challenge for the company. “While our product was ready in October 2017 and we continued to run pilots and tests internally and with clients, we did not officially launch to the market until February 2018 because we were still debating on how to price this.”

The easiest and most accessible method of charging seemed to be on a CPM basis. Dhar says however, they wanted to shift away from the traditional adtech, “pass the cost to the client” model due to the negative consequences of this approach that they had witnessed in the past.

“We rather priced on a fixed fee, generally fraction of 1 per cent, based on the size of the budget being monitored, more like an insurance policy because this data is used to recover wasted spend.”

“I think all advertisers would be shocked to know how many agencies and technology vendors do not have an interest in preventing the waste of ad budgets. And that blame can go on all parties since advertisers need to consciously incentivize their agencies and vendors to prevent waste; the margin fee model does not encourage that.”

Follow the money

Little wonder then that his co-founder Praneet Sharma says the pair encountered resistance to the idea of investigating and auditing media.

“Over the past year, we have received considerable hesitation, even hostility, when it comes to the simple question: ‘Where are your media dollars going and is it rendering and real?’. From the agency side, this brings up valid concerns such as: Will the advertiser reduce their overall spend? Will they question my ability?”

Even on the brand side, he says the company faced resistance.

“They brush off monitoring because ‘everything is fine’ or ‘our agency handles that’. Yet many digital teams at advertisers have no clue about the systems, where their spend is going, let alone having a line by line dataset (‘receipts of the campaign’).”

Understandably, this type of action can come off as a threat, says Sharma, although he obviously argues otherwise. “Monitoring and transparency are rewarded. We have seen more investment in transparent programmatic platforms that provide full, granular datasets. We have seen more investment in agencies that provide transparency because suddenly, the advertiser has more faith in the relationship.

The trend is positive, however. “Agency reviews now fully emphasize the digital competency and transparency portion in the selection process. Overall, in the dynamic world of programmatic media buying, which is rapidly growing, monitoring has allowed a sense of comfort and creativity.”