By Asaf Greiner
The monumental rise of connected TV (CTV) during the pandemic will forever reshape marketers’ media plans as they relate to TV spending and how brands tap into this vital yet fragmented landscape. However, evidence exists of fraudsters moving in fast to take advantage as this advertising opportunity rises from nascent to meteoric seemingly overnight. In the last few months, the industry has been rattled by a slew of reports that uncovered costly and expensive schemes, and they are merely the tip of the iceberg.
Such news has understandably drawn attention, but it shouldn’t spark panic. It’s clear that the industry has begun to sound the alarm around the very real issue of fraud in CTV, but the real question is how marketers respond.
What’s the reality of CTV today? What have marketers learned about fraud in digital media during the past two decades, and what can the industry do to ensure CTV avoids the pitfalls of the past as it takes on a much more vital role within the media mix?
CTV on the Rise (and Caught in the Crosshair)
According to eMarketer, U.S. CTV ad spending in 2020 totaled $8.11 billion. That figure, bolstered by advertisers’ reactions to pandemic-driven shifts in viewer behavior, will increase to $11.36 billion in 2021. By 2024, eMarketer estimates it will reach $18.29 billion, more than double the amount spent this year.
If the life cycles of other digital channels have taught us anything, it’s that advertiser dollars follow the eyeballs and fraudsters follow the advertiser dollars.
Fraudsters are targeting vulnerabilities in server-side ad insertion (SSAI) technology, which combines content with ads into a single video stream that can play on devices like Apple TV, Roku, FireTV, and others. By duping advertisers into paying for ads that were never delivered to households, these scam artists cheat advertisers and publishers out of millions in ad spending.
These types of scams spark a great deal of alarm among advertisers, particularly when they arise within an emerging digital channel in which they’re considering placing a bigger portion of their budgets. For CTV, the concern is understandably high because the stakes, such as CPMs, are also high.
Recent findings are adding to marketers’ growing awareness of fraud in CTV. Brands stand at a crossroads regarding the future of CTV advertising, in which it will be important to reestablish trust between buyers and sellers in the core infrastructure that facilitates media exchange. Hype and hyperbole won’t help. What’s needed is a sober accounting of the facts and a collaborative response to addressing them.
Avoiding Panic While Promoting Progress
The common knee-jerk reaction among advertisers upon learning of new instances of fraud is to freeze their budgets in a given channel or platform.
It happened just a few years ago with YouTube, when it was revealed that the online video platform was having trouble ensuring brand ads did not run adjacent to hateful or offensive content.
Mega-brands like Pepsi, Walmart, and GM pulled their ad dollars from the platform, with the hope of strong-arming Google to improve YouTube’s tools and moderation practices for the future.
The end result was predictable. Promises and improvements were made to YouTube’s technology and processes. Advertisers returned. But in the process, a great deal of money was lost — and not just by YouTube. Creators of perfectly safe and respectable content lost revenue within the YouTube platform as brands pulled back and lost weeks, if not months, of the strong ROI typically delivered via YouTube advertising.
While it’s imperative that brands use their spending power to lobby for improvements within the advertising industry, volatile pendulum swings and great shows of force are hardly constructive.
Advertisers and the publishers and technology companies driving today’s CTV revolution should make every effort to avoid such a wild display of action and reaction. Rather, now is the time to come together in a reasoned fashion to build the infrastructure and processes needed to sustain balance, trust, and transparency in CTV for the future.
The path to that future is paved with the tools marketers need to support a buying methodology that is smart, responsible, and secure — and keeps them out of trouble while reaching their target audience. Such tools are nuanced and specific, and marketers will be better able to harness them if they aren’t tempted into sweeping reactions to perceived threats. Technology will play a critical role to restore trust, but trust will also help to foster the right use of the technology.
Setting Trust as CTV’s Foundation
Ensuring an appropriate industry response and establishing a dialogue regarding fraud in CTV is vital for publishers, tech companies, and advertisers. After all, CTV’s share of media consumption is only going to grow.
In 2020, CTV hit an inflection point, as TV transitioned from a lean-back to an on-demand medium. While advertisers need to follow the shifts in audience behavior to stay relevant, the real challenge might be inventory. That’s because the user experience and monetization model of CTV doesn’t lend itself to quite as much advertising as linear TV, meaning CTV inventory will continue to command a premium.
At the same time, the competition for CTV inventory will exceed the linear TV market, given the strong targeting and measurement capabilities that are built into the channel. Within CTV, brands can pursue customer acquisition with the precision and accountability of a digital buy.
But what about the accountability of the ad serving itself? Therein lies the next immediate challenge for the CTV industry. In response to the panic generated by recent news, many in the industry have been quick to point out that reports of this type of CTV fraud are often blown out of proportion and that the problem represents only a tiny fraction of CTV inventory — and lower-tier inventory, at that. This might be true, but it is more likely a reflection of how unevenly distributed the risk of fraud is in CTV.
Inventory selection is a factor, but so, too, are the buying tools and methodologies. Discrepancies in SSAI implementation play a big role. None of these factors mean marketers should be content to shuffle this sort of fraud under the rug and accept it as a cost of doing business.
As the CTV landscape evolves, it’s unclear what mechanisms will be tapped most commonly to facilitate cross-platform purchasing. But without a doubt, advertisers will expect — and demand — that CTV’s premium inventory remains accessible and protected as a tentpole element within their media mix.
Until strong standards are in place and widely adopted, much of that responsibility will fall to third-party solutions that authenticate the impression at the source and again at delivery, providing the confidence from an independent source both pre-bid and post-bid. It’s the independent sources that will provide protection, and serve as a bridge toward a future where such protections are built into the media infrastructure itself.
Ultimately, collaboration between independent actors and stakeholders on the buy side and sell side will lay the long-term foundation for a sustainable CTV advertising landscape. It’s a foundation built on openness, accountability, and transparency. Now is the time for a real collaborative effort to take a stand and establish standards that foster trust on all sides.
About Author: Asaf Greiner is the general manager of verification at Flashtalking, a partner in the ANA Thought Leadership Program.