Hope and hype: Avoiding ad fraud in the hot connected TV market

Advertising tends to work in hype cycles. Native ads, mobile targeting, social media — over the past decade, all of these channels have been touted as the long-sought miracle for marketers and advertisers to break through the noise.

Now, with at least one connected TV (CTV) in 80% of U.S. households, advertisers are ready to realign their hopes once more.

With seemingly high-quality content and a large reach, CTV — often powered by Google Chrome, Roku, Apple TV or other devices — seems like a good ad bet on its face. And with the looming possible obsolescence of third-party cookies triggering panic over ad targeting on desktop and mobile, CTV offers attractive inventory. But there may be a big downside for those not willing to perform due diligence: It can be easy to fall victim to bad actors exploiting the hype CTV is currently experiencing.

For ad buyers — especially those at startups and more agile organizations — CTV can be a viable and powerful channel to add to your advertising mix. But first, it’s imperative to know that CTV advertising can carry unique risks. Don’t get carried away by the hype, or taken advantage of by frauds. Investing the time and resources to get CTV advertising right before committing further is a smart strategy.

Knowing the risks of CTV environments

CTV can reach new and niche audiences, but transparency can be challenging. CTV ads don’t provide the technical visibility of ads on desktop and mobile — often, there’s no client-side tracking of when an ad is served.

This lack of transparency is just one of the risks uneducated CTV ad buying can bring. To get a more complete picture of the problem, we need to examine both the business and technical factors that make CTV unique:

• High costs attract fraud. CTV inventory carries a higher price in cost per thousand impressions (CPM) than many other types of advertising. Fraudsters gravitate toward high CPM because it can maximize their return. If paired with a vulnerable ad ecosystem, there’s potential for big profits with little effort — a perfect recipe for opportunists and bad actors.
• Scarcity drives low standards. CTV video inventory is inherently scarce. Making more requires building more CTV channels and either producing or licensing content. Under these conditions, a domino effect occurs. Ad platforms and networks become overeager to source enough inventory to keep business humming, leading to lax supply standards.
  
• Verification is extremely difficult. CTV environments almost always only use pure video ad serving templates (VAST), restricting the ability for buyers to run any measurement code on the device. This prevents accurate measurement for monitoring the reach and effectiveness of video ads — it’s difficult to even verify if impressions are being delivered on the channels they are supposed to be. Not only does this limit ad tracking, but it also severely hinders your ability to detect fraud.
• Server-side ad insertion (SSAI) is a double-edged sword. Also known as ad stitching, SSAI seamlessly blends ads and content into a single video stream. This makes for a smoother user experience, but also means the buy-side ad servers never touch the end user. In this case, there’s no way to directly measure the delivery devices, and ad servers have to rely on the IPs, user agents and other identifying information forwarded by the SSAI’s servers. The problem? There’s nothing preventing the delivery service from faking these values outright.
• The barrier to publishing a channel is low. Some platforms allow channels to be published with no programming required at all. Given this and the scarcity of inventory we mentioned, some CTV channels may be just operating as “cover” for fraudulent traffic. We’re seeing a trend of ads sold by these barebones channels and pumped full of fraudulent traffic by exploiting the methods described above.

Mitigating risk in CTV ad buying

Brands should maintain a higher standard for CTV inventory than other ad supply due to the unique risks involved. To succeed with CTV ads, you need to source from high-quality, trustworthy and transparent suppliers — and partnering with experts that know the intricacies of CTV may be the most effective way to accomplish this. There are a few important considerations you should take into account when planning the next steps:

• Thorough due diligence and blocklists: You can spot irregularities by monitoring ad bid streams and delivery data. Or you can avoid issues altogether by doing meticulous due diligence when choosing partners and making sure to carefully maintain a blocklist of untrustworthy vendors. But this can be a resource-heavy endeavor, and many businesses struggle to maintain consistent due diligence and monitoring without a partner or application that can support these efforts.
• The “one-hop” rule of CTV supply paths: Supply paths should never stray far from the publisher. It’s OK for desktop and mobile ad exchanges to get supply from other intermediaries, as long as those entities are working directly with the publisher. We call that a two-hop path. But in CTV, paths should always be one hop — because of the increased risk, exchanges should always work directly with publishers. The only intermediaries that should be trusted to provide supply are those who have been highly vetted.
• SSAI scrutiny: Because SSAI is so easily exploited to mask fraudulent traffic, any behavior that looks like it is SSAI within traffic should be heavily analyzed. Without expert guidance, you should not accept supply from intermediaries who use SSAI, and nor should you allow it from publishers unless they have a sterling reputation.
• The risks of blinded inventory: Vendors should be transparent about the inventory your campaigns are running on. If not, there’s a high possibility that there will be quality issues or suspicious inventory will be served. I advise you not to accept blinded inventory from any supplier — no matter what promises or assurances they give. The good news? Efforts are underway to increase transparency, including a push to allow CTV publishers to list their authorized selling partners.

Like other forms of advertising that experience a wave of hype, CTV advertising can be a risky business for those who don’t know what they’re getting into. The unique technical nature of CTV invites risk, but also promises rewards for those who are willing to approach it carefully.

With due diligence, an understanding of the fraud landscape and a commitment to keeping ad buys close to the publisher, you can make CTV deliver on the hype it has generated.