In a commentary published on MediaPost, John Motavalli expresses the frustration that I'm certain many feel in the digital space. He reports that Pixalate, one of (seemingly) dozens of fraud detection companies in the ecosystem that claim to have 'leading' technology to identify fraudulent impressions on behalf of advertisers, is claiming that more than half of connected TV ads served programmatically in the first quarter were fraudulent.
In this graphic released to coincide with the MarTech conference in San Francisco, over 600 of the 5000+ marketing technology companies listed are in the advertising space (and this doesn't exclude the 1000s of stand along content publishers from which advertisers can directly buy ad space).
Digital marketing is a $100bn global industry. It has experienced massive growth over the last seven years, finding its feet in the wake of the 2008 financial crisis. Demand is up, cost of supply is down. Hundreds of companies have been founded playing the role of prospectors in the digital media ecosystem, (proverbially) heading west and making a land grab as money flowed freely into new media.
As this tremendous growth is lauded as the new media paradigm, and as digital media executives praise each other for creating a brave new world where it has become possible to deliver the right ad to the right person at the right moment, a dark underbelly has developed, a cancer whose growth has exceeded that of digital media revenues: ad fraud.
Like those who warned of the coming housing bubble years before the resulting global financial collapse, experts are discovering and sharing tales of rampant ad fraud permeating every level of digital media. For the bad actors reaping the benefits of fraud, risks are few. By operating offshore (easy to do in this digitally connected world) and avoiding the ire of their originating countries, fraudsters are free to use resources to target advertiser media dollars, working through intermediaries (often positioned as accepted constituents of the ecosystem) to extract illicit profits.