Report: Complexity and risk to advertisers on the rise in digital media landscape

Global ad fraud worth billions and new industry alliance formed to manage content on digital platforms

Global ad fraud is worth $22.4 billion and Australia and the Asia-Pacific region, excluding China and Japan, accounts for 1 per cent of the share of it, according to new research from GroupM.

The media agency found the average ad fraud rate, or invalid traffic (IVT), which is reported ad traffic that should be removed from payable impression counts, sits at 10.8 per cent globally. The figure for the region, without China and Japan, is 1.6 per cent.

The findings follow the establishment earlier this year of the Global Alliance for Responsible Media, of which GroupM is a founding member, the industry’s latest effort to moderate content across platforms. 

While digital media has provided more precise, behavioural communication with customers, it has also increased the complexity and potential risk of harm to advertisers. According to GroupM research, Australia is by no means immune from the threats.

The group's brand safety business, which specialises in digital supply chain risk, outlined four main areas of risk. The key risk areas are reputational risk on social platforms, financial and reputational risks to brand safety in programmatic, the legal risk from privacy compliance, and financial risk from ad fraud through invalid traffic. Social platforms, in particular, are at once the biggest risk environment and the least open to independent, third-party measurement.

In terms of social responsibility and contextual risk, GroupM said artificial intelligence (AI) can be utilised to find readers who will like and share vitriolic or illegal content. The report recommended brands approach contextual brand safety with zero tolerance for advertising placed adjacent to harmful content, which, while hard to guarantee, will go some way to mitigating potential issues. 

The research also showed contextual brand safety in programmatic advertising has not been as big a problem as brand safety on social platforms, although there are still issues with inappropriate adjacencies with the wrong content.

Privacy requirements are another risk area. GroupM said GDPR in the UK and Europe, for example, has forced brands to prioritse privacy protections and resulted in new standards for third-party audiences, data vendors and greater transparency for consumers. 

When it comes to programmatic ad fraud potential in Australia, there are 264 open exchanges serving 19 billion impressions per month. However, GroupM found not all these exchanges have 100 per cent fraud-free environments. The company also removed the vast majority of these sellers based on the key criterion for inclusion - running an office in Australia.

The report argues impending privacy legislation around the world, improved verification technology and the slow but steady impact of marketplace pressure on walled gardens will see advertisers having greater transparency, control and awareness to manage risk in the face of growth.

GroupM concludes with the predication demand from marketing for media sustainability along with regulatory pressure, such as increased privacy provision, will put pressure on the way digital media effectiveness and suitability is measured.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.  

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