U.S. ad spend on Connected TV (CTV) is estimated to reach $21 billion in 2021. This figure is further projected to reach $100 billion by 2030. When media investments rapidly increase in a given channel fraudsters are usually not far behind.

Bad actors follow the money and CTV presents an enticing opportunity. With eCPMs of $20 and higher, and technology standards still being developed, the scene is ripe for fraudsters to take advantage of unsuspecting advertisers.

The Connected TV Ad Fraud Problem

The CTV ecosystem is diverse. Device manufacturers, ad tech vendors, and content providers all participate at varying stages. Bad actors take advantage of the number of players involved in the ecosystem as well as the still-developing technological standards to steal ad dollars.

DoubleVerify, an ad tag verification vendor, uncovered a scheme dubbed SmokeScreen that utilized screensaver apps to generate fraudulent CTV impressions. The screensavers would hijack the CTV device to generate fake impressions. What is truly scary is that the scheme was running even when the device’s screen was off.

In 2020 a botnet called Pareto took advantage of the muddied CTV ecosystem to impersonate over one million Android devices. The bots appeared to be real people watching content on real CTV devices. In reality, the 650 million or so bid requests generated per day were all non-human. Another botnet, dubbed SneakyTerra, was identified by DoubleVerify, but not before spoofing more than 2 million devices every day and defrauding advertisers out of $5M per month.

It’s not just the fragmented ecosystem that allows for challenges to persist. The technology that consumers use to access apps such as Hulu and YouTube where ads are served also plays a role. The technology utilized by smart TVs to serve personalized ads to consumers provides openings for bad actors to insert fraudulent ad requests.

A common CTV scheme, also found in other digital channels, is spoofing. This is where the bad actor sends fake ad requests that appear as if they are coming from legitimate CTV devices. Rather than appearing on a real device and in front of real people, the ads are shown to bots. The advertiser will have paid for impressions that they thought were real, but an ad or audience may have never existed.

How CTV is bought also presents an opportunity for bad actors. As advertisers increasingly shift to purchasing programmatically the threat landscape widens. Opacity in the supply chain, a fragmented ecosystem, and multiple buying platforms increase the risk of waste.

Protecting Your Connected TV Media Dollars

Certain fraud mitigation strategies will require CTV device manufacturers to build additional technology into their devices. While advertisers cannot control the device manufacturers, they do have tools at their disposal to protect their CTV media dollars.

Know Your Counterparty

The first and easiest step is to know your counterparty. Some questions to ask your in-house team or agency include:

  1. Who are we working with on the supply side? Are they reputable?
  2. What technologies and standards are the sellers we work with adopting to identify and reduce fraud?
  3. How many intermediaries are between us, the advertiser, and the publisher?

The answers to the above will help lay a roadmap for protecting your CTV ad dollars.

A supply-side partner isn’t reputable? Drop them.

Are sellers slow or resistant to adopting industry standards? Engage with the seller to discover why. Are there technical limitations that increase the time to adoption? If they simply don’t want to, then they have made the decision to seek new partners an easy one.

Multiple intermediaries between the advertiser and publisher drive opacity and fees. If the supply chain is congested then culling the number of vendors included may help reduce fees and waste. Seek vendors that require the fewest intermediaries and that provide the highest level of transparency.

Use Your Voice (and Dollars)

Advertisers control the dollars that flow into CTV, so use the leverage this provides. Ask media vendors and ad tech partners what they are doing to keep up with industry standards (i.e., are vendors on the supply side adopting transparency standards such as the IAB Tech Lab’s sellers.json) and encourage them to do more. Establish guardrails for your brand on the amount of fraud you are willing to tolerate before action is needed. MMi best practice is to keep benchmarks below 1%.

Solving CTV ad fraud requires collaboration among advertisers, publishers, and ad tech vendors. Organizations such as the IAB TechLab, of which MMi is a member of and participates in the Open Measurement working group, have working groups dedicated to addressing specific industry issues. Join a working group and represent the needs of advertisers when discussing new standards and technical solutions.

CTV presents a new and exciting opportunity for advertisers to engage with consumers. With any new development, initial challenges are expected. Advertisers understandably want to explore CTV’s potential, but they must do so with eyes wide open and strategies in place to mitigate waste.

Notice: Any reference to an ad tag verification vendor should not be construed as an endorsement or recommendation. MMi is verification tag vendor agnostic.