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

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Ian Trider is VP of RTB Platform Operations at Basis Technologies, a leading comprehensive, automated and intelligent SaaS platform for marketers.

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.
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