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16 March 2017

Ad Fraud To Cost Clients $16.4bn in 2017

Advertisers could be defrauded of $16.4bn in 2017 and the industry - media agencies, industry bodies and tech platforms such as Google and Facebook - has a duty to come together to tackle the problem, a new report has found.

The ‘What Happens Next: How to Reverse the Rising Tide of Ad Fraud’ study suggests the global cost of advertising fraud may until now have been significantly under-reported and accounted for almost 20 per cent of the spend on digital advertising in 2016.

The Times reported the findings of the report today. In a separate leader column, the paper reported criticism of the tech giants’ approach to tackling fake news and hate speech and their ability to profit from its distribution from a Home Affairs Select Committee session earlier this week. 

“When the Labour MP Yvette Cooper accused internet executives of “commercial prostitution” in a home affairs select committee session on Monday she was not far off the mark,” The Times reported. “Companies such as Twitter, Facebook and Google routinely publish false news stories and hate speech. Their approach to removing this content has been lackadaisical at best. They try to abdicate responsibility by calling themselves “platforms”, when in fact they are publishers. No one is fooled.

"Now Paul Chichester, director for operations at the National Cyber Security Centre, which is part of GCHQ, has weighed in. Technology firms, he says, are “huge global companies” whose responsibilities begin to rival those of a nation state. During the American election last year unscrupulous pseudo-journalists exploited the algorithms of search engines to make money out of fake news on trending topics. The threat of interference in the democratic process by hostile foreign governments is grave, and these loopholes make it all too easy. No wonder spooks are getting worried.

"The companies themselves are not nearly worried enough. They allow users to report content that they think is false or hateful, and then take down some of it. According to research just published in Germany, Facebook removes only 39 per cent of flagged content, while Twitter removes a mere one per cent.

“In any event, they should not be so passive about finding hateful slurs and misleading stories. By way of defence, they say they are platforms for free speech, not selective publishers with their own agenda, and so cannot impose too restrictive an editorial policy. This is a specious argument. Social media sites rely on their ability to curate content and direct advertisements at brands’ target markets.

“In this way they determine much of what their customers see, and this is clearly the role of a publisher. Their use of sophisticated “microtargeting” algorithms for this task likewise belies executives’ claims that their sites are too big and complex while their technology is too imprecise to root out hate speech and fake news.

“Other companies end up paying the price. Last month The Times revealed that adverts for well-known brands such as Mercedes-Benz and Halifax appeared without their knowledge alongside Islamic State videos. That means blue-chip brands are indirectly funding terrorists, thanks to Google’s deficient vetting processes.”

The separate report into ad fraud was commissioned by The&Partnership and m/SIX and carried out over a period of 12 months by Adloox. The&Partnership founder Johnny Hornby said: “These figures serve as a stark reminder that much still remains to be done in order to protect and nurture the future vitality of the digital economy.

“We have a duty to come together as an industry – from media agencies and industry bodies, to big-platform players like Google and Facebook; bringing in government help if we need it – in order to protect our own future and those of our clients.

“The big-platform players like Google and Facebook need to step up to the plate and engage with initiatives like those launched by TAG and JICWEBS. They also need to put much better preventative measures in place to ensure that offensive and politically inflammatory content – beyond the wider debate about whether it should be published at all – is not and cannot become ad-enabled.

“Appearing in the ad space next to compromising content is hugely damaging for any brand and, by standing by and allowing it to happen, the big-platform media owners are neglecting their responsibility to do the right thing by the valuable customers who buy ad space with them.

“Finally, the time has come for the Googles and Facebooks to stop marking their own homework, and allow specialist, third-party auditors inside their walled gardens – to verify the viewability, non-human traffic and brand safety scores they send back to clients. Only then will we truly break the back of the ad fraud problem.”