CTV/OTT Streaming Video Ads—Are You More Exposed To Fraud?

More folks are staying home due to the coronavirus lockdowns. Data confirms more folks are streaming video too. Connected TV (CTV) and OTT (Over-The-Top) ad impression volumes are also up over the last 2 months. But so is ad fraud. In the case of CTV/OTT fraud, bots pretend to be smart TVs and streaming devices like Roku in order to generate video ad impressions. Marketers buy these fake impressions thinking their ads were shown to humans watching video streams. But instead the ads were shown to binging bots.

Easy to Commit

CTV/OTT fraud is very easy to commit. In most cases, fraudsters simply have to declare their bots to be some kind of streaming device. It’s very popular to do this now because video ad impressions are much more lucrative. They sell for CPM prices that are often ten times higher than other forms of digital ads. Some amateur bad guys are sloppy and you can see missing data, old versions, and even simple spelling errors like “Rokku.”

In the case of the largest streaming service Roku, other companies can create streaming apps and make them available through the Roku ecosystem, much like third parties create mobile apps and make them available through Google Play. The opportunity for fraud is also the same because those third parties can increase their own ad revenue by using fake streaming devices.

This form of fraud has been around since the beginning of CTV ads, but the volumes have also dramatically increased recently as more ad dollars flow into this channel chasing human audiences. Of course some of the volume increases come from real humans streaming more, but fraudsters are using this opportunity to increase fraud volumes too, under cover. Note the recent discoveries of large CTV/OTT fraud schemes. These operations - codenamed DiCaprio, Monarch, Icebucket — were making millions of dollars, from billions of faked impressions, before being discovered.

Easy to Hide

In addition to being easy to commit, other fraud schemes continue to elude detection because it is also easy to hide. The amateurs mentioned above have been caught and more will be stopped in the future. But much of the impressions in CTV/OTT cannot be fully validated due to limitations of the technology. More specifically streaming stick devices don’t run full web browsers. So typical detection technologies don’t work well, or don’t work at all, in measuring for fraud in these types of ads. Whiteops disclosed in their latest fraud report that video ads like these are only 1/3 “validatable at the highest level” — i.e could be measured fully, given the limitations of the tech.

Furthermore, a common practice known as SSAI (server-side ad insertion) exacerbates the problem of fraud because it makes it easier for fraudsters to hide among otherwise legitimate ads. Without getting too technical, SSAI means ads are inserted on-the-fly into video streaming content. This is done while the video streams pass through data centers on the way to the streaming device in the household. Normally, when data centers are detected in the data, it’s a sign of ad fraud because humans don’t access the internet through data centers. But in the case of CTV ads, SSAI means there’s a scenario in which ads detected in data centers is legitimate. This fact made it much easier for data center bots to openly commit CTV fraud because it could be legitimate, until proven otherwise. CTV fraud can thus hide in plain sight.

But Also Easy to Avoid

Given the ease of committing CTV fraud, and the relative inability to validate most of the impressions, how would a marketer avoid getting scammed? Turns out, that’s easy too — buy as much direct as possible. If you want your streaming ads to show up on Hulu, buy from Hulu. They won’t be trying to rip you off. If you want your ads to run on ESPN, buy from ESPN directly, and save all the money that flow into reseller, ad exchange, and other middlemen’s pockets. And finally, buy from Roku but use a very very strict whitelist approach — selecting those Roku apps that you’ve used, seen others use, or have even heard of. Exact same caveats and common sense apply here, as with mobile apps. If an app that no one has ever heard of is generating enormous numbers of impressions in your campaigns, it’s unlikely from real human activity.

So, yes, there is much more fraud in CTV. But you can protect yourself with common sense and good buying habits.