Subprime Attention Crisis by Tim Hwang

Author:Tim Hwang
Language: eng
Format: epub
Publisher: Farrar, Straus and Giroux

Defusing the Crisis?

The problems of declining attention, ad blocking, and fraud that we have discussed are well-known within the programmatic advertising industry. They all represent structural threats to the continued growth and vitality of the online advertising markets and have been treated as such by the sector. This has led to a variety of attempts to intervene and fix the ecosystem, though it is far from clear whether these efforts have been effective in changing the overall picture.

Companies responsible for purchasing large quantities of advertising increasingly scrutinize their marketing agencies and demand greater accountability.33 Buyers have pressured big platforms like Facebook and Google to allow more extensive third-party involvement in assessing the veracity of ad performance metrics.34

Technological solutions have also been developed. Introduced in 2017, ads.txt is one standard endorsed by the IAB to combat the problems of domain spoofing. The IAB encourages publishers to host a text file on their web servers containing an authoritative list of the sellers with permission to sell their inventory.35 At least in theory, this would allow buyers to assess whether a vendor on a programmatic exchange is engaging in domain spoofing. Driven by enthusiastic adoption from Google, ads.txt use has risen sharply; among the top thousand sites selling programmatic ads, 57 percent now host these reference files.36

The fight to save the structure of online advertising also means fighting ad-blocking software. The advertising industry has worked to erode the effectiveness of ad blockers.37 This is sometimes facilitated by the ad blockers themselves, who monetize their software by charging a premium to advertisers in exchange for access to people who block ads. Adblock Plus—one of the most popular companies operating in the space—launched its Acceptable Ads Platform in 2016, effectively creating a new ad network through which advertisers meeting certain criteria could access the ad blocker’s user base.38

The other approach taken by the advertising industry has been to grow past the problem. Rather than take on the daunting task of repairing existing marketplaces plagued by fraud and subprime attention, the strategy is to expand programmatic advertising into new media where it might capture higher-quality attention. The expansion into video, mobile platforms, and games reflects a strategy to create an alternative that might allow the industry to dump the existing workhorse of display advertising.

Despite these multifaceted efforts, the fundamentals have not changed. Ad fraud continues to be a cat-and-mouse battle. When old vulnerabilities are patched up, fraudsters find new ways to extract money illegitimately from the marketplace. The net effect is that fraud in these channels is not only persistent, but on the rise. One industry analysis suggests that ad fraud will more than double in the coming years, eventually reaching $44 billion by 2022, an amount equivalent to about 9 percent of the overall digital ad spend.39

Tactics like domain spoofing remain effective even with the advent of tools like ads.txt. One 2018 report showed that while ads.txt did lower the rate of fraud, the overall rate remained high.40 Even supposedly “safe” domains still saw fraud in excess of 13 percent.

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