Spoofing: The New Danger

There's a growing problem in ad-tech. As exemplified by this scandal which victimized the Financial Times, shady companies are misrepresenting the ad inventory they have access to...

Ad fraud is a much-discussed headache for the digital advertising industry, but it wasn’t until Business Insider discovered arbitrageurs misrepresenting our own video inventory that we realized what a tricky problem it’s become.

We discovered it was happening when a displeased advertiser revealed the reason for their discontent: It was buying ads on the open exchange for significantly less than the private marketplace we had in place with them.

But here’s the thing. It was news to us that the advertiser had ever purchased any of our video inventory on the open exchange. Turns out they were buying ads from an unauthorized seller. More importantly, the ads never actually appeared on Business Insider.

We found that while the advertiser spent several thousand dollars on our ads – or so they thought – they actually purchased only a tiny amount of our inventory, less than $100 worth.

Determining how this was happening was tough. We spent dozens of hours working closely with various exchanges to track down shady sellers and get a clearer picture of how our ads were being misrepresented, including a painstaking effort poring through our inventory channels.

A few of our demand-side platform partners helped us track down the shady sellers. But once we got in touch with the sellers it was even more challenging to shut it down. One arbitrageur even threw up its hands: “We’re just the pipes, not the sheriff.”

Until then, while we knew fraud was happening in the industry, we also believed that because of tight controls we had in place that it wasn’t happening to us. What we learned is that there was something about the whole ecosystem that we first needed to uncover before being able to truly combat the fraud.

Who was buying our inventory and re-selling it? What entity was buying impressions and then multiplying them – by a factor of 10 – and reselling our inventory? And who was “spoofing” our valuable inventory?