Two Democratic U.S. Senators on Monday asked Federal Trade Commission Chair Edith Ramirez for answers on how her agency can increase regulation of ad exchanges and help curb bot traffic.
Sens. Mark Warner (Va.) and Chuck Schumer (N.Y.) penned a letter to Ramirez as concern over ad fraud has increased among digital advertisers. The Democrats are asking the FTC for potential reforms of ad exchanges and possible additional industry oversights, in addition to ways for law enforcement to better coordinate with the private sector on enforcement.
“Bots plague the digital advertising space by creating fake consumer traffic, artificially driving up the cost of advertising in the same way human fraudsters can manipulate the price of a stock by creating artificial trading volume,” the senators wrote in the letter. “It remains to be seen whether voluntary, market-based oversight is sufficient to protect consumers and advertisers from digital advertising fraud.”
In the political space, plenty of digital consultants have spoken out on the issue and noted that firms should be educating candidates on the dangers of bot traffic and cyber criminals, not just pitching them on services or contract terms.
Campaign industry reaction to the senators’ letter was initially welcoming.
“It's fantastic to see ad fraud being addressed by Congress. Any effort, Republican or Democrat, to improve the current state of ad fraud is encouraging,” said Ashleigh Grant, director of political accounts and strategy at IMGE, a Republican digital firm. “While individual firms and organizations can work to combat ad fraud for their clients, a holistic effort will continue to improve the space for all who are impacted, both online advertisers and consumers alike.”
Jim Walsh, the co-founder and CEO of DSPolitical, underscored the role of responsive digital consultants in navigating the online ad world and mitigating ad fraud.
“Better metrics exist to measure the effectiveness of online ad campaigns than impressions, clicks, and video completion rate,” Walsh said. “We work closely with our technology partners to ensure that our clients are not victims of ad fraud, and we are proud to have partnered with the Analyst Institute on studies that show that real people have recalled seeing the ads we serve, and that those ads have caused measurable, significant persuasive lift.”
Moreover, the Interactive Advertising Bureau, an industry trade group, pointed to the launch of the Trustworthy Accountability Group, or TAG, two years ago as a sign the industry is taking self-policing seriously.
“A central pillar of TAG is to enhance accountability and transparency in the digital ad industry. To that end TAG just recently launched the ‘Certified Against Fraud Program,’ a seal program that will recognize companies that have agreed to comply with a set of guidelines related to their specific role in the digital advertising supply chain,” Dave Grimaldi, an executive vice president at IAB, said in a statement.
In their letter, the Democratic senators cited the White Ops and Association of National Advertisers report that estimated ad fraud will cost advertisers over $7.2 billion in the next year alone.
In an email, White Ops CEO Michael Tiffany said this effort could have wider repercussions for online activity. “Ad fraud is the economic engine that makes botnets so profitable,” he said. “If we can end this particular crime, it will have a far-reaching ripple effect on the entire black market for malware.”
Meanwhile, the senators also pointed to a January 2015 study that found “as much as 98 percent of all ad clicks on major advertising platforms such as Google, Yahoo, LinkedIn and Facebook in a seven-day period were executed not by human beings, but by bots.”
Those fraudulent clicks could help fund organized crime. Warner tweeted: “Here's an amazing fact: by 2025, the digital ad market could be 2nd only to drug trafficking as largest revenue source for organized crime.”