FRIDAY AUGUST 19th 2022

Streaming Video Advertising’s Dirty Secret

The data is in: streaming has finally overtaken cable as the most popular source of television content in the U.S.

Nielsen’s latest Total Audience report shows that, as of July, 34.8% of all TV content consumed by Americans came from streaming services like Netflix and Disney+, while only 34.4% came from cable providers like HBO.

This is a major shift from just a few years ago, when cable was still the dominant source of television content. But traditional TV, which includes broadcast and cable, still accounts for a majority of television viewing.

But as the industry has grown, so has the incidence of advertising fraud.

According to a report by Method Media Intelligence, a digital ad measurement firm, one group of bad actors has been able to scam as much as $10 million a month from ad budgets that were supposed to go toward connected TV, or CTV, like streaming platforms.

However, that’s not Video Advertising Dirty Secret.

The Dirty Secret is that this is easy to solve, but very little is being done about it in order to generate enormous (fraudulent) revenue

Method Media Intelligence estimates that as much as 50% of programmatic requests in CTV are counterfeit. 

One of the ways fraudsters are scamming ad buyers is by making fake CTV ad calls using mobile apps like Grindr. Where they had previously manufactured fake display ads and video ads, criminals are now manufacturing fake CTV ad impressions, simply by calling it CTV ad impressions instead of display and video ads, in order to get 10X higher CPMs.

One of the CTV scams "involved 28.8 million household IP addresses, spoofed about 3,600 app installs, and generated 5.8 billion fake video views." This scam was able to generate over $200,000 in fraudulent revenue.

Another recent example of streaming advertising fraud involved a scheme that used a botnet to generate millions of bogus views for a cryptocurrency-related video. The video was viewed over 200 million times, resulting in over $80,000 in fraudulent revenue.

So why is there so much fraud in CTV? There are a few reasons:

First, because CTV is still a relatively new medium, there is a lot of confusion about how it works and how to best exploit its potential. This confusion creates opportunities for fraudsters who can take advantage of the lack of knowledge and trust among players in the ecosystem.

Second, CTV offers many opportunities for dishonest actors to game the system. For example, because CTV ads are often sold on an impression basis, fraudsters can easily generate fake views by using bots or other automated means. Additionally, because CTV ads are often delivered through ad networks or exchanges, it is easy for fraudsters to spoof legitimate traffic or inject fake ads into the system.

Finally, CTV has been slower to adopt anti-fraud measures than other digital channels such as desktop and mobile web. They are looking for quick bucks and know that if they cut off as much of 50% of their revenue because of fraud, they won’t look so good to investors

So, what can be done, and what methods could easily help solve the fraud problem in Streaming?

When viewers power down their TV without quitting the CTV app, this can cause programming – including ads – to run while the viewer isn’t actively using the device. This can lead to ad fraud, as advertisers lose out on potential impressions and clicks.

But a new study from DoubleVerify shows that ad fraud is 83% less likely to occur when advertisers tailor their campaigns for “fully on-screen” CTV environments. The study looked at three different types of fraud: invalid traffic (IVT), non-human traffic (NHT), and domain spoofing.

For the study, DoubleVerify used data from over 2.5 billion video ad impressions across both desktop and CTV platforms. They found that the incidence of invalid traffic was 3% on desktop, compared to just 0.5% on CTV. And for non-human traffic, the incidence was 5% on desktop and 1.1% on CTV.

Another simple way to prevent fraud is brought to us by fraud researcher Augustine Fou: While there are many ways to protect yourself from streaming fraud, the best way is to ensure that you are only streaming from legitimate sources.

 Legitimate sources are those that have been authorized by the copyright holder to stream their content. This can include major networks like ESPN, History Channel, and CBS, as well as other major providers like A&E and HGTV. These aren’t things like the “ESPN Exchange” which isn’t on ESPN.

It's obvious that something could be done, but many companies just aren’t interested in taking the appropriate steps to ensure fraud isn’t on their properties. Companies like Roku know that screensavers and other questionable programs are creating fake ads on their platform, and they are just ignoring it for the fraudulent revenue. This raises some questions that if they know this, what is their liability both criminally and civilly? What do you think should be done to help prevent fraud and expose these scams?

Quick
 Q&A with Eran Yahalomi, CEO of G-Mana.
G-Mana provides leading addressable TV & over-the-top (OTT) Dynamic server-side ad insertion monetization (SSAI) solutions for linear, live or video-on-demand (VOD) content. We help the broadcasting and streaming industries create and simplify their content monetizing capabilities.

What are the current challenges for publishers and broadcasters with OTT & CTV advertising monetization?

 There is a gap between how publishers traditionally manage over the air ad sales and operations, and how things are accomplished in today’s digital landscape. Another challenge is ad break detection. Many broadcasters find it hard to align OTT ad break scheduling with OTA breaks. We have great tools that can solve this intelligently and in an operational oriented way. Scheduling via black frame detection is just one example.
 

How do you see the evolution of the addressable TV industry over the next year? Five years?
Advertisers will be demanding advanced abilities, for example customizable targeting that includes targeting via contextual and deterministic data. With more options and more available addressable inventory, advertisers’ ability to reach specific audiences with relevant content will become even stronger.

As for publishers, they will continue to enjoy the countless opportunities offered by digital environments. In this respect, G-Mana enables new ad formats like side-by-side ads/overlays/underlays – which unlock more inventory and unleash new opportunities.

Can you tell us a little bit about G-Mana?

G-Mana provides leading addressable TV & over-the-top (OTT) Dynamic server-side ad insertion monetization (SSAI) solutions for linear, live or video-on-demand (VOD) content. We help the broadcasting and streaming industries create and simplify their content monetizing capabilities.

As we witnessed the “over the air” (OTA) to “over the top” evolution, we saw firsthand how broadcasters struggle to sustain their business as their familiar monetization models were left behind. On the other hand, today’s digital word can provide more targeted, effective and measurable methods for ad-supported content. 

Our vision is to connect the broadcasting and digital worlds via an innovative approach that simplifies the path to creating and maintaining a sustainable revenue stream.

TheRundown
At least 10 News Stories you Must Know
(but don't have time to read!)

1. CKE Restaurants, the parent company of fast food chains Carl's Jr. and Hardee's, has teamed up with Twitch for a series of sponsored livestreams focused on a new menu item. The partnership was announced in a press release yesterday. CKE Restaurants polled social media followers over the past several weeks about their favorite ingredients for the new dish. The findings laid the groundwork for a Culinary Showdown livestream on Aug. 22 where Twitch partner Storymodebae and CKE Chef Owen Klein will devise the final menu item using the most popular ingredients. The livestream will take place on Storymodebae's Twitch channel at 6pm EDT/3pm PDT and will be available to watch for 24 hours after that. This is the first time that Carl's Jr. and Hardee's have partnered with Twitch for a sponsored event.

2. It's no secret that the COVID-19 pandemic has had a major impact on the video game industry. With people stuck at home and looking for ways to entertain themselves, gaming saw a massive uptick in players and viewers alike. However, like a lot of other digital categories that saw a boost during the pandemic, growth has come back down to earth in recent months. Video game sales are aligning with an overall less certain economic picture, and it's clear that the pandemic has had a major impact on the industry. 

3.  The Big Ten Conference has ended a decades-long relationship with ESPN in favor of seven-year distribution rights agreements with NBC/Peacock, CBS and Fox. The deals, reportedly valued at more than $1 billion per year, are the largest in college sports history. The rights commence July 1 and run through the 2029-30 season. Under the terms of the agreement, each network will televise approximately 140 live events per year, including 40 football games, 150 men's basketball games and 250 Olympic sports events. The conference will also launch a new television network in August 2021 that will be carried on all three networks. In addition, the conference has entered into a joint venture with IMG College to create and distribute digital content across all platforms. The agreement also provides for the creation of a new over-the-top service that will offer live and on-demand content to fans who do not have a pay-television subscription.

4.Advertising is all about trying to influence consumer behavior, so it makes sense that an ad agency would want to team up with a research and development unit focused onbehavioral science. The Consumer Behavior Lab (CBL) is a new partnership between New York-based ad agency XenoPsi and London ad services consultancy Astroten. The CBL will explore how behavioral science can be used to improve marketing messages and the channels where those messages are delivered. By understanding how consumers behave, the CBL will be able to help brands more effectively reach their target audiences. So far, the CBL has conducted research on topics like decision-making, memory, and emotion. In the future, they hope to tackle issues like consumer behavior in digital environments and the role of social media in influencing consumer decisions. With the help of the CBL, XenoPsi and Astroten hope to give their clients a leg up in the increasingly competitive world of advertising.

5. Yahoo has partnered with Comscore to expand its connected TV (CTV) brand safety tools and contextual segmenting capabilities in its demand-side platform (DSP). The Yahoo DSP will integrate Comscore Activation, a set of pre-bid inventory filters powered by contextual artificial intelligence (AI) and intelligent categorization technology. This will let brands combine various segments and descriptive filters to target specific audiences on CTV platforms. In addition, Comscore's Plan Metrics tool will be integrated into the Yahoo DSP, allowing brands to measure the reach and frequency of their CTV campaigns. With these new capabilities, Yahoo will provide brands with more control over their CTV campaigns andhelp them to better understand the impact of their ads.

6.If you're looking for ways to improve your CTV ad reach and measurement, Google has introduced three new features that could help. Guaranteed audiences backed by Nielsen Digital Ad Ratings (DAR) helps ensure your CTV campaigns are reaching core audiences. Plus, you pay only for the ad impressions that reach your desired ages and demographics, measured by DAR. The Advanced Programmatic Guaranteed Solution offers similar guarantees, but also allows you to target specific viewers based on their past viewing habits. And finally, through Viewership Affinity Segments, you can target viewers based on their affinities for certain topics or genres. So whether you're looking to reach a specific audience or just want to improve your CTV advertising overall, these new options from Google could be just what you need.

7. No surprise that Borrell's recent survey finds that only 3% of local advertisers use Amazon ads compared to 36% for Google and 58% for Facebook. The local factor may not make much difference on the platform. However, Amazon is having a strong Q3, according to Tinuiti which manages over $400 million in Amazon ad budget. So, even though the local thing may not matter much, Amazon is still a platform worth considering for advertisers. Who knows, maybe in the future the local thing will make more of a difference. For now, though, it's all about Q3 for Amazon.

8. The CFPB has issued an interpretive rule stating that digital marketing providers are subject to the CFPB’s jurisdiction. The rule clarifies the scope of companies that are “service providers” under the Dodd-Frank Act, and therefore subject to the CFPB’s supervisory and enforcement authority. The rule covers a wide range of activities, including the identification or selection of prospective customers, the selection or placement of content to affect consumer engagement, and purchase or adoption behavior. The rule is likely to have a significant impact on the digital marketing landscape, and will require companies to take steps to comply with CFPB regulations. disobedience could result in supervisory action, civil money penalties, or other enforcement action.Digital marketing providers should review the rule carefully and take steps to ensure compliance. Additionally, companies should consider whether their activities fall within the scope of the CFPB’s new rule and take appropriate steps to ensure compliance. failure to do so could result in serious consequences.

9. Prime Video has announced that it will be dropping the Amazon name from its streaming moniker. This change comes as part of a larger rebranding effort by the company, which also includes changes to the user interface on the Prime Video platform. While some have speculated that this move is intended to distance Prime Video from its parent company, Amazon, it is more likely that the streaming service is simply trying to establish itself as a separate brand. In any case, the change is sure to be welcomed by many users who have been unhappy with Amazon's recent decisions regarding its Prime Video platform.

10. As anyone who has ever been stuck on a long plane ride with nothing to watch knows, the ability to download shows and movies for offline viewing is one of the best things about Netflix. However, it looks like the company's new ad-supported tier will not include this feature. According to code found inside the Netflix iPhone app, users of the ad-supported tier will only be able to stream content, not download it. This is not surprising, as giving users the ability to download content would make it much easier for them to skip the ads. However, it is still possible that Netflix could change its plans between now and the launch of the ad-supported tier. If it does, we hope that offline viewing will become a feature you can pay extra for, as it would be one distinguishing factor between the two tiers.

11.The percentage of U.S. TV watchers who say they use a free, ad-supported streaming service like Roku Channel, Pluto TV or Freevee ticked up 9 points to 55% in the first five months of 2022, according to a survey of 3,004 U.S. consumers conducted by Hub Entertainment Research. Meanwhile, the percentage of those who report using a partially ad-supported tier of a subscription streaming service, including Hulu + Live TV and YouTube TV, rose 4 points to 21%. The total number of US consumers using some form of ad-supported TV has thus reached 76%, up from 67% at the end of 2021. The data suggest that the cord-cutting trend is not only continuing, but accelerating, as more and more viewers flock to streaming services that offer free or low-cost alternatives to traditional cable TV packages. This shift is likely to have a major impact on the advertising landscape, as marketers seek to reach consumers through new channels.

12. According to YipitData's research, Shopify is facing a roadblock in its plan to fix past missteps in overestimating e-commerce demand. The Canadian company (SHOP.TO) added just 71,000 net merchants in the first half of 2022, compared to 680,000 at the peak of the pandemic in 2020. Businesses stung by rising costs and lower consumer spending are shying away from Shopify's platform, and this is causing problems for the company. In order to fix this issue, Shopify needs to find a way to attract more businesses to its platform. This may be difficult, as many companies are now hesitant to invest in e-commerce due to the uncertain economic climate. However, if Shopify can find a way to convince businesses that its platform is worth the investment, it may be able to overcome this roadblock and continue growing.

13. U.K.-based online payments firm AstroPay launched a new affiliate program. Under the program, affiliates can earn up to 15% commission on transactions processed through AstroPay's platform. The program is open to anyone with a website or blog that targets consumers in emerging markets.

The Watercooler
Impress your Co-Workers with these useless facts about marketing

The most expensive commercial ever was created by Chanel in 2004. It is a fully-fledged romance short film, featuring a forbidden love which is much reminiscent of Moulin Rouge – for more than one reason. Its price was 33 million dollars, 3 million of which were given to Nicole Kidman, who casted in the ad. It is a truly beautiful one, in truth. You can watch it below:

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