25% of programmatic traffic fails validation, raising ad fraud concerns

A new report by Pixalate reveals concerning trends in the transparency and security of programmatic advertising. The Q4 SupplyChain Object (SCO) Validation Report analyzes data from Q4 2023, highlighting the prevalence of invalid traffic (IVT) and the need for stricter validation measures.

Key findings:

• 25% of programmatic traffic failed Pixalate's SCO validation check, indicating potential issues with the legitimacy of the supply chain.
• Traffic failing validation had a 64% higher IVT rate, suggesting a significant association with ad fraud.
• The report observed a 32% increase in traffic failing validation compared to Q1 2023, raising concerns about a potential rise in ad fraud attempts.
• Longer supply chains (with more intermediaries) exhibited an 80% higher average IVT rate compared to shorter chains, highlighting the increased risk associated with complex ad networks.

Importance of SCO Validation:

The SupplyChain Object (SCO) is a data structure within the OpenRTB protocol that aims to provide transparency into the programmatic advertising supply chain. However, Pixalate's findings demonstrate that relying solely on SCO data might not be sufficient to ensure complete security.

“Our latest SCO report highlights the importance of transparency in the supply chain and the need for vigilance when depending on SCO,” said Amit Shetty, the VP of Product at Pixalate. “Our research found that 25% of traffic with SCO in Q4 2023 did not pass our validation check, demonstrating the need to perform further validation and ensure that all the sellers involved are approved by the publisher.”

Pixalate's SCO validation process utilizes IAB Tech Lab standards and analyzes data from the OpenRTB bid stream to assess the legitimacy of the supply chain and ensure a direct relationship between publishers and the first seller.

Recommendations:

The report emphasizes the importance of:

• Implementing thorough validation procedures beyond SCO data.
• Utilizing reputable ad fraud protection solutions.
• Maintaining vigilance and awareness of potential risks within the programmatic ecosystem.

By adopting these measures, advertisers can mitigate the risks associated with invalid traffic and ensure the effectiveness of their programmatic advertising campaigns.