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Industry Trends

The VAST Arbitrage Ad Fraud Scheme – And What You Can Do About It

4 Minute Read | March 9th, 2021

Kylene Jones

Kylene Jones
Content Marketing Manager

Ad stacking is stacking the odds against publishers. Learn how VAST Arbitrage is affecting the industry and how Smaato can help protect your brand.

We care about our publishers and want to keep them from being unduly penalized. As ad placements evolve, so too does malicious ad fraud. As publisher reputations and advertiser dollars are at stake (not to mention user experience!) we wanted to take a moment to share insights on this unfortunate trend, and ways to help protect your brand.

Publisher Reputations & Advertiser Spend are at Stake

Ad fraud has always plagued the ad tech industry, and our industry has always adapted to combat it. Lately, though, there’s a new, fake ad trend in town. It doesn’t involve bot traffic, or click farms. Instead, this sophisticated fraud originates from the demand side and reaches real users, evading detection until it’s too late. Bad actors are sneaking multiple, high-cost video ads into low-cost banner ad placements.

The Scheme

Once they secure a low cost banner ad placement through the open auction, the scammer poses as the very publisher that had the ad space available. By posing as a publisher and spoofing a real application, these scammers can then join a different exchange, where they offer up the placement to other advertisers. Only, they’re not offering a banner ad: they’ve disguised it as a high-value video opportunity. They then accept multiple bids for the same slot, and stack the videos one on top of the other. They place a static display ad – what the real publisher originally requested – on “top,” and deliver it back to the true publisher. The publisher receives what appears to be exactly what they expected, and serves the ad.

When a user sees the banner ad, behind the scenes, all the video ads trigger and play. The ads are, technically, served to a real user, even though the user can’t actually see them. As such, the impression triggers as valid. The video advertisers pony up payment for the served impression, and the scammer pockets the difference between what they paid for the banner ad, and what the (multiple) video placements paid.  This is VAST arbitrage. It hurts the publisher’s reputation, the advertiser’s wallet, and the user’s experience, as these stacked ads drive up data usage and overheat the device.

It’s tricky to flag, and difficult to spot. The “packaging” says what it is supposed to – so it’s delivered and received without detection.

At Smaato, we understand that there is a difference between publisher fraud and marketer fraud. The publisher shouldn’t be blamed for opening the door to something that was intentionally, maliciously mislabeled.

Unfortunately, that’s what can go wrong when working with non-trusted partners. Publishers and marketers are both victims here. Yet many media outlets, anti-fraud tools, and marketers are unfairly blaming publishers for this fraud.

How We Can Help

Publishers are our priority. We built our platform to enable publishers to take full control of their monetization strategy. At Smaato, we want to ensure our publishers are not blamed when something goes wrong outside their control.

We have a dedicated team of experts and sophisticated systems designed to stop fraud in its tracks. We carefully vet all marketers, advertisers, DSPs, and publishers before they have a chance to use our platform, giving us an opportunity to proactively block potentially fraudulent activity. In tandem with our internal alert system, our dedicated market quality team works 24/7 to eliminate fraudulent activity. This keeps our marketplace clean and secure for publishers and marketers alike.

To stop sophisticated fraud schemes, collective action is necessary. We must all work together to not only identify fraudulent activity, but also to blacklist these malicious partners. Because these fraudsters can continue to harm unsuspecting publishers, and our industry as a whole, if left unchecked, it isn’t enough to individually block them. If they are still within your network, they can find another way in. That’s why collaboration and cooperation are critical to help mitigate the risk.

Want to learn more about our protected marketplace?

Learn More

Have more questions about VAST arbitrage, or anything else? We’re here for you. Get in touch.

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