Supply & Demand 101: Fraud vs Real

In the battle against online ad fraud and viewability, success has a very real impact on inventory price. At the macro level, weeding out fake impressions automatically constrains supply.

If you were to snap your fingers and eliminate billions of fraudulent impressions from the ecosystem every day, that would be a good thing, right? Depends who you ask.

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I think we can all agree that eliminating impression fraud from our industry is absolutely where we need to go for long-term viability. However, if you are a savvy programmatic media buyer today, you may not want the fraud to get cleaned up. If it does, that instantly means more competition for you.

Prices are expected to increase in the display marketplace 20% by 2018 as a direct result of this quality supply constraint.

Today's highest-performing programmatic buyers know how to sift through the garbage impressions and pick out the gems. They have toiled away at creating custom-curated audience segments. They have at least one viewability vendor of choice helping them on the prebid front. They are constantly filtering out sites/sellers that are cookie bombing campaigns. And they are driving true performance with a nominal increase in average CPMs and CPAs.

That is all because the "dumb money" is distracted.

Less sophisticated buyers are out buying up all they can eat of the magically cheap [garbage] inventory.

If you can get over this guy's annoying hand movements, this explains the basics of viewability pretty well.

On a per-impression basis, the savvy buyer is bidding against other savvy buyers. The amateurs are lowballing these impressions because they believe that the campaign should be clearing at a cheaper price since they are easily able to win impression elsewhere. Little do the ignorant know, they're buying vapor.

When you eliminate heaps of fraudulent impressions from the marketplace, what happens? The buying community is forced into more direct competition for each impression. The ignorant media buyer is now competing more regularly with the sophisticated buyer, not because they know any better, but rather because they have nowhere else to go.

For the next few years, quality programmatic media buyers will be worth their weight in gold. They know the game is rigged, but know how to play the game well.