What conflict of interest? 👀

The media industry is fraught with conflicts of interest and ethical dilemmas. From rubber-stamped certifications to marketers' willful blindness, the challenges are deeply rooted and pervasive.

Travis Lusk
Travis Lusk

Last month was a rollercoaster, right? Everyone was up in arms about YouTube's purported failures—both in ad placement quality and how it serves ads to kids.

And don't get me started on the ensuing confusion surrounding third-party verification vendors. "Wait, they can't measure what now?"

Meanwhile, industry associations that should be leading the way are reluctantly stepping into the spotlight. Some companies—let's just say, for argument's sake, Company X (you might know it as Twitter)—still boast their TAG Certified status as if it's a badge of honor.

So let's address the big issue we're all tip-toeing around: the conflicts of interest that plague our industry and degrade trust.

Why is this even a thing?

Two main reasons explain why conflicts of interest are especially problematic in digital advertising:

  1. Blind Trust: "Trusted" third-party agencies are making and carrying out recommendations, holding an inordinate amount of power over media decisions.
  2. Complex Landscape: The media business is already complex, and the digital component just amplifies that complexity tenfold.

Look, conflicts of interest aren't unique to our field. But the sheer scale of the digital advertising industry—combined with a glaring absence of regulation—makes our situation uniquely challenging.

The Cash Distribution Business

When it comes to media agencies, let's get one thing straight: they're in the business of moving money. Their bread and butter come from facilitating deals that appear to benefit everyone, with as little friction as possible.

In most cases, those benefits are real; the agency truly does deliver meaningful results at a reasonable cost. But let's be honest—there are plenty of times when the outcomes are a lot murkier.

The key here is the smooth flow of money—from brands to various players in the media ecosystem. The smoother, the better.

Damage Control 101

When a crisis like the YouTube fiasco emerges, it's in the agency's best interest to manage the situation without ruffling too many feathers. They might acknowledge the problem, but the real skill lies in shifting focus away from their own missteps and toward the "bigger industry challenges" at play.

To sum it up, if we're serious about cleaning up the digital advertising space, we have to tackle these conflicts of interest head-on. Otherwise, we're all just complicit in a system that desperately needs an overhaul.

🚩 Agency: The Curious Case of Joint Business Plans

Now, don't get me wrong—I'm not saying JBPs are evil. But let's pause and think for a moment. The whole premise of a JBP is to foster a more profitable and efficient business relationship between an agency and a vendor. Sounds good on paper, right? But what happens when the rubber meets the road?

The main issue is this: a JBP might look harmless, maybe even beneficial, at the outset. But what are its real-world ramifications? Are the business objectives outlined in that JBP truly being realized in a way that aligns with the client's best interests?

This brings us to the million-dollar question: Can an agency genuinely operate in a neutral and unbiased manner when there are, at the very least, streamlined agreements with specific partners, or, even more concerning, possible financial kickbacks for the agency?

The concept of JBPs raises eyebrows from the standpoint of end clients. Let's face it, an agency with a vested interest in a particular vendor is like a referee with a favorite team—it's hard to believe calls will be made impartially.

So, if you're an end client, you may want to ask: Is my agency's allegiance to me, or to maximizing its own profitability through these JBPs? The answer to that question could shed light on one of the industry's most deeply ingrained conflicts of interest.

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Who's calling the shots? (Accountability in execution)

So, your media agency—or maybe your in-house team—is tasked with executing your meticulously crafted plans. But who's making the final calls, and what kind of accountability framework is in place for those decisions?

✅ / ❌Checks and Balances: Plan-by-Plan Approval

Do you have a system where campaigns are approved individually? If so, are your "buying guidelines" (yep, I'm going old school here) explicitly spelled out for each plan? Or are these guidelines more of an unwritten rule?

📄 Universal vs. Custom Guidelines

Are there universally applied rules in your organization, like avoiding "made for kids" content or not using outstream video players? Or is this something that's ironed out on a campaign-by-campaign basis?

If you're scratching your head trying to figure out who makes these decisions, or if you've never seen these guidelines laid bare, that's a red flag.

📜 Written policies: The First Line of Accountability

Every brand should have documented policies about where and how their ads appear. If there's a clearly outlined policy to avoid certain types of content or placements, that's the playbook everyone should be following during live campaigns.

If you notice a gap between what's written and what's executed, it's time to start holding people accountable. Immediate action is needed.

🤦🏻 What if Agencies Slip Up?

It's one thing if the agency did everything it could to adhere to the guidelines, only for a vendor to go rogue. In such cases, you'd expect the agency to hold the vendor accountable. Agencies are, after all, pretty good at raining down consequences when publishers step out of line.

But what happens if the agency is the one at fault? What if they set the wrong configurations or lacked the expertise to understand the nuances of what they were buying? Who keeps them in check?

👍🏻 Documentation and Approvals

To keep everyone on the same page and accountable, expectations must be documented, in writing, for all parties to see. Any departure from these guidelines should undergo a separate approval process, also clearly documented.

Knowing who holds the reins and having a transparent, documented system for accountability is not just best practice—it's essential for navigating the intricate landscape of digital advertising. Ignoring these aspects leaves room for the very conflicts of interest we're all keen to avoid.

🚩 Measurement: Mirage of Independence

Let's peak behind the curtain on the so-called "independent" third-party measurement solutions in digital media. Spoiler alert: Independent is a liberally used term to describe themselves.

Dual Loyalties: Buy-Side and Sell-Side

Ask yourself this: Is the measurement company in question accepting payments from both the buy-side (advertisers) and the sell-side (publishers)? If the answer is yes, their claim of independence is about as convincing as a fox guarding a henhouse.

It's tough to maintain impartiality when your revenue streams come from both sides of the transaction. It's like a sports referee being paid undisclosed amounts by each team—do you really trust that ref to make unbiased calls?

Many digital media measurement companies—encompassing ad servers, verification firms, and the like—are in what I'd affectionately call the "vig collection business." Their endgame? Skim a little off the top of every digital dollar that changes hands.

The Golden Number: 1%

At this point in the ad tech maturity cycle, most technology and infrastructure are essentially commodities. So what does that mean? Even a tiny 1% fee on transactions can equate to sky-high profit margins. Most measurement firms would be doing cartwheels if they could reliably extract that 1% from every digital dollar spent by their clients.

So what?

Given the commoditized nature of the technology and the dual loyalties many measurement companies hold, it's high time we scrutinize the authenticity of their "independent" claims. Because let's face it, when both sides of the equation are padding the vendor’s wallet, impartiality isn't just hard; it's virtually impossible.

Potential Conflicts in Measurement Vendor Relationships

Let's examine some potential red flags that could signal conflicts of interest with your measurement vendors.

🤝🤑 The Revenue Question: What’s gating the revenue?

Want to uncover a vendor's allegiances? Ask them what percentage of their revenue comes from “measuring” social media platforms and walled gardens like YouTube and Meta (formerly Facebook).

Why is revenue gating a potential conflict?

If you've been tuning into ADLINGO, you know that these measurement vendors are essentially on a leash when it comes to walled gardens. They don't have carte blanche to measure anything; they have to be granted permission to even get a glimpse behind the velvet rope.

In essence, these vendors are not measuring; they're being handed data through a carefully controlled feed, such as YouTube's Ads Data Hub. Let's call it what it is: reporting, not independent measurement.

The Slippery Slope of Revenue Dependencies

So why does it matter where their revenue is coming from? Imagine a scenario where only a single-digit percentage of a verification vendor's revenue comes from a platform like YouTube or Meta. In this case, they might feel more empowered to hold such platforms accountable—after all, there's less money at stake.

But let's say that percentage creeps up to 20% or higher. Suddenly, calling out your significant revenue source starts to look like financial suicide. Would you bite the hands that feed you a fifth of your income?

This is a very real issue. Take a look at IAS’ public financial reports. 18% of its $113.7 million revenue in Q2 2023 came from “measuring” social media campaigns. And it sounds like it is only going to go up.

One can assume that DoubleVerify’s ratio of gated revenue is not that dissimilar to IAS. According to DV’s financial reports, revenue generated from measuring social media grew 33% in Q2 2023.

💪🏻 Platform Power

Let's not forget, these tech giants like YouTube, Facebook, and TikTok have the ultimate trump card: they can sever the “measurement” relationship at the flick of a switch. Step out of line too far, and your "measurement" partnership could be toast by the next fiscal year, taking that all-important certified partner status along with it.

On a recent episode of the Marketecture podcast, IAS CEO Lisa Utzschneider commented on the recent YouTube Google Video Partners scandal published by Adalytics. She said:

Yeah, so with the GVP [Google Video Partners] news, we focused on the data and the facts. And we thought it was the right thing to do to publish the factual data of what we were seeing with the GVP coverage, and we did it. We did it on behalf of our marketers. We did. It was the right thing to do. And we received an overwhelmingly positive response from the marketers, just saying, Thank you, like you're being very factual. That's your role as an independent third party player. So that's my response to GVP.

Hear Utzschneider’s comments in response to a question at the 23:00 mark of the episode above.

To be clear, the “factual data” Utzschneider references is the data handed to IAS by YouTube via the Google Ads Data Hub.

So the fact is that IAS published the data that Google supplied them along with some details regarding an analysis of that same data. It is not a fact that IAS can validate the underlying YouTube data, its provenance, or its accuracy. Nor do they have a way of validating if YouTube detected a non-compliant impression and credited it back to the advertisers.

Utzschneider’s statement that IAS “focused on the data and facts” is perhaps technically true by the slimmest margin imaginable but leaves out the critical detail that they could only focus on the “data and facts” provided to them by the entity they are claiming to independently measure.

It is also fascinating when you take a closer look at Google’s own rebuttals. For example, in a July 13, 2023 blog post, Google highlights the fact that both IAS and DV arrived at the exact same viewability rate.

Independent third parties that specialize in reporting results around campaign effectiveness and safety have publicly contradicted this claim. DoubleVerify recently reported that 93% of GVP inventory is viewable and that 78% is audible, which is well above open web benchmarks. And IAS similarly noted that 93% of GVP inventory is viewable. Our own internal analysis similarly refutes this claim in the report.

Never in the history of digital media measurement have two firms arrived at the exact same results. There are always discrepancies. That is, of course, unless you are using the exact same source data set. 😳

Google’s word choice in describing these partners is also telling. They are referred to as “independent third parties that specialize in reporting results.” Reporting results…not measuring results. Not validating results. Not verifying results. Just reporting.

Scrutiny of revenue streams and dependencies isn't just a detail; it's a critical lens through which to gauge the reliability and integrity of your measurement vendors.

Because when it comes to conflicts of interest in digital advertising, knowledge isn't just power—it's a necessity for maintaining an industry teetering on the precipice of a credibility chasm.

🚩The Role and Reality of our Trade Organizations

When it comes to media trade bodies like the IAB, ANA, WFA, MRC, and 4A’s, we often view them as the navigators guiding us through the choppy waters of the industry. In reality, they're more like filters—taking in a myriad of issues from their members and churning out a narrow set of priorities that can take an eternity to address.

Motivations & Incentives

Take the IAB as an example. At first glance, it looks like a digital media trade body for everyone. Examine the membership names a little deeper, and you'll find it's mostly focused on the "sell side"—the publishers and platforms selling ads. So, if you've been scratching your head wondering why some bad habits never seem to go away in the industry, understanding who's driving the conversation at these trade organizations can offer some clarity.

🥊 The Tug of War: Standards vs. Profits

Sure, we owe a debt to the IAB for giving us industry standards and those endless acronyms we love to hate. But when we think about lingering issues like transparency, ad fraud, or 'made-for-advertising' sites, we have to wonder: Why haven't we solved these problems yet?

The MFA Money Machine

Let's focus on 'made-for-advertising' (MFA) sites for a moment. These are essentially digital cash cows for a variety of players, including:

  • DSPs: Demand Side Platforms, who sell the impressions.
  • SSPs: Sell Side Platforms, who bundle available ad slots from MFA sites.
  • Ad Servers: Who measure the clicks and impressions.
  • Verification Vendors: Who monitor viewability and brand safety but often turn a blind eye to MFA sites.
  • Data Brokers: Who offer "targeted" audiences on these sites for a fee.
  • Consultants: People like me, who educate marketers about the MFA pitfalls but still earn a living from the chaos.

The Multi-Billion Dollar Question

With so many parties benefiting financially from the MFA ecosystem, each with their representation in various trade bodies, is it any surprise these issues remain unresolved?

Trade organizations have their place, but they're not the magic bullet for industry reform. Understanding their motivations and the vested interests of their members is key to deciphering their actions—or lack thereof.

If we want genuine change in areas like transparency, ad fraud, or MFA sites, it's going to require more than committee meetings and incremental updates. It's going to require a collective will to put long-term integrity over short-term profits. And in an industry where billions are at stake, that's easier said than done.

The Illusion of Rigor

Specialist organizations like TAG (Trustworthy Accountability Group) project an aura of accountability and rigorous standards. These certifications are in areas such as fraud prevention, malware checks, and brand safety. The principle is fantastic in theory; in practice, however, it's a different story.

X maintains it’s Brand Safety Certified seal according to TAG’s website which houses a database of all certified participants.

The example of X (formerly known as Twitter) retaining a Brand Safety Certification from TAG, despite evident lapses in brand-safe content, lays bare a critical issue. It raises the question: why does a standards organization seemingly fail at enforcing its own standards?

🏷️ Rubber Stamp of Legitimacy?

Let's examine TAG's Brand Safety Certification. Despite public observations of wildly non-brand-safe content, certain platforms manage to retain this certification. This casts doubt on the efficacy of such certifications.

High standards are demanding; they require intensive review processes, periodic audits, and possibly even unannounced checks. These measures can deter potential applicants and shrink the pool of participating organizations, thereby reducing fees collected.

A complex and tough certification process might uphold the integrity of the standards but will also make it more challenging for the organization to grow and achieve a sort of "industry consensus."

Policing the Gatekeepers

The challenge intensifies when it comes to decertification. Most certification bodies are notoriously lax in revoking certifications.

Stripping a brand of its certification status can not only result in a reputational hit for the brand but may also expose the certifying organization to legal risks. The fear of litigation, thus, often makes these organizations risk-averse when it comes to revoking certifications, leading to a situation where almost everyone gets a pass, regardless of compliance levels.

At this moment, I cannot recall a case of a publisher losing its TAG certifications for lack of compliance or reduced standards. I’ve also never heard of an already certified partner finding themselves under investigation. That is until recently.

Nandini Jammi, co-founder of the watchdog group Check My Ads has been publically flogging TAG CEO Mike Zaneis for months.

It appears that her team’s efforts made an impact as X’s certification status is being reviewed, despite being recertified back in March.

The Digiday article points out that the last remaining member of the “brand safety team” allegedly left the company a few weeks ago, leaving literally no one to manage the TAG certification program or the apparent investigation that has been launched.

🚩 The 🐘 in the Room: Marketers' Own Conflicts

Think the spotlight on conflicts of interest should only shine on agencies, vendors, and trade bodies? Think again. Marketers and brands are far from innocent bystanders; in many cases, they're the architects of the industry mess we're knee-deep in.

The Ostrich Effect: Heads in the Sand

Let's face it, nobody wants to admit their strategy might be flawed—that their 'baby' might actually be more 'Chucky' than cherub. Marketers are often “unreceptive” to scrutinizing their campaigns too closely. Why? Because scrutiny brings accountability, and accountability opens up a Pandora's Box of uncomfortable questions.

Every marketer says they want to avoid ad fraud and bots. Of course! Who wants to flush money down the digital toilet? But here's the kicker: if they measure and find out they've been doing exactly that—spending say, 8% on bots, another 15% on 'made-for-advertising' sites, and a further 9% on non-brand-safe content—someone will have to answer for it.

The "See No Evil 🙈, Hear No Evil 🙉" Approach

Here's the brutally honest truth: some marketers and even their legal teams have confided in me that they'd "rather not know" about these missteps. The moment they acknowledge an issue—like accidentally targeting kids or appearing on hate speech platforms—they're compelled to do something about it. And action could mean pulling the plug, which no one wants to be responsible for.

Here's where it gets dicey. Suppose a brand's legal team gets wind that their ads unintentionally targeted children. Even if it's an honest mistake, they'd have no choice but to yank those campaigns, which could mean retreating from an entire platform or market. Nobody wants that black mark on their record.

So, marketers, it's time for some soul-searching. If you're not willing to face the hard truths about your campaigns, you're part of the problem. Skirting around issues to preserve your credibility only amplifies the industry's issues.

If we want real change—transparency, accountability, ethical conduct—it's time to look in the mirror. Because until we're willing to own our part in this tangled web, we'll all remain stuck in this cycle of conflicts, finger-pointing, and missed opportunities for genuine improvement.

Travis Lusk Twitter

Opinionated digital advertising practitioner, consultant for Fortune 100 Brands, and writer at ADLINGO.org.