Nearly 100% of Programmatic Media Below Floor Pricing is Fraudulent
Few media planners think about floor pricing when establishing their programmatic media buys. And why should they? Historically floor pricing has been a consideration only of the publishers who use a floor price to establish the minimum bid they would accept from demand side partners. We believe there might be a need to revisit floor pricing from the Advertisers perspective.
Recent observations captured from the Advangelists’ AdCop™ beta program exposed a concerning trend of near 100% fraud in instances of bids placed below publisher’s floor price.
Similar to a reserve bid price on eBay or other auction environments, all advertiser bids below the floor are rejected and the impression should remain unsold. It was curious that we were even able to acquire impressions below the floor price which lead us to investigate the nature of these impressions. We immediately observed a near 100% fraud rate, of spoofed publishers.
Two elements at play:
- Publishers don’t typically diverge their reserve bid floor prices for fear of driving costs down and commoditizing their available impressions.
- Media planners will inevitably seek to get the lowest price possible, programming Demand Side technologies with no understanding of fraud and no knowledge of the floor prices to continue bidding on basement inventory as their algorithms are trained to acquire lowest cost possible ad impressions.
Damaging Publisher Reputations
In many instances, a media planner becomes accepting of some level of fraud if it means demonstrating lower cost media buys for their clients. But this can have a damaging effect on publisher reputations.
The planner’s crusade to save money for their brands is directly at odds with publishers who are fighting to keep their reputations intact. Many low bidding advertisers with third party fraud detection software will rush to blacklist premium publishers and supply partners based on the detection of even moderate levels of fraud. This leaves the supply side fighting to protect their reputation while simultaneously maintaining a hidden floor price to capture the highest yield for their ad inventory.”
We believe that if a media planner better understood the floor pricing demands of publishers, the industry could eliminate a significant amount of fraud from the open exchanges, without the need for blockchains, p-chains, or expensive third party solutions. DSP’s and SSP’s should work together to share bid guidance; informing each other of floor pricing to eliminate a large swatch of fraud that is prevalent in the system.