Between bots, click fraud and malware issues, programmatic marketing has been hit hard by fraudsters intent on taking an illegal share of this billion pound global industry.
Economically, online fraud is more than twice as damaging as traditional counterfeit goods, which, according to eMarketer, are a £15 billion business, compared with the £38 billion a year of digital ad spend subject to fraud.
So you might think it counterintuitive to say that something as detrimental as ad fraud could have any positive significance in this new digital world. But at DataXu, we see fraud as a thermometer that is giving us some vital information about the health of the industry.
And we are registering a healthy temperature – no fever.
Why? Because it's a sign of a flourishing industry, as you can be sure that criminals only go where they know they can make big money, fast.
Looking at the facts, it's not that hard to see why. According to a study by the Digital Citizens Alliance, digital ad fraud offers a staggering ROI of 94% for those behind it (compare this with an average 11% return for investing in the stock market).
I can hear what you're thinking – if only any form of marketing offered such a high return.
Programmatic marketing is more than just a buzzword. It has a much bigger business impact because it delivers on the ultimate marketing goal, delivering the right message to the right person on the right device at the right time.
In the UK alone, the Standard Media Index predicts a 61% rise in programmatic spend this year.
While it makes sense that fraudsters are attracted to an industry as lucrative as programmatic, we certainly aren’t putting our feet up and letting them get away with it.
Fraud might not be unique to the online ad industry, but as it's still a relatively new industry compared to others, it faces the challenge of coming across as darker, more intangible and therefore insurmountable.
There are some who say that ad fraud is a good reason for advertisers to remove themselves from programmatic – but that's like a large global bank saying it will shut down its online banking service because phishing emails exist.
Fraud isn't a sign that a system isn't working. The banks have had to overcome security issues, yet no one would suggest that it's online banking itself that's flawed.
It means that the companies behind innovative digital initiatives need to work harder to make sure that new technologies are as safe and reliable as they are lucrative.
The online ad industry needs to set itself apart by showing other industries how it is upping the ante on tackling fraud.
While luxury brands have been reluctant to speak openly about what they are doing to dissociate themselves from fraudsters, and prefer the government or industry bodies to be the voice of the issue, we need to be at the centre of it.
We need to be leading the way in opening up the debate, encouraging brands and media owners to have their say, and ultimately, to eradicate this issue.
We want all those affected by programmatic fraud, brands and media owners alike, to collaborate with independent third parties to ensure they are being truly effective about combating fraud – as well as being transparent.
In the US, the IAB has already taken great steps with its new task force, the Anti-Fraud Working Group, formed of representatives from leading tech companies, including DataXu.
We aren't afraid to be partnering with our competitors on something this important. Such industry-wide measures are crucial to ensure that we are coming together as an industry and pooling our collective thinking and resource to combat fraud.
The group has developed key Anti-Fraud Principles around the steps programmatic companies should take to ensure they are identifying and preventing ad bots and illegitimate traffic sources – identifying legitimate inventory clearly to buyers while being transparent throughout.
It's just a matter of time until a similar task force is launched over here, and until the UK acts, one thing you can do is look to your buy-side partners for guarantees.
With a fraud-free guarantee in place, you'll know that your marketing investments are being spent on real people.
Chris Le May is UK director at DataXu