Amongst a litany of crimes against digital ad effectiveness and transparency, one of the most-accused fraudulent tactics is fraudulent inventory.

Weaknesses in links in the ad-tech chain allow rogue ad sellers to present their sites as though they were those of peers with premium inventory. It is called “domain spoofing”, and it bugs the heck out of media agencies.

So Hearts & Science CEO Scott Hagedorn decided to do something about it.

Together with Megan Pagliuca, the former boss of Omnicom-owned Accuen, who joined his agency in September, Hagedorn began poking around in the ad supply chain to understand the fraud problem more deeply.

“We spent probably the last half of 2017 looking at unauthorized sellers that were entering into the mix, or spoof domains that were selling like they were CBS when they really weren’t CBS at all, they were another site completely,” he in this video interview with Beet.TV.

“Typically, those three things (DSPs, the SSPs, and the publishers) would bundle together and there would be hidden margin from somebody in that, or some unauthorized inventory. We, instead, did a lot of clean-up, and it’s a lot of work for us, but we cleaned up, I’d say, the supply chain on the publisher side.”

In January, News Corp’s UK newspaper division News UK cried fowl on domain spoofing when it published conclusions of its own experiment that revealed 2.9 million bids per hour were made on fake inventory purporting to be that of its own The Sun and The Times news sites – in just two hours on December 4.

It concluded ad buyers are being duped in to wasting up to £700,000 ($972,000) per month on misplaced advertising, saying: “Brands are being tricked into thinking they’re buying quality inventory, bidding on what they think is a premium site when it isn’t.”

But fraudulent tactics look like a game of Whack-a-mole.

No sooner had Hearts & Science’s Hagedorn cleaned up the domain spoofing problem, by working with White Ops, a company that exists to root out such tactics, he discovered a new threat practiced by fraudsters.

“They quickly migrated into building bot extensions that live within a lot of the browsers that spoof human activity,” he tells Beet.TV.

“The crazy thing about that is you can cookie, essentially, a bot, and then the bot potentially gets retargeted by ambient retargeting campaigns later. So now we’re starting to really study identity management, and identity resolution, and how we can stop potentially advertising to bots that are spoofing being humans.”

This video was produced at the 4A’s Data Summit in New York.   Please find other videos produced at the conference here.

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