By now, ad buyers have become sorely aware of the impact of ad fraud.

A study for the ANA last year pegged the problem at $5.8 billion globally.

But, even though that is declining on previous years, ad fraud has primarily been seen as a problem in the display and online video arenas.

When it comes to connected TV, many people have considered the channel fraud-free.

But John Ross says that isn’t the case. In this video interview with Beet.TV, the associate director of connected TV products at DoubleVerify, an ad fraud-fighting software maker, explains how it works and what the scale of the problem is.

‘Huge swelling’

“In 2018, budgets weren’t huge in the CTV space, and the associated fraud was still pretty low,” Ross says.

“But we saw the fraud started in early 2019. Then, by Q4 of 2019, fraud really started to explode.

“This has really continued into 2020. We’ve detected something like 161% increase in fraudulent impressions just from January to April of this year versus last year.

“So it’s this huge swelling of fraud. Basically, the bad actors have figured out what to do. They see the budgets, and so they are acting.”

So, how exactly does ad fraud happen when it comes to connected TV? Ross lays out three methods, each of which also has origins in display ad fraud.

1. Fraudulent apps

Ross says miscreants are easily writing downloadable apps designed to play old-school TV content. The idea, he says, is to get the apps accepted by store-owners.

“But they essentially don’t have viewers because it’s such old content and they just layer in this these fraudulent impressions into their apps,” he says.

“These kind of fraudulent apps are a huge thing. DV detected over 500 in Q1 alone, and we’re at something like 1,300 at this point for just CTV.”

2. Cloud server farms

One ad fraud tactic used in other channels is server farms, networks that harness desktop and mobile client devices invoking ad calls. Ross says the same is happening in connected TV – with a twist.

“In the connected TV realm, most of the ad calls are done server based; they’re done in the cloud,” he says.

Whilst cloud-based technology makes for a more seamless viewing experience, with less ad buffering, for example, Ross says it also makes things “easier for the fraudsters to manipulate”.

“They can just essentially purchase server rack space somewhere, fire off tons of fraudulent calls, and they basically pass it off as a server-side ad insertion technology,” he explains.

3. Spoofing

In ad spoofing, fraudsters desktop and mobile ad inventory but then change ad calls and re-sell it as connected TV inventory. That’s a problem because TV inventory commands a higher premium.

“This is probably the most advanced type of fraud that we see. The advertisers buy this CTV video inventory. They think their video ad ran, but what we in DV and others in our industry are able to detect is that this isn’t an actual video ad. It’s a display ad, nothing at all related to what they bought.”

Future of fraud

The increasing appeal of connected TV to programmers and advertisers is also making it a honey pot for ad fraudsters.

In the next couple of years, we are likely to see growing calls to eradicate the practices, just as we have seen in traditional display and online video.

Those calls appear to have helped reduce, but not eliminate, ad fraud in those channels

For now, however, it seems connected TV fraud may be on an upswing.