How Roku plans to battle connected TV ad fraud

Roku has developed a new anti-fraud technology for connected TV advertisers as the whole industry looks for safeguards to prevent scammers from stealing ad dollars by “spoofing” devices that mimic viewers.

On Tuesday, Roku announced a new digital “watermark” it would embed in connected TV ads to authenticate ad impressions. The watermark — computer code appended to an ad request — matches up with a key that only participants in Roku’s ad platform can access. The watermark ensures the ad is served to a Roku subscriber’s device.

The watermark “integrates with the Roku operating system to automatically verify publisher ad requests and impressions so that advertisers know they are reaching genuine Roku users,” Roku stated in its announcement on Wednesday.

“We built it to primarily combat device spoofing,” said Adam Markey, Roku’s director of ad platform product management, in an interview with Ad Age.

Device spoofing is one of the most common instances of connected TV fraud, and it’s mostly a problem in programmatic advertising, which is when ads are sold in real-time auctions. Ad tech vendors have been sounding the alarm bells in recent years over schemes in which fraudsters set up fake ad servers that act like they are delivering ads to connected TVs; instead, they are just collecting ad revenue for commercials that never stream to devices.

Battling programmatic ad fraud

About 25% of connected TV ad inventory is sold programmatically, Ad Age reported last year. Double Verify, an ad technology vendor, said that connected TVs generated $ 17 billion in total ad revenue last year. DoubleVerify also said that 18% of programmatic connected TV ad inventory was fraudulent. If ads are not sold programmatically, they are sold directly by the publisher, which makes it easier to ensure the ads are served to live viewers. Roku has not reported on how much fraudulent traffic it detects in connected TV platforms.

Earlier this month, another type of fraud made headlines — ad impressions were being served to TVs even when the screen was off. The watermark is not designed to combat this type of fraud, but Roku, and other connected TV providers, deploy other methods to identify TV viewing patterns to cut down on the potential for ads to reach blank screens.

Discovery and Fox are among the publishers working with Roku to deploy its anti-fraud watermark. Google, Basis Technologies, Human, Innovid and Magnite are among the ad tech providers implementing the watermark, Roku said. Roku’s OneView ad-buying platform uses the watermark as well.

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