Andrew Ingalls of Day Pitney. Courtesy photo
As we move forward in the information age, digital advertising continues to surge in value with digital ad spending expected to exceed $571 billion in 2022 alone. But this significant increase in ad spending has also resulted in an increase of digital ad fraud, which is expected to exceed $80 billion in 2022. Accordingly, well over 10% of all digital advertising inventory purchased by brands this year will never be seen by a consumer. Given the way in which the programmatic advertising marketplace operates, identifying the perpetrator of ad fraud can be extremely difficult, and establishing that a vendor was aware they were selling fake ad space nearly impossible. When digital ad fraud results in litigation, it is essential to understand not only how this multifaceted marketplace functions, but also how to identify digital ad fraud and establish culpability.
How the Programmatic Advertising Marketplace Works
While one might think that placing an ad would be as simple as purchasing ad space directly from the publisher, the reality is far more complicated. The programmatic advertising marketplace generally works as follows. A brand looking to place an ad will submit its request and details of the ad campaign to its ad agency. The ad agency or “advertiser” then utilizes software called a demand-side platform or “DSP” that allows the ad advertiser to set the parameters of the ad campaign, including the budget, the type of ad space to be purchased, and the medium (e.g., desktop, mobile, apps, or connected TV (CTV)). The DSPs then, using the targeting parameters selected by the agencies, connect to digital ad exchange platforms to match with publishers providing available ad inventory. Like the ad agencies’ use of DSPs, ad publishers use their own supply-side platform or “SSP” to manage their advertising inventory and connect with online ad exchange platforms. A simplified version of this publisher-to-brand ad chain is illustrated below.
How the Programmatic Advertising Marketplace Works. Advertisers use the ad exchange platform to bid on ad space. Courtesy graphic
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
