18 per cent of OTT inventory is fraudulent, according to figures from TV advertising solutions company MadHive, based on an analysis of more than 1bn OTT ad requests. The report found that the predominant types of fraud mirror the methods currently plaguing the rest of the digital ecosystem. These are misrepresentation, where a fraudulent arbitrager is selling ads they claim are being shown to users in the US, but where the ad is actually shown to a device in non-US countries. Secondly, device-based, where a single device reports a very high number of ads during a given time period, for example 50 ads per minute. And thirdly, app-based, where the same ad-supported OTT app shows a very high rate of activity around the clock.

The findings form part of a whitepaper on fraud in the OTT ecosystem published by AdLedger, the non-profit research and development consortium building and implementing the blockchain and cryptography standards for digital media. In addition to MadHive, the report also features insights from Reprise/IPG Mediabrands, Hearst Television, The Hershey Company and Beachfront Media.

“OTT is booming, offering advertisers the opportunity to apply data-driven planning, targeting and measurement methodologies from the digital ecosystem to television,” said AdLedger executive director, Christiana Cacciapuoti. “But there is a misconception that OTT is universally fraud free, when in fact it is vulnerable to many of the same schemes as digital.”

In an effort to combat fraud, AdLedger is executing proof-of-concept projects with members such as Omnicom, MadHive and Salon Media, that leverage blockchain and cryptography to establish airtight verification and validation of KPIs. This announcement comes on the heels of WPP’s GroupM, Publicis Media, Omnicom Media Group and IPG Reprise Digital joining forces to form the AdLedger Blockchain Education Working Group. The AdLedger consortium also includes Inscape, Viacom, Hearst Television, Liberty Global, and iSpotTV.

“OTT is going to play an integral role in the future of the marketing mix, especially as interactive ad formats roll-out on the platform and enable brands to take a DTC approach to media buying,” said Vinny Rinaldi, head of addressable media and technology for The Hershey Company. “We just need to work together as an industry to proactively fight fraudsters, while providing transparency across the supply chain.”

AdLedger was founded by MadHive, TEGNA and IBM to establish standards around integrating blockchain and cryptography into the digital advertising ecosystem.