• by Joe Mandese  @mp_joemandese, May 19, 2016

The vast majority of the biggest national advertisers either are only vaguely familiar with or are completely ignorant about the role so-called “sourced traffic” is playing in their digital media buys, according to findings of a member study being released this morning by the Association of National Advertisers.

The ANA, which has been issuing warnings and updates on the practice, which involves publishers acquiring audiences from other third parties and representing it as their own to fulfill commitments to advertisers, because it frequently is a source of fraudulent or non-human traffic generated by bots and other insidious an unsavory practices.

“Our study shows that sourced traffic is not understood sufficiently by marketers,” ANA President-CEO Bob Liodice warned in a statement released this morning as part of the report, entitled, “Sourced Traffic: Buyer Beware!”

“Sourced traffic needs to be monitored carefully and marketers must be increasingly diligent about their digital media buys,” he continued, adding that it is the job of media agencies to “educate clients, safeguard client investments, and challenge media companies to be much more transparent.”

The study found that nearly two-thirds of major advertisers were “only slightly familiar with -- or completely unaware of -- the concept of sourced traffic in the digital advertising ecosystem.”

Asked whether their digital media buys included any sourced traffic, 54% said they were either unsure or did not know. The ANA said the balance was split between “yes” and “no” respondents.

The report defined sourced traffic as “any method by which digital media sellers acquire visitors through third parties,” which technically could cover a wide variety of nuanced business practices, especially so-called “audience extension” models utilized by a variety of big publishers, some of whom utilize programmatic exchanges to acquire “lookalike” audiences to fill in for under-delivering on their own audience guarantees.

“With sourced traffic, a publisher pays a third-party vendor to send users to its site by advertising on other publishers’ sites,” the ANA explained, adding: “Sourced traffic may occur when a seller needs to meet the audience delivery requirements of a campaign and has to increase visitors to its site.”

The ANA did not provide any examples of good or bad practices, but characterized sourcing traffic as a “fairly common practice in the ad industry,” and said it can affect any type of ad buy, including display, video, native, mobile, “premium,” direct, via networks and exchanges, programmatic and non-programmatic.

The concept of audience fraud is not new to the ad industry and predates digital with some famous examples of program exchanges, “time banks,” and syndication models that billed advertisers for audiences even though they never ran. While these fraudulent media buys are often attributed to “independent” agencies, unaffiliated with major agencies and advertisers, one of the most famous was a 1980s scandal in J. Walter Thompson’s syndication department that fraudulently charged its clients for $40 million worth of TV syndication buys that never actually ran.

Then, as now, it was up to agencies to steward the buys they made for their clients -- but as the title of the ANA report also suggests, it’s up to clients to also be aware, especially as digital markets create nuanced models for aggregating audience delivery.

The concept of aggregating audiences from disparate sources also is not new. “Ad networks” have been around in TV, radio and other media nearly as long as those media existed, and ot a large extent, the digital marketplace is just replicating the concept of audience aggregation.

What is new is the opportunity for technology -- and the misuse of data associated with it -- to intentionally perpetuate fraud by using machines to simulate human audience activity.

The ANA report, in fact, warns about this explicitly, noting: “Of primary concern is that sourced traffic is not transparent to advertisers who are unfamiliar with the practice or unaware that they are even participating in it. Audiences delivered via sourced traffic may be less valuable than audiences delivered via a publisher’s organic traffic, or even completely outside the target audience of the media plan. That’s because sourced audiences do not have the same interest level in a publisher’s site as that publisher’s organic traffic.

“Another major concern is that sourced traffic results in an alarmingly high level of digital ad fraud in the form of non-human traffic.”

In a report released last year by the ANA and non-human traffic detector White Ops, dubbed the “Bot Baseline Report,” it was estimated that digital ad buys made from publishers who sourced traffic from third parties “had 52% fraud.”

“To put that in perspective, fraud in display advertising overall was 11%,” that report continued, “so sourced traffic display inventory was almost five times higher! Importantly, well-known publishers and premium publishers were not immune to high bot levels in sourced traffic.”