Online ad fraud is a growing problem, and even huge platform companies like Google (NASDAQ: GOOGL) and Verizon (NYSE: VZ)'s Oath are not immune.
Google-run tests found fraudulent companies selling ad space on premium websites they did not have access to, or on fake versions of real websites, as first reported by Business Insider. The fraudulent ad space was sold through programmatic ad exchanges — automated ad sales platforms — including Google's AdX, AppNexus, Oath's Brightroll, and PubMatic. (Oath is the new umbrella brand for more than 50 media and technology brands previously owned by AOL and Yahoo.)
"Some of our publisher partners have asked us for help with understanding how their brand is impacted by counterfeit inventory and the scope of the issue across the ads ecosystem," a Google spokesperson told CNBC in a statement. "These tests have confirmed how widespread of an issue this is for publishers."
Ad fraud will cost companies around the globe $16.4 billion this year , according to ad verification company Adloox. There are a variety of ways it can occur, including fake "bot" traffic to websites meant to mimic human activity or ads so tiny that they can't be seen by the human eye.
How to combat "spoofing"
The type of ad fraud Google's test was looking at is called "spoofing."
The method is used to trick ad buyers into purchasing advertising space on websites that don't exist, or that the sellers don't have access to. Because of the speed and volume of advertising online when bought programmatically, it's virtually impossible to check if an ad ran where sellers say it was supposed to run.
Google, AppNexus, Oath and PubMatic say they are actively working to fight ad fraud. One of the main initiatives they're involved in is called ads.txt, which directly fights spoofing.
Ads.txt, which is led by the Interactive Advertising Bureau (IAB) Tech Lab, is a text file where publishers list approved ad sellers. Companies can then use it to create programs to make sure they don't buy unauthorized ad space.
Spoofing and unauthorized selling is "pervasive," and ads.text can help, IAB Tech Lab general manager Alanna Gombert explained. But it must be an industry-wide effort to help defeat ad fraud, she said.
"Everyone has an equal part in cleaning the fraud," Gombert said. "The publishers have to be aware where their inventory is showing up, or their 'fake inventory.' The buyers can't take deals. If it's too good to be true, it probably is."