Advertisers wasted an estimated $716 million on low-quality, ad-stuffed websites in the second quarter, according to a new report from ad analytics platform Pixalate. These "Made-for-Advertising" (MFA) sites, which are engineered to maximize ad views over content quality, soaked up 10% of all global open programmatic ad spend.
A growing scourge: The problem appears to be escalating, with the share of websites flagged as MFA growing from 4% to 6% during the second quarter. Latin America is hit particularly hard, with 21% of the region's programmatic ad dollars flowing to these low-quality domains.
Not fraud, but a shell game: While you might expect these sites to be rife with bots, their invalid traffic rates were no higher than on non-MFA sites. The real problem is a profound lack of transparency, as 88% of the money spent on MFA websites flows to domains that don't disclose their country of registry.
Spreading across screens: The MFA scourge isn't just on websites; it siphoned off an additional $29 million from mobile apps and $25 million from CTV apps. On mobile, gaming apps are the main culprits, while on CTV, a massive 99% of the money goes to developers with private or blank domains, effectively hiding who gets paid.
The report shows that even without traditional bot fraud, the programmatic ecosystem is leaking millions to opaque, low-value properties, putting the onus on advertisers to track their spending with greater vigilance.
The wider view: The lack of transparency highlighted in the report is a recurring theme in the ad tech world. Other recent findings show how unauthorized sellers misrepresent themselves in the programmatic supply chain. Beyond MFA, advertisers also have to contend with issues like persistent click fraud and the use of malformed or fraudulent app IDs in the CTV space, further complicating the ad-buying process.
