Pareto and Octobot May Lead To World War III?

Los Angeles, CA May 24, 2021

In today's social media fueled, pandemic laden reality, we have some new actors you should be aware of. DiCaprio, Pareto, Multiterra and Octobot are not TikTok actors fueling some new dance or cooking craze nor are they the new stars of some brilliant screenplay. Pareto and Octobot are the latest in fraud schemes plaguing the CTV/OTT marketplace.

It seems every month the industry uncovers another group of schemes, but before they do, the cost to the industry is massive. The cost comes not only in defrauded buyers, but also in the way of significant incremental costs for ad-fraud detection tech.

Many talk about the streaming wars in the context of CTV, but they refer to the battle for eyeballs and impressions. This is a new war and the cost is massive. Billons of dollars and the health of TV and Media are at stake.

Ad-fraud and the impact of it should not be chalked up as a cost of doing business. Unfortunately, however, many ad-agencies and holding companies now write the cost of fraud off as a cost of doing business. Yep they say $.20 - $.30 of fraud in every dollar is ok so long as they plan for it in the budget.

Would an agency or brand ever accept it if someone stole a corporate card # every time an employee made a purchase and just chalk that up as acceptable? Even worse, would one be ok if every time they made a purchase with a credit card that they had to pay someone not to steal the credit card # used for the purchase?

HELL NO! There is no chance in hell anyone in there right mind would accept this. Then why do we feel it is ok to have fraud as a cost of doing business or paying for fraud tech an acceptable alternative?

One thing our industry is great at doing is building multi-billion dollar companies that are merely bandaids on gaping wounds, versus actually healing the wound.

Ad fraud schemes are only going to become more prevalent as spend in CTV soar and more viewers find their way to AVOD (ad-supported streaming) solutions. Both Pareto and Octobot are massive new blows to the security of the marketplace. Octobot is the scarier of the two, since it belongs to a family of fraud schemes.

Octobot have generated billions of ad calls, spoofed thousands of apps and millions of CTV devices, and despite rapid identification and shutdown, resulted in many millions in misdirected ad spend since November 2019.

“In short, the PARETO botnet is nearly a million infected Android devices pretending to be millions of people watching ads on smart TVs and other devices, causing invalid traffic on streaming platforms. PARETO-associated traffic accounted for an average of 650 million daily bid requests"

Pareto plagued 29 Android apps spoofing more than 6,000 CTV apps. Several of the Android apps were available only through third-party marketplaces. PARETO exploited many organizations and components in the advertising technology ecosystem; references to them in the research from Human and Pixalate do not imply complicity in the operation.

It is time that buyers stand-up and demand more. CTV buyers, especially those in the local and mid-market must begin demanding the ability to buy all ad-supported inventory in one transparent platform to manage fraud, frequency and reach. They need to stop buying from resellers whom by their very nature are too many steps removed from the real problem and therefore have no real ability to help the marketer when an issue occurs and they need to stop paying for fraud tech as an "add-on".

Octillion has made a business of working with two MRC accredited pre-bid fraud solutions and have built some of our own tech using tools like cryptography and other tech on top of them. We do not charge our buyers to have a fraud-free environment - nobody should. Buying in a fraud-free, brand-safe environment across any publisher should be table stakes, not some premium ad-on as many would lead you to believe.

My plea to the marketplace is that we work together to clean up the industry. Together we can do it! We must begin by eliminating the middle-man and the unnecessary tech vendors one be one. I hope you will join Octillion in our mission to deliver a stronger and far better marketplace for all!