The world of digital ads is reeling after a bombshell report that found Google’s video advertising system may be defrauding customers 80% of the time, violating the promises the company makes to advertisers about where and how those ads are shown. Some advertisers are demanding refunds, which, theoretically, would cost Google millions if not billions of dollars. But with Google denying the report’s findings, advertisers likely have no method for recourse — unless the government gets involved.
The report, conducted by research firm Adalytics, examined a program called Google Video Partners. When people buy video ads from Google, the vast majority get played on YouTube. However, Google allows advertisers to expand their reach by playing the ads on other parts of the internet, through Google’s relationship with countless websites and publishers.
Google makes a number of guarantees to its video ad customers. Among other promises, Google says video ads will only play on high-quality sites, and those ads will play with the sound on in specific, prominent locations.
Based on data collected by Adalytics, it seems that isn’t happening in most cases. According to the report, Google violates those guarantees 80% of the time. Adalytics gathered information on ad campaigns from 1,100 brands that ran between 2020 and 2023. Together, those ads amounted to billions of impressions across the web.
The results found ads playing on a large number of low-quality websites that don’t meet Google’s standards. The ads often played with the sound off and appeared “outstream,” the type of ads that appear on the sides of pages and play automatically as you scroll by — ads that are much easier to ignore. Google promises that video ads will appear “instream,” meaning before other videos that users are trying to watch.
A Google spokesperson pointed to a blog post addressing the allegations. In short, Google said the report “used unreliable sampling and proxy methodologies and made extremely inaccurate claims about the Google Video Partner (GVP) network.”
Google said advertisers can choose whether or not the ads will appear exclusively on YouTube, or whether they can also run on the GVP network. The company said it uses third-party organisations to verify publishers follow Google’s standards. “In addition to the high bar we set on YouTube, we have strict policies that all third-party publishers, including Google Video Partners, must follow,” Google’s blog post said. “To give you a sense of how serious we are about this, in 2022 we stopped serving ads on more than 143,000 sites for violating our policies.”
Krzysztof Franaszek, founder of Adalytics, stands by the conclusions in the report. “Google’s rebuttal sidesteps most of the core issues we found,” Franaszek said.
For example, Google’s blog post argues that 90% of the ads it shows are “viewable,” meaning users see them, and advertisers don’t have to pay for ads that aren’t viewable. However, that’s an issue that isn’t even mentioned in the report, and it says nothing about ads playing in the outstream or with the sound off.
Google’s claim that the publishers it partners with are vetted and made to abide by strict policy guidelines stands in stark contrast to the report’s conclusions. To name just a few examples, the research documented ads running on Russian disinformation sites, as well as Android apps that are delisted or not allowed in Google’s own app store. Adalytics found Google serving ads with publishers based in countries that are sanctioned by the US Treasury Department, such as Iran. In other words, advertisers may be inadvertently funding entities sanctioned by the Government. The fact that Google had to pull ads from 143,000 sites for policy violations, by its own admission, is a sign that Google’s system isn’t catching problems before they happen.
Google also stresses that its vetting process weeds out so-called “made for advertising” (MFA) websites, the latest boogeyman in the ad tech world. As the name suggests, MFA sites are built to siphon money from the online ad business through sites filled with as many ads as possible, using a number of elaborate schemes and clickbait or AI-generated content that attracts a disinterested audience. The advertising industry essentially considers ads that go to MFA sites as wasted money. A recent report from the Association of National Advertisers found that as much as 21% of ad impressions come from MFA publishers.
DeepSee.io, an ad tech fraud detection company, has found similar problems to those uncovered by the Adalytics report, and questions Google’s claims. “Despite Google’s declared prohibition of Made for Advertising (MFA) content, our findings suggest a lack of rigorous enforcement,” Antonio Torres, CTO at DeepSee.io, said. “This suggests a disconnect between policy and practice that warrants further scrutiny.
Adalytics found a number of big-name advertisers affected by these problems, including American Express, Disney+, Johnson and Johnson, the US Army, and the Centres for Medicare & Medicaid Services (CMS), the federal agency that operates Medicare. American Express, Disney+, and Johnson and Johnson did not immediately respond to requests for comment. The Army has not provided a comment as of press time. CMS declined to comment.
“Google isn’t just defrauding customers, this scheme is funelling money into peddlers of misinformation and inauthentic astroturfing campaigns that are actively making our communities less safe,” Claire Atkin, CEO of the Check My Ads Institute, and ad tech watchdog. “We have seen time and again that Google cannot be taken seriously when it comes to these issues. The only reason they can get away with this level of business malpractice is because they are a monopoly.”
A number of big-name players in the ad business are calling on Google to address the problems by giving advertisers their money back. That includes Joshua Lowcock, global chief media officer at ad agency UM Worldwide, who told the Wall Street Journal, “Google must fix this and fully refund clients for any fraud and impressions that failed to meet Google’s own policies.” Lowcock declined to comment for this story.
However, it doesn’t seem likely that advertisers will get restitution. An untold amount of money is at stake if Adalytics’ numbers are anywhere near correct, and so far Google isn’t admitting wrongdoing. Online advertising is notoriously opaque, and advertisers face an uphill battle if they want to prove Google is mishandling their campaigns.
“The likelihood that Google will face the consequences of this in a way that would be just is unlikely, unless this report can be used for further antitrust legislation,” Atkin said.
When it comes to questions about monopolies, the report couldn’t come at a worse time. Google’s advertising business is facing three major antitrust investigations, one from the US Department of Justice, another from a coalition of states, and a third in the EU. Google’s ability to run the world’s most dominant online ad business while allegedly defrauding customers on a mass scale could be evidence to fuel the legal battles. The Department of Justice and the European Commission did not immediately respond to a request for comment.
Still, if antitrust investigations lead to anything it’s government fines or forced breakups, not returning money to spurned customers. Much like the ads in question, advertisers’ calls for justice may go unaddressed.