WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), Vice Chairman of the Senate Select Committee on Intelligence and a member of the Senate Banking Committee, wrote to Federal Trade Commission (FTC) Chairman Andrew Ferguson and to Attorney General Pam Bondi expressing concern over continued prevalence of fraud in the digital advertising industry, highlighting how this fraud hurts U.S. Government (USG) customers, and therefore, American taxpayers.

“The failures and misrepresentations of these verification vendors amount to far more than simple contradictions of their marketing puffery,” wrote Sen. Warner. “As publishers and advertisers rely on these services’ asserted ability to avoid bot traffic and deliver content to customers, these verification firms serve as cover for the systemic failure by key ecosystem stakeholders, potentially compromising a significant sector of the online ad market.”

The phenomenon of digital fraud has skyrocketed in recent years, with reports indicating that as of 2023, digital fraud has grown to $84 billion, up from $7.4 billion in 2017.

He continued, “Failure to meet the terms of contracts result in the misuse of taxpayer dollars, and undermine the efficacy of government public awareness and job recruitment campaigns. These failures drive inflated ad costs and reduced effectiveness for thousands of small and midsize businesses and charities that rely on digital advertising to succeed, and these increased costs trickle down to consumers who end up paying more for basic goods and services.”

In his letter to the FTC, Sen. Warner requested the commission investigate this wide-spread fraud:

1. Did verification vendors such as Integral Ad Science (“IAS”), DoubleVerify (“DV”), and HUMAN Security, among others, claim in their marketing materials to be able to perform real-time bot filtering and have the capability to prevent ads from serving to declared bots, such as those on the IAB Bots & Spiders List?
2. Do these verification vendors receive access to the “User Agent” field in real-time programmatic ad auctions from demand side platforms like Google DV360 and the Trade Desk?
3. Can the verification vendors’ pre-bid technology actually stop ads from serving to declared bots on the IAB Bots & Spiders List, or merely prevent ads from serving on website domains with historically high levels of bot traffic? If the latter, what evidence exists that can demonstrate specific websites are getting blocked, deliberately or inadvertently, from ad campaigns and thus de-monetized?
4. If the verification vendors do not receive access to the User-Agent and cannot block declared bots, did these vendors make false advertising claims and engage in deceptive trade practices when promoting their pre-bid bot avoidance or suspicious activity blocking technology?
5. What is the extent of the resulting financial harm to the United States government and non-profit advertisers, as well as to publishers that paid for this ineffective bot avoidance technology?

Additionally, Senator Warner requested that the Justice Department investigate the following:

1. Whether ad verification companies such as IAS, DV, and HUMAN have knowingly misrepresented their capabilities to federal government clients or government contractors, particularly regarding their ability to detect and filter bot traffic in real-time.
2. Whether the ad verification firms involved in these failures violated the False Claims Act by charging the government – or government contractors – for services they did not deliver.

Sen. Warner has been vocal about the harm caused by this continued fraud for years, and as the digital space continues to grow in reach and importance, he has stressed the need to reign it in. In 2016, Sen. Warner first called on the FTC to protect consumers from this digital fraud. In 2018, he expressed concern over its continued prevalence following a detailed reporting about inaction by the FTC and Google to curb these efforts.

A copy of the letter to the FTC is available here. A copy of the letter to the DOJ is available here.

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