To be clear, this is a real question, rather than a rhetorical “would those ad verification tools just @#$& go away!”
These tools (such as AdXpose and DoubleVerify) perform what seems to be a necessary service: to alert advertisers when their display ads appear in a way that breaches the explicit or implict contract with the publisher or network: below the fold; to the incorrect user segment; in the wrong geographic area, within questionable content. 
Like the “click fraud” exposés (and lawsuits) earlier this century, publishers have been documented charging for media which (either explicitly or implicitly) fails to meet the reasonable expectations of advertisers.
If the practicality of these services is not enough to generate strong interest from advertisers, then the emotional reaction of marketing leaders, many of whom have grown up in a world of well-thought out creative execution, should do the trick: “I @#$& paid for my brand to be WHERE?”
The reason I ask the question “will ad verification tools go away” is that we have seen something very similar with respect to paid search click fraud, mainly during the 2004-2006 time frame. Companies like ClickForensics popped up to mitigate the real fears of advertisers paying for clicks that were caused by bots, occurred in different countries, represented multiple clicks on the same ad by the same user, etc. Without exception, these companies have not caught on.
There were three main things that happened to halt these “click monitors” in their tracks:
1. First, search engines (Google in the forefront, but also Yahoo) took responsibility for the quality of their clicks, and charged advertisers what they considered a fair price based on the validity or quality of the click. One of the main reasons this worked is that the search engines knew a lot more about the click than any third party could, and used that information appropriately.
2. Search engines (understandably) preferred to take responsibility for their own quality control vs. outsource it to a third party, who would have been paid by the advertiser (and therefore incentivized to detect fraud.)
3. The main reason the “click fraud” alarm bells became silent: advertisers realized that they could determine the quality of a click by analyzing and optimizing for the effectiveness, over time, of each keyword, on each search engine. This gave advertisers not only piece of mind that they were in control, but also allowed them to assess the quality based on performance, and support that assessment with their budgets. (And this in turn forced the search engines to step up their own monitoring: it was the only way to defend their own businesses.)
It’s this last bit, #3, which leaves me with the thought that perhaps these ad verification companies may have a longer run at alerting advertisers of publisher indiscretions than the click fraud companies did. While search advertisers were already pretty advanced at tracking performance by the time click fraud companies sounded the alarms, I am not sure that branded display advertisers and agencies engage in the level of analytics which can tell them how their branded display ad is “working.” Sure, it’s easier with a clear direct response “punch the monkey” display ad- those work like search ads do. But until advertisers and agencies get better at understanding how a higher-funnel branded display ad drives the output of downstream sales (v.s, inputs like impressions, reach, frequency, etc) and how to attribute conversions further up the funnel, they may be stuck in wondering where their ads are shown – and become very attractive targets for ad verification tools.
Updated 5/4:
If I were a/an:
1. Investor: I would be skeptical of the long term value of these ad verification companies;
2. Digital Ad Agency: I’d make sure I could deliver a robust level of analytics for my clients, where the top-of-funnel performance of display ads would become evident (rather than outsource that). After all, if you can’t determine via routine analytics the holistic (vs. DR) impact of branded and network display, what exactly are you providing?
3. Publisher: I’d build powerful ad verification functionality internally to earn trust (rather than allow others to patrol my backyard).
4. Advertiser: I’d require #2 and #3 of my partners. In the meantime: I’d certainly be talking to these ad verification folks.
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Harrison,
You make some valid points here. I do agree that “point solutions” for verification may not create long term value for investors. Some providers have commoditized the service, and when viewed strictly as an audit tool, verification does feel more like a feature than a product. That’s why AdXpose focuses on optimization and attribution as much if not more than we do verification – we want to grow the value of all effective inventory exponentially for both publishers and advertisers. Helping the agencies and brands you mention determine the right price for an online “engagement” within an ad, for example, creates an entire new valuation for display, and analytics and metrics like this will be a key driver for the oft heralded move of brand dollars to online.
However, in making your central analogy, you conveniently overlook an endemic issue in display that is largely if not entirely absent in search: fragmentation. The publisher landscape in SEM even at its most labyrinthine included only 30 or 40 players in toto. Arguably, only 10 of those mattered. Fast forward to today, and there are (generously) five SEM publishers left. The market managed to efficiency quickly because the traffic (and quality) graph was immensely top-heavy. Basically, the five publishers who mattered solved the problem.
Display is a different beast. There is a $6-9B “non-premium” display market sold mostly indirectly and with little to no transparency. This does not even include the directly purchased “premium” inventory which can be inappropriately targeted as often as indirect. There are hundreds of players in the supply side ecosystem and there is blinding confusion at the agency level. Companies like ours are leading the charge to eliminate the confusion and inefficiency, in a way that allows us to be a driver of a new online economy and allows everyone to participate in the immense upside.
The appropriate analogy for AdXpose, at least, may be to the site analytics firms (Omniture, Coremetrics et al.) as opposed to the Click Fraud firms. The former are focused on increasing the value of online media and growing the pie, while the latter in many cases simply sought to eliminate negative space and ended up putting themselves effectively out of business.
Kirby Winfield
President & CRO
AdXpose
Sorry, had to vent. Anyway as much as I would love to believe that skepticism and critical thinking could become mainstream, I dont see a lot of promising evidence. My roommate is a huge John Edwards fan. She even went to a show taping once and is convinced he told her sister things he couldnt have known. Then she went to a $300/hour psychic and related the experience in a way that made me – for just a moment – wonder if it could be real. But when I listened to the tape of the session it was clear that the woman was wrong at least as much as she was right and that my roommate fed her most of the main facts while the rest were merely statistic probabilities. Shes listened to that tape many times over and is just as convinced of the psychics gifts as the day she stepped out of her office (or parlor, or wherever.)