Ad tech giant Colossus is in trouble after being accused of tricking advertisers into buying from viewers it never intended to target.
Shocked by the allegations, several of them are currently scrutinizing ad tech vendors to ensure their ad buys were not misconstrued.
Their concerns stem from a report by ad transparency startup Adalytics that found that Colossus fraudulently labeled IDs, leading to unintended ad buys. The consequences of such erroneous purchases can be significant, including targeting the wrong users, repeatedly sending ads to users, and confusing conversion tracking models.
This situation has particular resonance for one Agency Holdings group.
One executive, who requested anonymity, said Colossus is the company’s approved supply-side platform and is used by multiple customers. Following Adalytics’ report, the company is currently carefully examining bid requests and impressions routed through his Colossus since the beginning of the year to verify claims of identity spoofing and its potential impact on clients. . Next steps include assessing the financial impact and seeking refunds from Colossus, as well as reassessing our relationship with SSP more broadly.
Agency executives weren’t yet sure how much customers would end up paying from Colossus, but assuming the ID could be switched from an average, untargeted user ID to a known user, at least We estimate a 30% increase. Evaluate your CPM based on the improvements you experience through cookie-free targeting alternatives, such as Google’s Privacy Sandbox. However, when additional identifying information is added to these exchanged IDs, such as the user’s occupation or a multicultural identifier (if Colossus SSP specializes in multicultural audiences), the baseline CPM increases from 200% to They say it could increase by 400%.
And this government agency is not the only one reevaluating its relationships. Overall, some ad tech vendors have completely stopped using Colossus as a marketplace.
“We stopped buying from Colossus,” said one ad tech executive, who requested anonymity due to commercial considerations.
Their decision was made independently of Adalaytics’ report and was based on their own testing, and ultimately they came to the same conclusion. A summary of the results can be found here, but the main takeaways are: ID mismatches are not unique to Colossus. In fact, they are very common across various ad tech vendors. However, Colossus’ unique problem was the user ID mismatch, which set it apart from other vendors.
The same is true for one publisher, who also spoke to Digiday on condition of anonymity. But Adalaytics’ report wasn’t the only one that stopped advertising sales on the Colossus programmatic marketplace. It was also the financial situation.
According to Colossus’ parent company Direct Digital Holdings’ Form 8-K: Latest Report filed April 23:
Such a rapid succession of worrying events certainly leaves room for speculation.
Executives at a publisher using Colossus SSP (among 32 other SSPs) suspended Colossus after learning of the Adalytics report last week, citing identity discrepancies and signs of internal financial troubles. This is why I said that. It rings too many alarm bells.
Colossus SSP was only a single-digit percentage of publisher programmatic fill rates. The executive continued: “It’s not a significant risk to us, but it’s not worth the risk either.” So I decided to pause until I could figure out what was going on. ”
The publisher went through all 33 SSPs it works with with a fine-tooth comb, investigated whether ID rotation or ID spoofing was occurring at other vendors, and investigated one more SSP (where executives (He declined to give his name). He was caught doing the same thing.
Colossus could face other problems with this, which could ultimately lead to a loss of trust and business from publishers in the future.
For a publisher that is already being replaced by other SSPs, Colossus’ placement rates were so low that the publisher said: Even if it looks unusual compared to all other SSPs, it’s not worth the risk for us. ”
Not only that, but the fact that the auditor of Colossus’ parent company suddenly resigned and the company had to ask for an extension of the filing deadline raised a lot of red flags for the publisher’s executives about Colossus’ financial situation.
There is no money outstanding from Colossus to media companies, except for a small portion of ad inventory sold through SSP in the past few weeks, executives said. Adding an extension to their filing is never a good sign. …Usually there are very specific reasons why they leave, like for payment or not wanting to be associated with something or accredited… [by] Put their names on the financial statements. ”
Meanwhile, Colossus responded to Adalytics’ claims that it misdeclared its identity in bid requests, blaming the complexity of the ad tech ecosystem for the problem. They point out that the vast number of technology integrations with different vendors inherently exposes the platform to potential inconsistencies.
While this may be true, there are some things to consider. The sheer scale, duplication of valuable identities, selective targeting of major demand-side platforms, and potential economic benefits are enough to make identity mismatches raise questions in some people’s minds. It suggests that. Advertising executives claimed that these were not isolated incidents, but deliberate actions by Colossus SSP to misrepresent its inventory in order to obtain higher yields.
