Marketing Madness

Mundo Media Bankrupt Because of Ad Fraud

At its peak, Mundo Media had more than 100 employees in its offices worldwide. At the same time, the company also owed approximately $25.7 million to the Royal Bank of Canada. Huge volumes of bot traffic and the loss of major advertisers are cited as the underlying causes of the ensuing difficulties.

Mundo Media tried to avert the crisis by reducing the staff to 45 employees and cutting its expenses. Negotiations on a full or partial acquisition were launched in January 2019. Some companies expressed an interest in purchasing the assets. None of them, however, have got around to that. To continue its operations, Mundo Media had to pay out $900, 000. However, that didn’t happen, and the bank jointly with Mundo Media and the FTI consulting company initiated the receivership process, appointing Ernst&Young as Receiver of Mundo.

Digital advertising is in full on growth mode across two trend-driven tracks. First, the continued growth of digital advertising which is estimated to top $348 billion dollars by the end of 2022. (That figure will nearly double what is spent on TV advertising.)

Unfortunately, accompanying this proven market momentum is a corresponding increase in the largest invisible crime in the world, costing businesses $51 million dollars a day — and rising.

Multiple, recent marketplace events are finally shedding overdue light on the invisible crime of ad fraud. Major brands P&G and Unilever have put their digital advertising campaigns under a microscope, and they don’t like what they see.

In a landmark speech on creating ‘a new media supply chain,’ Mark Pritchard, Chief Brand Officer of Proctor and Gamble was blunt in his assessment of today’s ad market as murky, non-transparent and fraudulent.

Ride-sharing service Uber went one step beyond just the court of public opinion. They filed a major lawsuit against 100 ad networks and publishers for fraudulent ad activity. Equally alarming is news that ad giant Google agreed to refund advertisers after an ad fraud scheme was discovered.

tribeOS CEO and co-founder Matt Gallant, added, “Ad fraud is like an earthquake. It hits hard when you first feel it, but it’s the ongoing aftershocks that can literally destroy a company. I’m gratified both advertisers and agencies are finally holding ad platforms accountable to ad fraud draining ad budgets.

Knowing the problem exists is a positive first step. But providing a workable and scalable solution is a more important one. The current platforms all have a massive weakness and that’s their lack of transparency. You don’t know how and where your ad dollars are being stolen and what you can do to stop it.


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Pesach Lattin

Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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