Colossus Under Investigation for Alleged ID Mismanagement in Ad Tech

Adalytics, an ad transparency startup, has accused Colossus, an ad tech giant, of mislabeling IDs which led to advertisers unintentionally purchasing the wrong audiences. This mislabeling has significant repercussions such as targeting incorrect audiences, overexposure of ads to certain users, and potentially disrupting conversion tracking models.

An agency holding group, upon learning of the Adalytics report, is taking the following steps:

• Reviewing bid requests and impressions routed through Colossus since the beginning of the year to validate claims of ID spoofing.
• Assessing the financial impact of the alleged ID spoofing on their clients.
• Seeking refunds from Colossus for any financial fallout.
• Considering a broader reevaluation of their relationship with the Colossus SSP.

The agency executive estimates that if IDs were switched from an average, untargetable user ID to a known user, it could result in at least a 30% lift in CPM. This is based on their experience with cookie-less targeting alternatives like Google’s Privacy Sandbox. However, if additional identifying information on these swapped IDs was provided, such as profession or multicultural identifiers, the baseline CPM could increase by 200% to 400%.

The publisher decided to pause using Colossus SSP for several reasons:

• The ID mismatching issue highlighted in the Adalytics report, which suggested a systemic problem with Colossus' practices.
• Financial concerns about Colossus, as indicated by the abrupt resignation of Marcum, the auditor for Colossus’ parent company, and the company's late filings.

Given that Colossus SSP only accounted for a single-digit percentage of the publisher’s programmatic fill rate and the risks associated with these issues, the publisher deemed it not worth the risk to continue without further investigation.

Several factors suggest that the ID mismatches at Colossus might be intentional:

• The scale of the issue and the fact that it was not an isolated incident.
• The replication of valuable IDs and selective targeting that could lead to higher yields.
• The potential financial benefits for Colossus from misrepresenting inventory.

These points have led some ad execs to doubt that the mismatches were accidental and consider them a potentially intentional practice by Colossus SSP.