Meaning
A commercial settlement process adjusts invoice totals between advertisers and media publishers based on verified discrepancies in traffic quality. In digital advertising agreements, ad fraud reconciliation occurs after the billing cycle to deduct charges for impressions or clicks generated by non-human or malicious sources. Contracts typically define the specific measurement windows and third-party verification partners whose reports govern these adjustments.
Contractual Remedy
Dispute resolution provisions in master services agreements establish the precise threshold of invalid traffic required to trigger a credit or refund. For instance, if the verified invalid traffic exceeds a negotiated baseline of one percent, the purchaser can withhold payment for those specific impressions. Publishers must accept these deductions when they are documented by accredited verification vendors.
Auditing Protocol
Third-party audits verify the raw logs against delivery reports to identify fraudulent patterns such as bot activity or click injection. This audit must be completed within a defined lookback window, usually thirty days from the end of the campaign. By establishing a clear timeframe, the verification minimizes the risk of outstanding liabilities on the agency ledger.
Settlement Term
The calculation of the credit note relies on the difference between the gross invoiced amount and the validated delivery metrics. This financial adjustment protects the ad buyer from paying for unviewable or automated impressions, directly securing the return on ad spend. Agreements often require the settlement to be applied as a deduction from the next monthly invoice, although cash refunds are sometimes negotiated for ended contracts.
If the publisher contests the audit, the contract provides for a joint review of the platform log files to isolate disputed timestamps and geographic regions.
