Pixalate wants to protect Web and mobile advertisers from fraud (exclusive)

Internet ad revenue recently hit a historic high, surging to $20.1 billion in the first half of 2013, but many of these dollars could be wasted due to fraud.

Real-time ad analytics platform Pixalate aims to solve many of the biggest challenges facing digital advertisers, and it has raised $4.6 million to do so.

The company collects performance data on display and mobile advertising to help buyers improve their online marketing campaigns and optimize their spending. It has tools for comparing media buying channels, DSPs, ad exchanges, and websites, and aims to bring more transparency to the whole process of ad buying.

“Advertisers want to invest more with their real-time bidding (RTB) media buys, but they are inhibited because there’s no transparency into what inventory is being purchased,” said CEO Jalal Nasir. “That, coupled with high fraud rates, seriously constrain spend. With Pixalate, advertisers can now understand what they are buying, detect fraud, and optimize spend all in real time.”

Nasir said industry experts estimate that 34% of online ad inventory and 38% of mobile ad inventory is fraudulent. Pixalate’s technology detects fraud from incentivized ad networks, malware, retargeting bots, click farms, and more, and notifies advertisers of anything suspicious.

Its ad analytics and attribution solution creates heat-maps, so advertisers can see what is happening with their ads and filter the results by specific categories, like location or size. It also provides mobile statistics and gives advertisers a view on “ad waste,” so they can see how many impressions were seen versus simply served. Pixalate’s technology will also tell advertisers if they are being overcharged for impressions that were never served.

Pixalate’s solutions also present mobile and interaction statistics, like hover times, clicks, and conversions.

But data alone is not enough, it’s what you do with it. This is where Pixalate’s AdWisely tools comes into play. AdWisely makes specific recommendations on what advertisers can do to improve results.

Advertising makes the Internet go round. It pays for the content you read, recommends products you might like, and helps brands large and small get in touch with their target audience. However as Nasir said, advertisers don’t always know where their ad spending is going, if they are being ripped off, or how their ads are faring.

As Internet advertising technology gets more sophisticated and as more types of businesses get involved, companies like Pixalate are helping buyers navigate this confusing and complicated world with data. Exalate is another well-known player in this space, along with App Annie, Flurry, and Distimo for mobile ads.

Javelin Venture Partners led this round. Santa Monica, Calif.-based Pixalate was founded in 2011 and is integrated with AppNexus, OpenX, RightMedia, MediaMath, Google AdSense, and DoubleClick Ad Exchange and Turn. Its analytics will be free to brands and agencies starting in 2014.