A W5H Exploration of Ad Fraud
December 20, 2017
What Advertisers Need to Know About Ad Fraud (…plus a free eBook download)
In 2016, a cybersecurity firm known as White Ops uncovered a sophisticated and incredibly lucrative advertising fraud ring that was generating up to $5 million per day in revenue by targeting the premium ad ecosystem. The ‘bot farm,’ identified as MethBot was a collective of hackers that were falsifying IP addresses to imitate human activity and artificially inflating online video views, in some cases up to 300 million views per day.
If this invasion on the programmatic ad ecosystem taught marketers one thing, it’s that there’s room for education on ad fraud because its sophistication will continue to evolve. Digital advertisers must be aware of the potential damage these sophisticated fraudster networks are capable of causing and continue to take measures to minimize their impact.
What is Ad Fraud?
Ad fraud is any deliberate activity by hackers, such as bot farms, that prevents the bona fide delivery of advertising (digital, video) to the right audience, at the right time, and in the right place (country, city, etc.)
Generally, it has at least one of the following characteristics:
- Nonhuman traffic (bots, etc.)
- Zero chance of being seen
- Intentional misrepresentation
But, sometimes there are humans behind the clicks. Example of human traffic ad fraud include:
- Domain spoofing
- Site bundling
- Invisible ads
Who is Committing Ad Fraud?
Just a few examples:
- Traffic Brokers
- Click Farms
- Internet Bots
- Fraudulent Affiliates
Why Does Digital Ad Fraud Exist?
There are several contributors to the environment that makes ad fraud possible and persistent:
- Technically, ad fraud isn’t illegal
- The open nature of programmatic ad marketplaces
- Because incentives across the ad supply chain are misaligned, the problem is treated passively (while punishing those who are following the rules)
Where do we See Ad Fraud?
- Fake clicks
- Fake news
- Fake views
- Fake video completes
When does Ad Fraud Occur?
While ad fraud should be considered a moving target, research suggests a number of patterns that helping ad platforms to get in the mind’s of those people and networks committing ad fraud:
They follow the money: because video captures the largest CPM of any ad format, fraudsters are more often targeting premium video ad platforms.
Bot traffic is highest at night: they want to capture the lowest hanging fruit in the most incognito way.
They target hard-to-fill demographic quotas: there’s only so many people making a certain amount of money in a certain neighbourhood in a certain city.
You need to equip yourself with the knowledge you need to successfully combat ad fraud.
We’ve developed a deep dive on this topic in eBook format, “Protecting Your Brand Against Ad Fraud”: strives to help digital marketers learn more about this important topic so they can safely and successfully participate in the protection and growth of their digital advertising.