Media buyers and publishers continue to struggle with bot nets, fraudulent clicks and mechanical thieves stealing impressions. RadiumOne execs call it "pixel jacking" -- using a pixel to create fraud on the Web, the "land of the new pirates."
In fact, RadiumOne has verified more than 1,000 domains used for pixel jacking, and estimates it effects the more than 10,000 sites across the Web. RadiumOne suggests it cost the industry an estimated $324 million annually, about 5.4% of all budgets spent on display advertising.
Kyle Napierkowski, director of ad optimization at RadiumOne, and his team connect the dots between data and the needs for brands and agencies to pay more attention to the depth of big data and exchange-traded ad impressions. As a means to combat the problem, networks need to provide audience analyses and validate sites.
It turns out fraudsters have learned about lucrative pixels on sites used by companies to build retargeting segments to track consumers. They can identify "high value" consumers likely to convert. The bots will send garbage traffic to Web pages, "fire-up the pixels, and direct them to a fraudulent publisher's page where the networks vying for business will bid high for the conversion," said Doug Chavez, VP of marketing at RadiumOne. "These are ghost users on a botnet infected computer."
It may seem small considering that display-related advertising accounted for $2.9 billion or 33% of total revenue in the second quarter of 2012, up 6% from the $2.7 billion sequentially, according to the IAB Internet Advertising Revenue Report conducted by PricewaterhouseCoopers (PWC). Any money advertisers forfeit to fraud is not insignificant.
Chavez points to one of the biggest problems as marketers not having a way to validate consumers clicking on display ads are real. While CAPTCHAs provide verification for some conversions, not display ads. "Agencies and brands have no clue this is happening," he said, pointing to data, programmatic buying and automation as some of the biggest culprits.