Up Close With Digital Ad Fraud

I recently spoke with Forensiq’s David Sendroff, founder and CEO, and Dean Harris, the company’s chief marketing officer, about digital ad fraud in the programmatic space, which the company was founded to combat.

Rather than letting numbers tell the story, Sendroff showed me what digital ad fraud actually looks like. It left an impression on me, so I have devoted today's RTBlog to thoughts on ad fraud.

Digital ad fraud is deceiving, dishonest, unscrupulous and the like -- but unfortunately, it is also rather clever and inventive. For example, if a consumer has botnet malware on their computer, the fraudsters can load a hidden browser as a background process, so the consumer will never see it. That browser then goes to legitimate Web sites to store cookies on the consumers’ computer.

The hidden browser can then load a Web page that does nothing but serve dozens of ads in multiple iframes. Since these iframes can hide the true page URL, Sendroff explained, the advertiser never sees where the ads really appear.

"Instead, they see domains based on certain categories like automotive, healthcare and insurance," Sendroff noted. "These domains contain scraped articles disguising themselves as blogs and news portals."

Because the botnet in this example craftily stored cookies on the consumers’ browser, the ads that are being served are from legitimate brands that think they are retargeting recent visitors. What a waste of money.

In a different example, each ad appeared on the screen for one second --  which meets the Media Rating Council’s standards for a viewable impression, and costs the advertiser more money. Such ads can "appear alongside illegal copyrighted content, which users often play in full screen with the ad burning through impressions during a 2-hour movie or are served inside of a hidden 1x1 pixel iframe," Sendroff said. After the one second is up, a whole new wave of ads are served, and the cycle continues.

It’s rather hypnotic to watch -- kind of like this gif of the Joker burning money.

These are just two examples of a fraudster’s tactics, but they are eye-opening.

It’s also interesting to note that botnets can play on and take advantage of consumer habits, not just advertising tactics. For instance, the botnet in this above example wouldn’t have been able to do its thing if the consumer hadn’t ended up with malware on their computer in the first place. Of course, no consumer is impervious to malware scares -- and not all fraud schemes rely on malware -- but it just goes to show that not every part of the war against digital ad fraud is in the hands of the industry. (Or maybe it is, because one could argue that even if a consumer had botnet malware on their computer, it wouldn’t matter if the advertiser was never duped into buying fraudulent impressions. It’s a chicken or egg debate.)

Sendroff believes digital ad fraud is a solvable problem -- and I plan to do a deeper dive on who it’s a problem for and how big this problem is. Stay tuned.

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2 comments about "Up Close With Digital Ad Fraud".
  1. Augustine Fou from Marketing Science Consulting Group, Inc. , August 6, 2014 at 1:42 p.m.
    I agree with David that it is solvable. And the main point is that no single technology solution is enough (it will then be an arms race with the bad guys who have way more resources and who don't play by any rules). What is needed is a concerted industry effort by all the parties in the value chain.
  2. William Hodges from AdSupply, Inc. , August 6, 2014 at 4:01 p.m.
    Agreed with the article and Augustine on this one. Competitiveness and closed doors between companies creates ample space for fraud to drive a cargo ship through it. However, many big players make serious profits on fraud and won't want to see a 25-50% cut in revenue tomorrow. Only the advertisers can fix this by starving poor players in the market and making them responsible, transparent, and accountable. And by poor players, I'm looking at most of you. Yes, you too.