Ad Fraud - The Billion-Dollar Global Crime Nobody Appears Willing To Solve

Advertisers paying for digital advertising that a human never sees is a multibillion-dollar global racket and comes in two forms -- where ads cannot be viewed because they are not on the portion of the screen in view, or where fraudsters generate traffic to fake sites through botnets that just keep opening pages nobody will ever see and charging for the ads that appear.

I've been pretty vocal about how more needs to be done, and that we probably won't see the end of this until jail doors start slamming and the perpetrators are shut down. But I've always looked at publishers as being partly the victims of this vile ripoff trade. This week, however, a former publisher who knowingly bought bad traffic to rip off advertisers talked about how he would spend thousands of dollars a day on traffic so that he could earn a markup of between 25% to 100% depending on the rates advertisers bid to be on his pages, via ad networks. 

It's a pretty uncomfortable read, but it suggests that every part of the supply chain -- other than the advertiser itself -- is either involved in or turning a blind eye to ad fraud, because they all gain from it. Not all are, of course -- that should be made very clear. But clearly, sufficient numbers of publishers, ad networks and agencies are not asking the tough questions that mean the fraud can carry on. The accusation is that for the unscrupulous, there is just too much money involved in rogue publishers buying bad traffic (likely to be computer generated), ad networks selling the ad space to that bad traffic on bad sites and some agencies feeling they can do little to intervene -- if Google can't police the Web, how can they?

Progress is clearly being made with viewability. In fact, in the UK, JICWEBS, the body formed by the IAB and AOP (digital advertisers joining up with digital publishers) has today updated its guidelines on viewability and is setting about re-certifying those who have signed up to its code. The expectation is this process will be completed by the end of the year and, as such, advertisers can be assured digital advertising companies who are signatories are doing what they can to enforce the IAB standard of half an ad's pixels being viewable for a second.

The standard is really there, then, for honest companies to display their credentials. It needs to be applauded, but it can do little about those who actively seek out bad traffic which is served to bad sites via networks which ask no searching questions.

This week's confession from a former rogue publisher, then, does ask the question whether people, such as myself (and I freely hold my hands up to this), have thought fraud was totally due to a few criminals lurking among the huge amount of ad requests flowing in and out of ad exchanges servers every second of the day. The supposition is that some publishers are much more involved in the process than the mainstream media might like to think. Far from being the unwitting victims, as most of us have probably always thought -- some publishers are active instigators.

So it's a fairly depressing scenario in which, potentially (and certainly not usually) a digital advertiser finds that all parts of the supply chain could be infected. In fact, that could be the ultimate depressing fact. Do brand side marketers keep the issue quiet because they don't want the rest of the business knowing that they have no idea how much of their ad budget actually goes on media that people see? 

Is nobody lifting a lid on the issue with any real intent of quashing it because all bar one side of the equation gains from it and the one side that doesn't, the advertiser, doesn't want to admit to their board what a ride they've been taken on?

3 comments about "Ad Fraud - The Billion-Dollar Global Crime Nobody Appears Willing To Solve".
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  1. Laetitia Zinetti from Ebiquity, June 25, 2015 at 11:37 a.m.

    Indeed, fraud seems to be affecting all parts of the supply chain. Advertisers have limited view on their inventory quality and how many "authentic" impressions they receive. In our experience, an increasing number of brands are asking how they can establish the "true" performance of their campaign unless they seek advice from independent consultants.

  2. Ed Papazian from Media Dynamics Inc, June 25, 2015 at 6:45 p.m.

    I suspect that many digital ad sellers, who have priced their "impressions" based on "served" ads, not delivered or "viewable" ads, are fearful of the revenue consequences if a sensible new standard were to be developed. For example, if you are selling video ads at a CPM of $23, which is roughly double the TV all-daypart, all- network type norm, and a fair, new standard for "viewability" elininates 75% of your audience "impressions", what will be the effect on the CPMs and your ad revenues? Will advertisers, who thought they were paying a $23 CPM for ad "exposures"----but were actually buying a lot of "phantom impressions"--- now accept CPMs that are triple or quadruple what they paid before? Or will they demand that the same CPMs remain in force---but only for "viewable" impressions? If the latter situation prevails, wont the sellers take a huge hit in their total ad revenues.?

  3. Mani Gandham from Instinctive, June 28, 2015 at 6:08 p.m.

    This is mostly a case of Hanlon's razor: "Never attribute to malice that which is adequately explained by stupidity."

    That's strong language in the quote but the point stands that much of the issue is because of so many actor in the ad ecosystem who don't really understand how all the technical features work and are so easily swayed by marketing speak and random theories.

    Viewability and fraud are different issues. Viewability has never been hard to measure, but thanks to the IAB's dismal approach to accreditation via the MRC, we have these vendors extracting yet another tax but with no agreed upon standard method which just undermines the entire movement.

    Fraud will always be a problem with bot technology progressing to an incredibly advanced level but some basic checks can and should absolutely be done by every ad provider. However doing that costs money, in return only to reduce inventory and thus sales revenue, so it's clearly at odds with the pure profit motive that a lot of the ad networks go by, regardless of ethics. 

    What this industry really needs is actual standards and auditing enforced strongly and thoroughly, not this quasi-political handshake-and-a-wink environment we have today. When that happens, we'll finally start making some progress towards a better ecosystem for both advertisers, publisher and consumers alike.

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