You’re infected, and probably don’t even know it.

Part two of a three part series discussing digital ad fraud, by John Wilpers, editor of the FIPP Innovation in Magazine Media annual reports.

If you knew how pervasive, costly, sinister, sophisticated, brand-damaging, and well-funded digital advertising fraud is, you would be excused for leaving your magazine job and taking up alpaca farming.

Put yourself in the shoes of a reputable lifestyle magazine executive (we won’t identify him out of courtesy). He assumed his site was clean and his ads were being seen by his high-end readers. He was terribly, terribly wrong. All but two per cent of his automobile client’s 4,000 video ad impressions were seen by bots, not humans.

Consider these statistics: 

  • Global digital ad fraud will cost publishers and advertisers US$6.3billion (yes, that’s billion with a “b”) or US$4.5 million every hour, according to a study by the Association of National Advertisers (ANA) and digital security firm WhiteOps
  • Nearly 25 per cent of all video ad impressions are fraudulent (viewed by machines, not humans)
  • More than 10 per cent of all digital display ad impressions are fraudulent
  • More than half of all traffic purchased by publishers to drive additional unique visitors to their sites is fraudulent (publishers are getting bots not bodies)
  • Almost one-fifth of all re-targeted ad impressions (high-CPM ads directed at consumers who’d earlier clicked on a company’s ad, form or content) are fraudulent
  • Two-thirds of all fraud comes from the computers of everyday consumers whose machines have been secretly hijacked

Don’t think that because you are a “premium” publisher with a terrific reputation that you are immune. Ten percent of your traffic and ad impressions are probably fraudulent, according to the ANA study.

Some consolation? First, you’re not alone. Everyone is affected. Second, there are a growing number of increasingly sophisticated, innovative fraud detection and prevention firms out there to help you defeat the fraudsters.

What exactly is a bot?

Bots are sophisticated software programs installed on a consumer’s computer through seemingly innocent means (e.g., offers of cool toolbars or browser extensions that, once downloaded, secretly install “malware” on the consumer’s computer making that PC a “bot”). Thousands of “bots” or “botnets” then “click” on ads or run videos silently in the background. Advertisers and publishers think they’re paying for real human interactions. Bots can also fill out forms and make purchases.

Why should you care?

Ad fraud wrecks every part of the magazine-advertiser relationship: Content and ads are not seen by any audience and even superlative results are suspect and surprisingly often fraudulent.

“The amount of bot fraud is sadly leading to a crisis of confidence on the buy side,” wrote advertising security company Solve Media CEO Ari Jacoby in Advertising Age.

What are the nine types of digital ad fraud?

  1. Ad Impression Fraud (CPM)
  2. Search Ad Fraud (CPC)
  3. Affiliate Ad Fraud (CPA)
  4. Lead Fraud (CPL)
  5. Ad Injection Fraud
  6. Domain Spoofing Fraud
  7. CMS Fraud
  8. Re-targeting Fraud
  9. Traffic or Audience Extension Fraud

The nine types of digital fraud are explained in further detail here.

Where does the fraud originate?

The ANA/WhiteOps study found that 67 per cent of the bots come from residential IP addresses.

Who are these bad guys?

These are not college kids or lone rogues. A 2013 Adweek piece identified them as “organized crime, Russian millionaires, ex-bank robbers, and one-sixth of the computers in the US.”

How do we beat these guys?

Many defenses have already been defeated:

The ANA/WhiteOps study discovered tactics publishers and advertisers believe are effective are, in fact, not: “Bots faked all of the engagement and viewability metrics we measured,” the report stated.

Another favourite strategy — blacklisting — is easily thwarted as the bad guys simply replace blacklisted sites with new ones.

“The problem is really the industry’s own fault — We’ve been optimising for quantity and have created this crazy breeding ground for fraud,” said Integral Ad Science CEO Scott Knoll. “Advertisers are saying we’ve got to get rid of fraud, but they’re using metrics (rewarding quantity) that encourage fraud.

With more transparency and certification, people doing bad things won’t be able to hide and won’t get paid, said Casale Media vice president, Andrew Casale. “When we make it hard to trade, hard to hide and hard to get paid, we will win.”

Friends in the Fight
•      White Ops
•      Forensiq
•      Integral Ad Science
•      Casale Media
•      Iponweb
•      Spider.io
•      DoubleVerify
•      Telemetry
•      Solve Media
•      Pixalate
•      Improvely
•      AreYouAHuman

John Wilpers is currently editing the 2015 edition of FIPP’s Innovation in Magazine Media World Report which will be launched at the FIPP/VDZ/eMediaSf Digital Innovators Summit in Berlin, 21-24 March 2015 . This will be the 6th edition of the Innovation Report which he has co-authored as consultant with Innovation International Media Consulting . John consults with media companies around the world focusing on multi-platform innovation, organizational integration, and customer-driven editorial management to deliver multimedia content 24-7 across all platforms. He is currently working with the University of Virginia on their print and digital publications after finishing projects with a Czech magazine and newspaper publishing company in Prague, a Washington, DC B2B magazine company, and a Norwegian newspaper group.