Sizing Digital Ad Fraud Investigation by Augustine Fou
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Augustine Fou - 1 - Buckets of Ad Fraud Impressio ns (CPM fraud) Botnets generate fake pageviews which produce ad impression “inventory ” that is sold into ad exchanges. Clicks (CPC fraud) Leads (CPL fraud) Sales (CPA fraud) Bots type search queries to bring up search ads and then click on the ads to earn share of CPC. Bot or low wage workers fill in lead forms with real addresses and get paid bounty per lead. Fake sites set up to do cookie stuffing or trick users to click on affiliate links to earn rev share.
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Digital Ad Fraud is bigger than most people think... here are some collected estimates from various industry sources and researchers.
Transcript of Sizing Digital Ad Fraud Investigation by Augustine Fou
Augustine Fou- 1 -
Buckets of Ad FraudImpressions
(CPM fraud)
Botnets generate fake pageviews which produce ad impression “inventory” that is sold into ad exchanges.
Clicks(CPC fraud)
Leads(CPL fraud)
Sales(CPA fraud)
Bots type search queries to bring up search ads and then click on the ads to earn share of CPC.
Bot or low wage workers fill in lead forms with real addresses and get paid bounty per lead.
Fake sites set up to do cookie stuffing or trick users to click on affiliate links to earn rev share.
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Display Ad Impressions
• By far, the easiest to commit – fill a web page with many display ads and repeatedly load the page with scripts or bots
• Clients pay on CPM basis and are usually goaled on the number of impressions delivered and CPM
30 – 60%fraudulent, wasted, not-in-view
IAB: FY 2012 Display Ad Spend = $7.7B
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Video Ad Impressions
• Advanced bots are programmed to load video ads and wait till they are counted as “views” before leaving the page
• Video ads have 10x the CPM compared with display ads, and are therefore a prime target for ‘bad guys’
50 - 77%fraudulent, autoplay, wasted, not-in-view
eMarketer: Digital Video Ad Spend est. $4B in 2013
Source: Vindico via Adweek, December 15, 2013
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Search Ad Clicks
• Search ad fraud is a bit more involved to commit and usually occurs on “search partner” sites (not the main search sites)
• Bad guys set up sites with no content, execute searches with lucrative keywords, and click the ads with bots
20 - 40%fraudulent, accidental, wasted
Source: Adometry Click Fraud Report 1H 2013
IAB: FY 2012 Search Ad Spend = $16.8B
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Affiliate Sales Fraud
http://www.businessinsider.com/ebay-the-fbi-shawn-hogan-and-brian-dunning-2013-4
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Lead Fraud ~ 20-40%
http://www.webranking.com/blog/lead-click-fraud-adsense-scam-google-adwords-advertisers
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Background
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“Digital ad fraud is well known and well documented. However, the magnitude of it may not yet be well understood. Furthermore, ‘industry constituencies [may be] insufficiently motivated’ (Source: IAB) to act ferociously to deter and reduce these fraudulent activities.”
-- Dr. Augustine Fou
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Why Now?“As more ad inventory is bought and sold programmatically on ad exchanges, bad guys are finding it far easier to commit fraud because few agencies and advertisers actually check in detail the hundreds of thousands of sites on which the ads are run. It’s easier to hide in a far larger haystack.”
-- Dr. Augustine Fou
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The Opportunity
As more digital ads are placed entirely programmatically, the opportunity for fraud continues to increase.
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The Motive“Highly Lucrative, ProfitableThe aggregate ad revenue for the sample of 596 sites was an estimated $56.7 million for Q3 of 2013, projecting out to $226.7 million dollars annually, with average profit margins of 83%, ranging from 80% to as high as 94%.”
Source: Digital Citizens Alliance Study, Feb 2014
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Dr. Augustine Fou – Digital Consigliere“I advise clients on optimizing advertising across all channels. One main area of focus is reducing ad waste due to fraud – fake impressions, clicks, leads, and sales.”
FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM)
MCKINSEY CONSULTANT
CLIENT SIDE / AGENCY SIDE EXPERIENCE
PROFESSOR AND COLUMNIST
ENTREPRENEUR / SMALL BUSINESS OWNER
PHD MATERIALS SCIENCE (MIT '95) AT AGE 23
@acfou
ClickZ Articles: http://bit.ly/augustine-fou-clickzSlideshares: http://bit.ly/augustine-fou-slidesharesLinkedIn: http://linkd.in/augustinefou
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Related ArticlesFake YouTube VideosBy: Augustine Fou, December 2013
Motive and Opportunity for Ad FraudBy: Augustine Fou, February 2014
Fake Facebook ProfilesBy: Augustine Fou, Dec 2013
Fake Twitter AccountsBy: Augustine Fou, August 2013
Display Fraud 101 (video)By: Augustine Fou, Feb 2014
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ROI Case for Solving Ad FraudBy: Augustine Fou January 2014
Digital Ad Fraud BriefingBy: Augustine Fou December 2013
How Display Fraud WorksBy: Augustine Fou, May 2013
How Click Fraud WorksBy: Augustine Fou, November 2013
The Magnitude of Digital Ad FraudBy: Augustine Fou, November 2013
