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Ad Fraud Estimates by Augustine Fou Technical Forensics
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Ad Fraud Estimates by Augustine Fou Technical Forensics

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Digital Ad Fraud estimates vary widely based on the methodology used to detect and the rounding and estimating of what can be considered "fraud" or "suspicious" ads. Regardless of the methodology, the ...

Digital Ad Fraud estimates vary widely based on the methodology used to detect and the rounding and estimating of what can be considered "fraud" or "suspicious" ads. Regardless of the methodology, the size of the fraud is large and needs to be addressed by the industry as a whole.

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  • Very interesting - thanks for sharing. Is it possible to list the sources on the first slide?
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Ad Fraud Estimates by Augustine Fou Technical Forensics Ad Fraud Estimates by Augustine Fou Technical Forensics Presentation Transcript

  • Augustine Fou- 1 - Digital Ad Fraud Estimates Impressions (CPM/CPV) Clicks (CPC) Search $18.5B $36.2B Ad Spend Display $8.2B Video $3.0B Mobile $3.7B$2.8B (U.S. digital ad spend only) DollarsAvg Fraud Rate $4B50%Display $2B60%Video $6B30%Search $2B40%Mobile $14BTOTALS 39% Multiple sources
  • Augustine Fou- 2 - Ad Fraud Ranges • Display ad fraud fake ad impressions created by bots • Video ad fraud fake video ad views generated by bots • Mobile ad fraud fraudulent or accidental clicks • Search ad click fraud click fraud on search ads 30-70% 50-80% 20-40% $3-7B $1-2B $4-8B (U.S. Only) 30-50% $2-3B 50% 60% 30% 40% Range DollarsAverage
  • Augustine Fou- 3 - The Opportunity As more digital ads are placed entirely programmatically, the opportunity for fraud continues to increase.
  • Augustine Fou- 4 - The Motive “Highly Lucrative, Profitable The 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
  • Augustine Fou- 5 - 39% human 61% bot traffic Bot vs Human Web Traffic Source: Incapsula 2013 Source: Solve Media Dec 31 2013 51% suspicious 22-29% confirmed bot
  • Augustine Fou- 6 - Digital Ad Spend (IAB FY 2013) Impressions (CPM/CPV) Clicks (CPC) Leads (CPL) Sales (CPA) Search 43% $18.5B Video 7% $3.0B Lead Gen 4% $1.7B 11% Other $4.8B Source: IAB, FY 2013 Internet Advertising Report, April 2014 $36.2B Display 19% $8.2B Mobile 15% $3.7B$2.8B NOTE: figures from IAB FY 2013 ($43B annual ad spend) CPM Performance • classifieds • sponsorship • rich media • email $6.5B
  • Augustine Fou- 7 - Reported Cases
  • Augustine Fou- 8 - A large British packaged goods company that sells several household name brands in the U.S. was defrauded of $488,000 when its $10,000-a-day video ad budget was spent on a network of junk web sites, according to an internal document leaked to Business Insider. Ad Budgets Spent on Porn Sites Source: Business Insider December 2013
  • Augustine Fou- 9 - Online Ad Fraudsters Are Stealing $6 Billion From Brands Security firm White Ops claims 1 in 6 PCs infected by bots By Mike Shields Stealing $6 Billion From Brands Source: Adweek, October 2013
  • Augustine Fou- 10 - Fraud is endemic across today’s display advertising ecosystem. Luttrell estimates 20 to 30% of display ad inventory is fraudulent. For an empirical counterpoint, the Chameleon botnet spanned all the major US ad exchanges at the time of disclosure and was driving enough fake traffic—on its own—to account for 30% of the display ad inventory sold through one of these major exchanges. The Chameleon botnet is not unique. For example, we will shortly be disclosing details of a second major botnet, with a distinct signature, targeting a distinct cluster of websites. Botnet traffic is also not just limited to fraudulent publishers. We have come to understand that the Chameleon botnet, for example, has supplied traffic both to the website of one of the most highly regarded US newspapers and also to the websites of one of the world’s largest online media companies. 20-30% of Display is Fraudulent Source: AdExchanger April 2013 With display ad spend at $8B, that is $2-3B of fraud
  • Augustine Fou- 11 - Online fraud costs e-retailers $3.5 billion in 2012 CyberSource’s annual report notes an average fraud rate of .9% of online revenue. Online fraud costs e-retailers $3.5B Source: Internet Retailer, March 2013
  • Augustine Fou- 12 - Fighting Ad Fraud
  • Augustine Fou- 13 - What Others Focus On optimize
  • Augustine Fou- 14 - What We DoContinuously find and update list of bad guy sites
  • Augustine Fou- 15 - Digital Ad Forensics Process Sizing of ad fraud Forensic AnalysisPreliminary Scan Implementation Augustine Fou- 15 - • Technology Tools • Statistical analysis Maintenance Preliminary analysis of paid campaigns and analytics to determine magnitude of the ad fraud impacting client. FREE Creating recommended list of changes, including list of sites to exclude in each ad channel. $$$ Subscribe to triangulated, cross-industry database of “ad fraud offenders” to continuously update blacklists and whitelists. $ • Budget shifts • Further optimization
  • Augustine Fou- 16 - How We Do It 1. give us access to Adwords, Bing Ads, and Analytics 2. we estimate the size of the problem 3. client signs on to do the project 4. we run the advanced technical analysis 5. give them the large list of sites to blacklist 6. we provide ongoing “innoculation” updates
  • Augustine Fou- 17 - 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-clickz Slideshares: http://bit.ly/augustine-fou-slideshares LinkedIn: http://linkd.in/augustinefou
  • Augustine Fou- 18 - Related Articles Fake YouTube Videos By: Augustine Fou, December 2013 Motive and Opportunity for Ad Fraud By: Augustine Fou, February 2014 Fake Facebook Profiles By: Augustine Fou, Dec 2013 Fake Twitter Accounts By: Augustine Fou, August 2013 Display Fraud 101 (video) By: Augustine Fou, Feb 2014 Augustine Fou- 18 - ROI Case for Solving Ad Fraud By: Augustine Fou January 2014 Digital Ad Fraud Briefing By: Augustine Fou December 2013 How Display Fraud Works By: Augustine Fou, May 2013 How Click Fraud Works By: Augustine Fou, November 2013 The Magnitude of Digital Ad Fraud By: Augustine Fou, November 2013
  • Augustine Fou- 19 - APPENDIX
  • Augustine Fou- 20 - Digital Ads by Format Source: IAB, 1H 2013 Digital Advertising Report, Oct 2013
  • Augustine Fou- 21 - Pricing Model Trends Source: IAB, 1H 2013 Digital Advertising Report, Oct 2013
  • Augustine Fou- 22 - Real Time Bidding Ecosystem