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Biznology Webinar on Digital Ad Fraud Mike Moran Augustine Fou
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Biznology Webinar on Digital Ad Fraud Mike Moran Augustine Fou

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Digital ad fraud is more pervasive than most marketers think. This briefing gives a high level overview of what it is, how it is committed, and what you can do about it in managing and optimizing......

Digital ad fraud is more pervasive than most marketers think. This briefing gives a high level overview of what it is, how it is committed, and what you can do about it in managing and optimizing your own digital ad spend.

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  • 1. Thanks for joining! Is What You Don't Know about Ad Fraud Costing You Big Money? February 11, 2014 Augustine Fou, Ph.D We’ll be starting soon! www.biznology.com © 2014 Mike Moran Group LLC
  • 2. Your moderator for today: Mike Moran  Former Engineer Distinguished  A senior strategist at  Author of two popular books on Internet marketing  Founder of @MikeMoran -2- 2 blog mike@mikemoran.com 201-477-8380 © 2013 Mike Moran Group LLC © 2014 Mike Moran Group LLC
  • 3. Is What You Don't Know about Ad Fraud Costing You Big Money? Thanks to all of our sponsors Augustine Fou, Ph.D -3- 3 © 2013 Mike Moran Group LLC © 2014 Mike Moran Group LLC
  • 4. Click the orange arrow -4- 4 © 2013 Mike Moran Group LLC © 2014 Mike Moran Group LLC
  • 5. Your speaker for today: Augustine Fou  Ph.D, Materials Science, MIT ’95  Chief Digital Officer, HCG (Omnicom)  McKinsey Consultant  Client side/agency side experience  Professor at Rutgers, NYU  Entrepreneur/small business owner  Columnist/Speaker ClickZ Articles: http://bit.ly/augustine-fou-clickz Slideshare: http://bit.ly/augustine-fou-slideshares LinkedIn: http://linkd.in/augustinefou @acfou -5- augustine.fou3@gmail.com 212-203-7239 © 2013 Mike Moran Group LLC © 2014 Mike Moran Group LLC
  • 6. Digital Ad Fraud Briefing Dr. Augustine Fou http://linkd.in/augustinefou -6- Augustine Fou
  • 7. AGENDA • Background • Impression (CPM) Ad Fraud (Display, Video) • Search (CPC) Click Fraud • Affiliate (CPA) Revenue Share Fraud • Lead (CPL) Fraud • Current Industry Initiatives • Looking Ahead -7- Augustine Fou
  • 8. Background -8- Augustine Fou
  • 9. 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 -9- Augustine Fou
  • 10. Waste Due to Fraud • Display ad fraud is the easiest to commit and bad guys sell tons of “junk” inventory into ad exchanges. 30-75% • Video ad fraud is the new area of focus because video ad impressions are 10x more lucrative than display 50-80% • Search ad click fraud is harder to commit, because it involves several steps, and usually occurs on “search partner network” sites; but high spending categories like insurance and high CPC categories like pharma are favorite targets 20-40% - 10 - Augustine Fou
  • 11. How Impression (CPM) Ad Fraud Works - 11 - Augustine Fou
  • 12. Bad Guys Put Up Sites site = analyzecanceradvice .com site = missomoms.com 19 blocked ads on page - 12 - Augustine Fou
  • 13. Load Tons of Ads on Pages http://modernbab y.com/ http://interiorcom plex.com/ - 13 - Augustine Fou
  • 14. Use Bots to Load the Pages Source: Wired - 14 - Augustine Fou
  • 15. Sell Impressions on Exchanges “Modernbaby.com and Interiorcomplex.com Each of these sites peddles enormous traffic on the exchanges. For example, on a recent day Modern Baby was offering 19 million impressions via one exchange (quite the baby boom) and Interior Complex 30 million [ad impressions PER DAY] (the roaring housing market must be back).” Source: Adweek – Suspicious Web Domains Cost Online Ad Business $400m per Year By Mike Shields - 15 - Augustine Fou
  • 16. Impression (CPM) Ad Fraud Sizing - 16 - Augustine Fou
  • 17. Display Ad Impressions 30 – 75% fraudulent, not-in-view, adblocked IAB: FY 2012 Display Ad Spend = $7.7B • 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 - 17 - Augustine Fou
  • 18. Bot Traffic Estimates 24-29% confirmed bot Source: Solve Media Sept 2013 - 18 - Augustine Fou
  • 19. Traffic Firehose On/Off Source: Alexa Legit human traffic does not change rapidly; but bot traffic (firehose) can be rapidly turned off and directed to other sites. - 19 - Augustine Fou
  • 20. Where Fake Impressions Come From Ad exchanges are particularly prone to fraud because shady sites sell enormous quantities “ad impression inventory” into the exchanges for re-sale. Source: Integral Ad Science, via BusinessWeek Nov 26, 2013 - 20 - Augustine Fou
  • 21. Video Ad Impressions 50 - 77% fraudulent, autoplay, wasted, not-in-view Source: Vindico via Adweek, December 15, 2013 eMarketer: Digital Video Ad Spend est. $4B in 2013 • 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‟ - 21 - Augustine Fou
  • 22. Video Ad Views Exploded Dec 2013 35.2B video ads per month Source: comScore, Jan 2014 via MarketingCharts - 22 - Augustine Fou
  • 23. Digital Video Ad Spend Source: eMarketer, May 2013 Digital video ad spend continues to rise rapidly as more TV ad dollars shift to digital. Because video CPMs are so much more lucrative, it is more lucrative for bad guys too. - 23 - Augustine Fou
  • 24. Video Ads Are Lucrative Video ad CPMs are $8 - $12, which means they are more than 10X more lucrative than display or mobile ads. Source: Turn, Inc. October 2013 - 24 - Augustine Fou
  • 25. Impression (CPM) Fraud Display Ads Video Ads 500 billion 35 billion display ad impressions /mo video ad impressions /mo 29% 40% Source: Solve Media 2013 Source: Vindico, 2013 confirmed bot traffic ~$1 - $3.50 ~$8 - $12 cost per thousand cost per thousand $2-6 billion $1-2 billion wasted ad spend (annualized) - 25 - estimated fake views wasted ad spend (annualized) Augustine Fou
  • 26. How Search (CPC) Click Fraud Works - 26 - Augustine Fou
  • 27. Choose Expensive Keywords olay.com homemadesimple.com > 100,000 monthly searches avg position 1 – 10 sort by highest avg CPC “cosmetic face lift” “residential home cleaning” $10.84 CPC $9.95 CPC Source: iSpionage Nov 2013 - 27 - Augustine Fou
  • 28. Bots Type Search Term healthsiteproduc tionalways.com buy eye cream online - 28 - Augustine Fou
  • 29. Bots Click Search Ad Olay.com ad in #1 position - 29 - Augustine Fou
  • 30. Redirect Link(s) Known blackhat technique to hide real referrer and replace with faked referrer. SIX (6) redirects before ending on the landing page See how-to: http://www.blackhatworld.com/ blackhat-seo/cloaking-contentgenerators/36830-cloakingredirect-referer.html - 30 - Augustine Fou
  • 31. Pass Fake URL Trackers http://www.olay.com/skin -care-products/OlayProX?utm_source=msn&utm _medium=cpc&utm_cam paign=Olay_Search_Desk top_Category+Interest+Pr oduct.Phrase&utm_term= eye%20cream&utm_cont ent=TZsrSzFz_eye%20cr eam_p_2990456911 Click thru URL passing fake source - 31 - Augustine Fou
  • 32. Search (CPC) Click Fraud Sizing - 32 - Augustine Fou
  • 33. Search Ad Clicks 20 - 40% fraudulent, accidental, wasted Source: Adometry Click Fraud Report 1H 2013 IAB: FY 2012 Search Ad Spend = $16.8B • 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 - 33 - Augustine Fou
  • 34. Click Fraud by Qtr Source: ClickForensics 2011 - 34 - Augustine Fou
  • 35. Bot Clicks vs Humans Humans actually click on buttons and menu items (mouse moves and clicks) Bots don‟t bother disguising their click locations and don‟t show mouse traces. Source: Spider.io Feb 2013 - 35 - Augustine Fou
  • 36. Before and After BEFORE AFTER Top 2 “good guys” = 76% Top 5 “good guys” = 94% 18% of spend shifted from fraudulent websites to “top 5” good guys - 36 - Augustine Fou
  • 37. Biggest PPC Spenders Insurance est. Spending: - Statefarm.com - $46M /yr Geico.com - $44M Progressive.com - $34M Esurance.com - $28M Allstate.com - $25M USAA.com - $21M Many CPCs from $60 - $78 Retailers est. Spending: - 37 - Walmart.com - $48M /yr Sears.com - $18M annually Macys.com - $11M per year JCPenney.com - $9.6M CPCs range from $15 - $63 Augustine Fou
  • 38. More Examples of Bad Guy Sites - 38 - Augustine Fou
  • 39. Other Bad Guy Domains http://analyzecanceradvice .com http://analyzecancerhelp .com http://bestcanceropinion .com http://bestcancerproducts .com http://bestcancerresults .com http://besthealthopinion .com http://bettercanceradvice .com http://bettercancerhelp .com http://betterhealthopinion .com http://findcanceropinion .com http://findcancerresource .com http://findcancertopics .com http://findhealthopinion .com http://finestcanceradvice .com http://finestcancerhelp .com http://finestcancerresults .com http://getcancerproducts .com - 39 - 36,000+ more sites like these, designed to show search ads and self-click on them to siphon CPC revenue Augustine Fou
  • 40. Screen Shots of Sites Alexa [no data] Compete [no data] Quantcast [no data] - 40 - Augustine Fou
  • 41. Identical Template Sites http://picturesandbox.com/screengrab/grid.php - 41 - Augustine Fou
  • 42. Hundreds of Identical Sites Source: more screen captures http://picturesandbox.com/screengrab/grouped.php - 42 - Augustine Fou
  • 43. Affiliate Sales (CPA) Revenue Share Fraud - 43 - Augustine Fou
  • 44. Affiliate Sales Fraud http://www.businessinsider.com/ebay-the-fbi-shawn-hogan-and-brian-dunning-2013-4 - 44 - Augustine Fou
  • 45. Not Human-Readable Characteristics • Auto-generated by bots, stuffed with search keywords • To attract organic search traffic • Not human readable (low instance of natural phrases) • Stuffed with affiliate links and display ads - 45 - Augustine Fou
  • 46. Affiliate Links on Page http://www.amazon.com/exec/obidos/ASIN/B00BXF7I9M/panandscathed-20 http://www.tigerdirect.com/applications/SearchTools/itemdetails.asp?EdpNo=7674736&SRCCODE=LINKSHARE&cm_mmc_o=ddCjC1bELltzywCjCd2CjCdwwp&utm_source=Linkshare&utm_medium=Affiliate&utm_campaign=TnL5H PStwNw&AffiliateID=TnL5HPStwNw-Hc5zkpsnZO2pj1vg.2uttw - 46 - Augustine Fou
  • 47. Affiliate Rev Shares Camera rev shares: $25 - $78 Computer $15 - $28 Electronics $13 - $56 - 47 - Augustine Fou
  • 48. Other Forms of Digital Fraud - 48 - Augustine Fou
  • 49. Lead Fraud ~ 20-40% http://www.webranking.com/blog/lead-click-fraud-adsense-scamgoogle-adwords-advertisers - 49 - Augustine Fou
  • 50. Current Industry Initiatives - 50 - Augustine Fou
  • 51. Industry Players Nielsen/IAB IntegralAds (AdSafe) DoubleVerify Industry working group to define ad viewability. Verify ad placement against blacklist of known fraudulent websites. Ad placement, behavioral compliance, fraud detection Viewable rates (of display ads) ranged from 14% to 79%. PageFair Viewable rates (of display ads) ranged from 14% to 79%. Ad blocking detection Spider.io Solve Media Also detection of bot-like activity and other malware. Using CAPTCHAs to detect humans versus bots. Botnet Costing Display Advertisers $6 Million per month. Feb 2013 Global Bot Traffic on Pace to Waste Up to $9.5 billion in 2013 Ad Budgets. Sep 2013 - 51 - WhiteOps Realtime bot detection algorithms Augustine Fou
  • 52. Digital Ad Fraud Countermeasures - 52 - Augustine Fou
  • 53. Blacklisting Sites Value Exclude sites from serving your ads - 53 - Caveat For every site excluded, bad guys put up more (because they don’t have to play by the rules). Augustine Fou
  • 54. Enforcing Viewability Value Caveat Only pay for ads which are viewable (i.e. above the-fold) Bad guys have already defeated “viewability” by stuffing ads in hidden layers, all above-the-fold. Source: Spider.io May 2, 2013 - 54 - Augustine Fou
  • 55. Detecting Bot Traffic Value Caveat Good guys use algorithms to detect unusual behaviors indicative of bots (rather than humans) It‟s an arms race between good and bad; bots are more sophisticated and can fake mouse movements and keep cookies. Source: Spider.io March 2013 - 55 - Augustine Fou
  • 56. Using CAPTCHAs Value Caveat Captchas deter bots from filling in forms and stealing content and cookies. Some bots can now solve some captchas, most captchas don‟t protect content pages. Source: Solve Media Dec 31 2013 - 56 - “Startup called Vicarious automatically solves CAPTCHAs.” Oct 2013 http://bit.ly/1bFo9lZ Augustine Fou
  • 57. What Advertisers Can/Should Do - 57 - Augustine Fou
  • 58. Areas of Optimization Percent of Ad Spend Impacted 30% 40% 30% - 58 - targeting improving optimization delivery viewability bots /not seen by humans waste reduction Augustine Fou
  • 59. Low Hanging Fruit The most immediate, direct impact on ROI comes from reducing waste 25% On-Target Delivery (Nielsen) 54% Not In View (comScore) 23% Ad Blocked (PageFair) 24 – 29% confirmed bot (Solve Media) - 59 - Augustine Fou
  • 60. Digital Ad Forensics Process Preliminary Scan Sizing of ad fraud Forensic Analysis Maintenance • Technology Tools • Statistical analysis • Budget shifts • Further optimization Implementation FREE $$$ Preliminary analysis of paid campaigns and analytics to determine magnitude of the ad fraud impacting client. Creating recommended list of changes, including list of sites to exclude in each ad channel. - 60 - $ Subscribe to triangulated, cross-industry database of “ad fraud offenders” to continuously update blacklists and whitelists. Augustine Fou
  • 61. Related Articles Digital Ad Fraud Briefing By: Augustine Fou December 2013 Fake YouTube Videos By: Augustine Fou, December 2013 Ad Fraud Fighting Techniques By: Augustine Fou October 2013 Fake Linkedin Profiles By: Augustine Fou, December 2013 How Display Fraud Works By: Augustine Fou, May 2013 Fake Facebook Profiles By: Augustine Fou, Dec 2013 How Click Fraud Works By: Augustine Fou, November 2013 Fake Twitter Accounts By: Augustine Fou, August 2013 The Magnitude of Digital Ad Fraud By: Augustine Fou, November 2013 An Ecosystem of Digital Ad Fraud By: Augustine Fou, October 2013 - 61 - Augustine Fou
  • 62. Need more help for your search marketing?  Develop the right business goals for your program  Learn what your customers need from search  Understand what your customers are looking for  Create content that satisfies your customers’ needs  Understand how search engines judge the quality of your content  Implement a search marketing program to build your bottom line  Bid on paid search keywords intelligently and correctly to ensure the right return on investment  Improve your return on investment with proper measures and metrics JumpStart Workshop  Plan for future changes in the search engines and in your marketing  Sell that plan within your organization - 62 - 62 © 2013 Mike Moran Group LLC www.biznology.com/training/ © 2014 Mike Moran Group LLC
  • 63. Don’t stop now! Don’t forget our sponsors March 11, 2014 11:00 to 11:30 ET Monique de Maio Jump-start Your Content Marketing through Better Market Segmentation Sign up now at: http://bit.ly/1gn3APQ For more information: www.biznology.com - 63 - 63 © 2013 Mike Moran Group LLC © 2014 Mike Moran Group LLC