Digital Ad Fraud Briefing by Augustine Fou 1H 2014

  • 708 views
Uploaded on

Ad fraud is running rampant in digital advertising. To clean it up, all the participants in the value chain need to work together to fight the bad guys and the sophisticated technologies and …

Ad fraud is running rampant in digital advertising. To clean it up, all the participants in the value chain need to work together to fight the bad guys and the sophisticated technologies and techniques they are using.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
  • Wow! I wondered why I was paying so much for Facebook ads and the 'click-through' numbers they were claiming didn't match up anywhere near what our Wordpress site statistics was counting as legitimate users, and of those our conversion rate is dismal (and mind you, we are giving away free stuff with no strings attached, so that is bizarre). I wrote to Facebook complaining, but they gave me a blah-blah-blah, but it seems if Wordpress is able to differentiate between at least the simpler bots and real human beings, then a gigantic advertiser who charges us per clicks should be able to do so as well. My husband is an EE and said if java-script is disabled, it's usually a bot, and then he showed me how many steps it takes to disable it and then use it if a human being wants to use it (what a pain in the neck!) so it seems the advertising giants such as Adwords and Facebook Ads have a vested interest in encouraging these bots to keep doing this.

    I may be no computer expert (and half of what I just wrote you're probably laughing at as an uneducated consumer), but one thing I -do- have expertise with is the law. Have you started encouraging people to file a complaint with the Federal Trade Commission? They have truth-in-advertising laws and for Adwords and Facebook Ads and other ad sites to know this is a problem and then CHARGE MONEY for it is a crime.

    Here is the place people can file a complaint with the Federal Trade Commission if they noticed these glaring discrepancies on how much they are being billed for ads versus 'page loads.' It takes thousands of consumer complaints to get the FTC off their butt to investigate, but once they do, I can guarantee Adwords and FB-ads and the other sites will suddenly become more interested in solving this problem.

    http://www.ftc.gov/faq/consumer-protection/submit-consumer-complaint-ftc

    Also ... all 50 states have truth-in-advertising and consumer protection laws. If a business feels they got ripped off by ads, they can file a complaint with their state attorney general's office. Once again, it takes hundreds of complaints for the AG's to investigate, but once they do, some states (especially New York) will aggressively go after fraud such as this.

    New York AG: http://www.ag.ny.gov/consumer-frauds/Filing-a-Consumer-Complaint

    Massachusetts: http://www.mass.gov/ago/consumer-resources/filing-a-complaint-with-the-attorney-generals.html

    California: http://oag.ca.gov/contact/consumer-complaint-against-business-or-company

    Washington State: http://www.atg.wa.gov/fileacomplaint.aspx#.U4SPinaiWWM

    You get the idea. Since you seem to be an expert and leader in combating this problem, perhaps you might start advising businesses who get ripped off to take the next step and start complaining to the proper legal authorities?
    Are you sure you want to
    Your message goes here
No Downloads

Views

Total Views
708
On Slideshare
0
From Embeds
0
Number of Embeds
3

Actions

Shares
Downloads
0
Comments
1
Likes
2

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Augustine Fou- 1 - Dr. Augustine Fou http://linkd.in/augustinefou May 2014 Digital Ad Fraud Briefing 2014
  • 2. Augustine Fou- 2 - 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
  • 3. Augustine Fou- 3 - Background
  • 4. Augustine Fou- 4 - “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 LinkedIn Post: The Three Reasons Ad Fraud Seems So Overwhelmingly Large Now
  • 5. Augustine Fou- 5 - 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
  • 6. Augustine Fou- 6 - As more digital ads are placed entirely programmatically, the opportunity for fraud continues to increase. The Opportunity
  • 7. Augustine Fou- 7 - 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
  • 8. Augustine Fou- 8 - 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
  • 9. Augustine Fou- 9 - 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, see Appendix
  • 10. Augustine Fou- 10 - 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% $2-6B $1-2B $4-8B (U.S. Only) 30-50% $2-3B 50% 60% 30% 40% Range DollarsAverage
  • 11. Augustine Fou- 11 - How Impression (CPM) Ad Fraud Works
  • 12. Augustine Fou- 12 - 19 blocked ads on page Bad Guys Put Up Sites site = analyzecanceradvice .com site = missomoms.com
  • 13. Augustine Fou- 13 - Load Tons of Ads on Pages http://interiorcom plex.com/ http://modernbab y.com/
  • 14. Augustine Fou- 14 - Load Ads in Hidden iFrames Augustine Fou- 14 - Source: Spider.io May 2, 2013 Ads are hidden in up to 72 layers Entire web pages are loaded into ad iframes to boost impressions Multiple redirects and auto page refreshes
  • 15. Augustine Fou- 15 - Fake their “Viewability” Augustine Fou- 15 - Source: Spider.io May 2, 2013 Ads are above the fold of the page But their pixel opacity can be set to zero (invisible) Entire web pages stuffed into ad iframe; ads counted as viewable
  • 16. Augustine Fou- 16 - Use Bots to Load the Pages Source: Wired Source: Google Digital Attack Map
  • 17. Augustine Fou- 17 - 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
  • 18. Augustine Fou- 18 - Where Fake Impressions Come From Source: Integral Ad Science, via BusinessWeek Nov 26, 2013 Ad exchanges are particularly prone to fraud because shady sites sell enormous quantities “ad impression inventory” into the exchanges for re-sale.
  • 19. Augustine Fou- 19 - Impression (CPM) Ad Fraud Sizing
  • 20. Augustine Fou- 20 - 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 – 75% fraudulent, not-in-view, adblocked IAB: FY 2012 Display Ad Spend = $7.7B
  • 21. Augustine Fou- 21 - Nearly 62% bot39% human 61% bot traffic Bot Traffic Estimates Source: Incapsula 2013 Source: Solve Media Dec 31 2013 51% suspicious 22-29% confirmed bot
  • 22. Augustine Fou- 22 - Viewability of Display Ads Source: Integral Ad Science Sept 2013 via MarketingCharts Publisher direct is best and lowest risk
  • 23. Augustine Fou- 23 - 23% of Users Use Adblockers Source: PageFair, August 2013 Average Adblocking Rate 22.7%
  • 24. Augustine Fou- 24 - 100 million impressions - 36% bogus impressions Source: WSJ One-Third of Traffic is Bogus 64 million impressions - 54% not-in-view Source: comScore June 2013 29 million impressions - 23% ad-blocked by user Source: PageFair, August 2013 22 million impressions $0.50 CPM productive 4.5x higher effective cost
  • 25. Augustine Fou- 25 - 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
  • 26. Augustine Fou- 26 - Video Ad Views Exploded Source: comScore, Jan 2014 via MarketingCharts Dec 2013 35.2B video ads per month
  • 27. Augustine Fou- 27 - 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.
  • 28. Augustine Fou- 28 - 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
  • 29. Augustine Fou- 29 - A new study [download page] from VideoHub indicates that during the first quarter, average viewability for online video ads in the US was 83%, although rates varied widely among properties, from 43% on the low end to 94% on the high end. Broadcast TV sites fared best (89% on average) among property categories, with networks and exchanges (73%) bringing up the rear. Video Ad Viewability Source: VideoHub August 2013 via MarketingCharts
  • 30. Augustine Fou- 30 - 500 billion display ad impressions /mo Impression (CPM) Fraud 29% confirmed bot traffic ~$1 - $3.50 cost per thousand $2-6 billion wasted ad spend (annualized) Display Ads 35 billion video ad impressions /mo 40% estimated fraudulent views ~$8 - $12 cost per thousand $1-2 billion wasted ad spend (annualized) Video Ads Source: Vindico, 2013Source: Solve Media 2013
  • 31. Augustine Fou- 31 - How Search (CPC) Click Fraud Works
  • 32. Augustine Fou- 32 - Choose Expensive Keywords homemadesimple.comolay.com “cosmetic face lift” $10.84 CPC “residential home cleaning” $9.95 CPC > 100,000 monthly searches avg position 1 – 10 sort by highest avg CPC Source: iSpionage Nov 2013
  • 33. Augustine Fou- 33 - 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 Retailers est. Spending: - Walmart.com - $48M /yr - Sears.com - $18M annually - Macys.com - $11M per year - JCPenney.com - $9.6M CPCs range from $15 - $63 Many CPCs from $60 - $78
  • 34. Augustine Fou- 34 - Bots Type Search Term buy eye cream online healthsiteproduc tionalways.com
  • 35. Augustine Fou- 35 - Bots Click Search Ad Olay.com ad in #1 position
  • 36. Augustine Fou- 36 - 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-content- generators/36830-cloaking- redirect-referer.html
  • 37. Augustine Fou- 37 - Pass Fake URL Trackers Click thru URL passing fake source http://www.olay.com/skin- care-products/OlayPro- X?utm_source=msn&utm _medium=cpc&utm_camp aign=Olay_Search_Deskto p_Category+Interest+Prod uct.Phrase&utm_term=eye %20cream&utm_content= TZsrSzFz_eye%20cream_ p_2990456911
  • 38. Augustine Fou- 38 - Search (CPC) Click Fraud Sizing
  • 39. Augustine Fou- 39 - 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
  • 40. Augustine Fou- 40 - Click Fraud by Qtr Source: ClickForensics 2011
  • 41. Augustine Fou- 41 - 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
  • 42. Augustine Fou- 42 - What Bots on Page Look Like Demo: http://actupon.tv/webspy/
  • 43. Augustine Fou- 43 - Before and After 18% of spend shifted from fraudulent websites to “top 5” good guys BEFORE Top 2 “good guys” = 76% AFTER Top 5 “good guys” = 94%
  • 44. Augustine Fou- 44 - More Examples of Bad Guy Sites
  • 45. Augustine Fou- 45 - 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 36,000+ more sites like these, designed to show search ads and self-click on them to siphon CPC revenue
  • 46. Augustine Fou- 46 - Screen Shots of Sites Alexa [no data] Compete [no data] Quantcast [no data]
  • 47. Augustine Fou- 47 - Identical Template Sites http://picturesandbox.com/screengrab/grid.php
  • 48. Augustine Fou- 48 - Hundreds of Identical Sites Source: more screen captures http://picturesandbox.com/screengrab/grouped.php
  • 49. Augustine Fou- 49 - Affiliate Sales (CPA) Revenue Share Fraud
  • 50. Augustine Fou- 50 - Affiliate Sales Fraud http://www.businessinsider.com/ebay-the-fbi-shawn-hogan-and-brian-dunning-2013-4
  • 51. Augustine Fou- 51 - Algo-generated Pages Source: http://www.highdefdigest.com/tags/s how/Seiki_Digital Characteristics: • typically blog platform • keywords optimized for each post to attract organic traffic • content plaigiarized from press releases and other sites • stuffed with display ads, affiliate links or link bait
  • 52. Augustine Fou- 52 - 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
  • 53. Augustine Fou- 53 - Affiliate Links on Page http://www.amazon.com/exec/obidos/ASIN/B00BXF7I9M/panandscathed-20 http://www.tigerdirect.com/applications/SearchTools/item- details.asp?EdpNo=7674736&SRCCODE=LINKSHARE&cm_mmc_o=- ddCjC1bELltzywCjC- d2CjCdwwp&utm_source=Linkshare&utm_medium=Affiliate&utm_campaign=TnL5H PStwNw&AffiliateID=TnL5HPStwNw-Hc5zkpsnZO2pj1vg.2uttw
  • 54. Augustine Fou- 54 - Other Sites Using Same Affiliate ID Source: http://reverseinternet.com/amazon- affiliate/panandscathed-20 Source: http://sameid.net/amazon-aff/panandscathed-20/
  • 55. Augustine Fou- 55 - Affiliate Rev Shares Camera rev shares: $25 - $78 Computer $15 - $28 Electronics $13 - $56
  • 56. Augustine Fou- 56 - Prime Targets for Fraud Source: Ben Edelman Since 2004, I've been tracking and reporting all manner of rogue affiliates -- using spyware and adware to cover competitors' sites; using trickier spyware and adware to claim commission on merchants' organic traffic; typosquatting; stuffing cookies through invisible IFRAME's and IMG's, banner ads, and even hacked forum sites; and the list goes on.
  • 57. Augustine Fou- 57 - Other Forms of Digital Fraud
  • 58. Augustine Fou- 58 - Lead Fraud ~ 20-40% http://www.webranking.com/blog/lead-click-fraud-adsense-scam- google-adwords-advertisers
  • 59. Augustine Fou- 59 - Current Industry Initiatives
  • 60. Augustine Fou- 60 - Industry Players Solve Media Using CAPTCHAs to detect humans versus bots. Global Bot Traffic on Pace to Waste Up to $9.5 billion in 2013 Ad Budgets. Sep 2013 Spider.io Nielsen/IAB Algo detection of bot-like activity and other malware. Botnet Costing Display Advertisers $6 Million per month. Feb 2013 Industry working group to define ad viewability. Viewable rates (of display ads) ranged from 14% to 79%. IntegralAds (AdSafe) Verify ad placement against blacklist of known fraudulent websites. Viewable rates (of display ads) ranged from 14% to 79%. DoubleVerify Ad placement, behavioral compliance, fraud detection PageFair Ad blocking detection WhiteOps Realtime bot detection algorithms
  • 61. Augustine Fou- 61 - Digital Ad Fraud Countermeasures
  • 62. Augustine Fou- 62 - Blacklisting Sites Value Exclude sites from serving your ads Caveat For every site excluded, bad guys put up more (because they don’t have to play by the rules).
  • 63. Augustine Fou- 63 - Enforcing Viewability Source: Spider.io May 2, 2013 Value Only pay for ads which are viewable (i.e. above the-fold) Caveat Bad guys have already defeated “viewability” by stuffing ads in hidden layers, all above-the-fold.
  • 64. Augustine Fou- 64 - Detecting Bot Traffic Source: Spider.io March 2013 Value Good guys use algorithms to detect unusual behaviors indicative of bots (rather than humans) Caveat It’s an arms race between good and bad; bots are more sophisticated and can fake mouse movements and keep cookies.
  • 65. Augustine Fou- 65 - Using CAPTCHAs “Startup called Vicarious automatically solves CAPTCHAs.” Oct 2013 http://bit.ly/1bFo9lZ Value Captchas deter bots from filling in forms and stealing content and cookies. Caveat Some bots can now solve some captchas, most captchas don’t protect content pages. Source: Solve Media Dec 31 2013
  • 66. Augustine Fou- 66 - “The above countermeasures are all good, and advertisers should continue using them. But they are not enough. If the good guys fight the fight individually, there is little chance they can overcome the entire ecosystem of the bad guys. The good guys need to band together into their own ecosystem and put the bad guys on a ‘digital ad fraud equivalent to the National Sex Offenders Registry’.” -- Dr. Augustine Fou
  • 67. Augustine Fou- 67 - Assumptions No Longer Valid 1. bots can’t fake mouse movements and webpage scrolling - they can easily now 2. captchas can only be solved by humans - bots can solve them too now 3. it requires malware infected computers to commit ad fraud - bad guys can set up hundreds of thousands of server instances to simulate users without having to infect any computers with malware 4. malware can be caught by virus software when installed - some malware does not need to be installed, they are carried along with the code of a toolbar, plugin, extension, etc. or can be asynchronously introduced later via updates (especially when user has permitted auto-updates)
  • 68. Augustine Fou- 68 - Assumptions No Longer Valid 5. if a correct bid record is passed it should be a human user - bots can easily send fake information to simulate being a user (e.g. cookies, referrer, search query, characteristics of the computer and browser, etc.) 6. fraudulent traffic is a small portion of legitimate human traffic -- bot traffic is far larger than actual human traffic. This comes from both “legitimate” sources like Google crawlers or “site up status checkers” and “illicit” sources like server-side scripts, browser side scripts, browser extensions and plugins, and other malware.
  • 69. Augustine Fou- 69 - Techical Forensics
  • 70. Augustine Fou- 70 - 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
  • 71. Augustine Fou- 71 - Related Articles Fake YouTube Videos By: Augustine Fou, December 2013 Fake Linkedin Profiles By: Augustine Fou, December 2013 Fake Facebook Profiles By: Augustine Fou, Dec 2013 Fake Twitter Accounts By: Augustine Fou, August 2013 An Ecosystem of Digital Ad Fraud By: Augustine Fou, October 2013 Augustine Fou- 71 - Digital Ad Fraud Briefing By: Augustine Fou December 2013 Ad Fraud Fighting Techniques By: Augustine Fou October 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
  • 72. Augustine Fou- 72 - Low Hanging Fruit The most immediate, direct impact on ROI comes from reducing waste 23% Ad Blocked (wasn’t shown) (PageFair) 54% Not In View (not seen) (comScore) 24 – 29% confirmed bot (Solve Media) 25% On-Target Delivery (Nielsen) 82% Ignored (not relevant) (Harris Interactive)
  • 73. Augustine Fou- 73 - Digital Ad Forensics Process Sizing of ad fraud Forensic AnalysisPreliminary Scan Implementation Augustine Fou- 73 - • 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
  • 74. Augustine Fou- 74 - Fraud Fighting Techniques • Blacklisting fake websites by URL/domain • Whitelisting legit publisher sites by domain • Detecting bot traffic and known botnet addresses • Scanning sites for malware (Google hosts list) • Bot flag on bid records • Real time rejection of fraudulent ad impressions • Revised traffic numbers based on audience overlap