Fraud is diverting a large portion of digital ad spending to criminal groups. There are hundreds or thousands of times more fake websites and apps than legitimate ones, and these fake sites sell ad space at low prices, diverting billions annually from publishers and advertisers. New botnets and malware strains have emerged that can generate billions of fraudulent ad impressions per minute by simulating human behavior. As a result, as much as half of all digital ad spending may be lost to fraud.
20240507 QFM013 Machine Intelligence Reading List April 2024.pdf
At-Scale Ad Fraud Absorbs Most Digital Dollars
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Fraud diverts ad spend to fraudsters
Good Publishers “sites that carry ads”
• No content
• Few humans
• Low CPMS
$40 Search Spend Display Spend $40
$21$30
$3
Google Search FB+Google Display
$29
(outside Google/Facebook)
$83 Digital Spend Source: eMarketer March 2017
47%
programmatic
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$29
(outside Google/Facebook)
There’s 160X more “sites with ads”
Good Publishers “sites with ads”
Source: Verisign, Q4 2016
329M
domains
est. 164 million
“sites that carry ads”
“sites you’ve heard of”
WSJ
ESPN
NYTimes
Economist
Reuters
Elle
3%
no ads
carry ads
160X more
47%
programmatic
est. 1 million
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700X more
There’s 700X more fake apps
7M
apps
Source: Statista, March 2017
6.99 million
96% “apps that carry ads”
10,000
“apps you’ve heard of”
Facebook
Spotify
Pandora
Zynga
Pokemon
YouTube
$29
(outside Google/Facebook)
47%
programmatic
Facebook, 2015
Users use 8 – 15 apps on their
phones.
Spotify, 2016
People have 25 apps on their
phones, use 5-8 regularly
Forrester Research, May 2017
Humans “use 9 apps per day, 30
per month”
4. June 2017 / Page 3marketing.scienceconsulting group, inc.
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Examples of fake sites, fake apps
Fake Sites (10s of millions)
Source: Sadbottrue.com
Fake Apps (millions)
… they can sell ad
“inventory” at low prices
5. June 2017 / Page 4marketing.scienceconsulting group, inc.
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Just because you can’t measure it
100% fraud
> 50% fraud
… doesn’t mean it’s not there.
7. June 2017 / Page 6marketing.scienceconsulting group, inc.
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The most profitable criminal activity
1000% return
11% returns1% interest
digital ad fraud
stock marketbank interest
“buy traffic for $1, sell
ads for $10 CPMs”
8. June 2017 / Page 7marketing.scienceconsulting group, inc.
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(2015) Display ads …
Increased CPM prices
by 800%
Decreased impression
volume by 92%
Source: http://adexchanger.com/ad-exchange-news/6-months-after-fraud-cleanup-appnexus-shares-effect-on-its-exchange/
260 billion
20 billion
> $1.60
< 20 cents
9. June 2017 / Page 8marketing.scienceconsulting group, inc.
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(2016) Video ads …
Source: Dec 2016 WhiteOps Discloses Methbot Research
“Methbot, steals $2 billion annualized;
and it avoided detection for years.”
1. Targeted video ad inventory
$13 average CPM, 10X
higher than display ads
2. Disguised as good publishers
Pretending to be good
publishers to cover tracks
3. Simulated human actions
Actively faked clicks, mouse
movements, page scrolling
4. Obfuscated data center origins
Data center bots pretended to
be from residential IP addresses
1 botnet eats 15% of video inventory
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(2017) Mobile ads …Source: June 2017, Tune
average 20% fraud
100% fraud
50% fraud24 billion clicks on
700 mobile networks
11. June 2017 / Page 10marketing.scienceconsulting group, inc.
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Ad fraud on such a massive scale…
May 26 Forbes “Judy Malware”
• 40 bad apps to load ads
• 36 million fake devices to load
bad apps
• e.g. 30 ads per device /minute
• 30 ads per minute = 1 billion
fraud impressions per minute
June 1 Checkpoint “Fireball”
• 250 million infected computers
• primary use = traffic for ad
fraud
• 4 ads /pageview (2s load time)
• fraudulent impressions at the
rate of 30 billion per minute
12. June 2017 / Page 11marketing.scienceconsulting group, inc.
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Dollars siphoned OUT by bad guysAdvertisers
Publishers
are left with 30%
Bad Guys
siphon dollars OUT
of the ecosystem
30% ($6B)
60% ($11B)
Ad Blocking
users use ad blocking to
protect themselves
10% ($2B)
Ad Tech
“plumbing” and verification
Source: The Guardian, Oct 2016
$5B to Google Display
$16B to Facebook Display
Display Spend$40B
DisplaySpend
13. June 2017 / Page 12marketing.scienceconsulting group, inc.
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Dr. Augustine Fou – Independent Ad Fraud Researcher
2013
2014
Follow me on LinkedIn (click) and on Twitter
@acfou (click)
Further reading:
http://www.slideshare.net/augustinefou/presentations
https://www.linkedin.com/today/author/augustinefou
2016
2015