Estimating
Digital Ad Fraud
Dr. Augustine Fou
http://linkd.in/augustinefou
December 2013
-1-

Augustine Fou
Executive Summary
• Display ad fraud is the easiest to commit and bad guys
sell tons of “junk” inventory into ad exchanges...
Display Ad Impressions

30 – 60%
fraudulent, wasted, not-in-view
IAB: FY 2012 Display Ad Spend = $7.7B

• By far, the easi...
Bot Traffic Estimates

Source: Solve Media Sept 2013
-4-

Augustine Fou
Where Click Fraud Comes From
Ad exchanges are particularly prone to fraud because shady sites sell enormous
quantities “ad...
Video Ad Impressions

50 - 77%
fraudulent, autoplay, wasted, not-in-view
Source: Vindico via Adweek, December 15, 2013
eMa...
Video Ads Are Lucrative
Video ad CPMs
are $8 - $12,
which means
they are more
than 10X more
lucrative than
display or
mobi...
Search Ad Clicks

20 - 40%
fraudulent, accidental, wasted
Source: Adometry Click Fraud Report 1H 2013
IAB: FY 2012 Search ...
Click Fraud by Qtr

Source: ClickForensics 2011
-9-

Augustine Fou
Biggest PPC Spenders
Insurance est. Spending:
-

Statefarm.com - $46M /yr
Geico.com - $44M
Progressive.com - $34M
Esurance...
Related Articles
Bad Guys Happily Rob Display Advertisers
By: Augustine Fou, July 23, 2012
Everything Fake (Display Ad Fra...
Dr. Augustine Fou – Digital Consigliere
“I advise clients on optimizing
advertising across all channels. One
main area of ...
APPENDIX
- 13 -

Augustine Fou
Assumptions No Longer Valid
1.

bots can‟t fake mouse movements and webpage scrolling - they can easily now

2.

captchas ...
IAB Full Year 2012

Source: IAB 2012 Annual Report

- 15 -

Augustine Fou
Digital Video Ad Spend

Source: eMarketer, May 2013
- 16 -

Augustine Fou
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Estimates of Digital Ad Fraud by Augustine Fou Advanced Technical Forensics

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bad guys deploy their resources efficiently - to capture value from the easiest sources first, then they target the most lucrative sources, etc.

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Estimates of Digital Ad Fraud by Augustine Fou Advanced Technical Forensics

  1. 1. Estimating Digital Ad Fraud Dr. Augustine Fou http://linkd.in/augustinefou December 2013 -1- Augustine Fou
  2. 2. Executive Summary • Display ad fraud is the easiest to commit and bad guys sell tons of “junk” inventory into ad exchanges; ad buyers are goaled on number of impressions so that perpetuates the problem. 30-60% • Video ad impressions are 10x more lucrative than display, so bad guys are deploying their bots and networks to creating video ad inventory; again ad buyers are goaled on “tonnage” of impressions and therefore perpetuates the problem. 50-80% • Search ad click fraud is harder to commit and usually occurs on “search partner network” sites; but high spending categories like insurance and high CPC categories like pharma are favorite targets of the bad guys who can earn $78 per click. 20-40% -2- Augustine Fou
  3. 3. Display Ad Impressions 30 – 60% fraudulent, wasted, not-in-view 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 -3- Augustine Fou
  4. 4. Bot Traffic Estimates Source: Solve Media Sept 2013 -4- Augustine Fou
  5. 5. Where Click Fraud Comes 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 -5- Augustine Fou
  6. 6. 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‟ -6- Augustine Fou
  7. 7. 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 -7- Augustine Fou
  8. 8. 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 -8- Augustine Fou
  9. 9. Click Fraud by Qtr Source: ClickForensics 2011 -9- Augustine Fou
  10. 10. 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: - 10 - Walmart.com - $48M /yr Sears.com - $18M annually Macys.com - $11M per year JCPenney.com - $9.6M CPCs range from $15 - $63 Augustine Fou
  11. 11. Related Articles Bad Guys Happily Rob Display Advertisers By: Augustine Fou, July 23, 2012 Everything Fake (Display Ad Fraud, Search Click Fraud) By: Augustine Fou, April 2013 Blacklisting vs Whitelisting By: Augustine Fou, October 2013 What Suspect Site Traffic and Gray-hat Techniques Look Like By: Augustine Fou, October 2013 Video Ad Fraud Investigation, Part 1 By: Augustine Fou, October 2013 - 11 - Augustine Fou
  12. 12. 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 ClickZ Articles: http://bit.ly/augustine-fou-clickz Slideshares: http://bit.ly/augustine-fou-slideshares LinkedIn: http://linkd.in/augustinefou - 12 - @acfou Augustine Fou
  13. 13. APPENDIX - 13 - Augustine Fou
  14. 14. 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) 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. - 14 - Augustine Fou
  15. 15. IAB Full Year 2012 Source: IAB 2012 Annual Report - 15 - Augustine Fou
  16. 16. Digital Video Ad Spend Source: eMarketer, May 2013 - 16 - Augustine Fou

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