Sizing Digital Ad Fraud Investigation by Augustine Fou


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Digital Ad Fraud is bigger than most people think... here are some collected estimates from various industry sources and researchers.

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Sizing Digital Ad Fraud Investigation by Augustine Fou

  1. 1. Augustine Fou- 1 - Buckets of Ad Fraud Impressions (CPM fraud) Botnets generate fake pageviews which produce ad impression “inventory” that is sold into ad exchanges. Clicks (CPC fraud) Leads (CPL fraud) Sales (CPA fraud) Bots type search queries to bring up search ads and then click on the ads to earn share of CPC. Bot or low wage workers fill in lead forms with real addresses and get paid bounty per lead. Fake sites set up to do cookie stuffing or trick users to click on affiliate links to earn rev share.
  2. 2. Augustine Fou- 2 - 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 – 60% fraudulent, wasted, not-in-view IAB: FY 2012 Display Ad Spend = $7.7B
  3. 3. Augustine Fou- 3 - 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
  4. 4. Augustine Fou- 4 - 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
  5. 5. Augustine Fou- 5 - Affiliate Sales Fraud
  6. 6. Augustine Fou- 6 - Lead Fraud ~ 20-40% google-adwords-advertisers
  7. 7. Augustine Fou- 7 - Background
  8. 8. Augustine Fou- 8 - “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
  9. 9. 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
  10. 10. Augustine Fou- 10 - The Opportunity As more digital ads are placed entirely programmatically, the opportunity for fraud continues to increase.
  11. 11. Augustine Fou- 11 - 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
  12. 12. Augustine Fou- 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 @acfou ClickZ Articles: Slideshares: LinkedIn:
  13. 13. Augustine Fou- 13 - 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- 13 - 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