Types of Digital Ad Fraud Researched by Augustine Fou 2014


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There are many forms of digital ad fraud. Some are easy to commit, others are harder to commit. But bad guys skim value from every part of the value chain.

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Types of Digital Ad Fraud Researched by Augustine Fou 2014

  1. 1. Types of Digital Ad Fraud Dr. Augustine Fou http://linkd.in/augustinefou June 2014 - 1 - Augustine Fou
  2. 2. Display Ad Fraud Normal display ads Fraudulent display ads • Loaded on sites that no human users go to • Not viewable, not-in-view • More than 5 ads on a page • Ad impressions generated by bot (not human) - 2 - Augustine Fou
  3. 3. Ad Injection Source: http://adage.com/article/digital/bi g-ad-injection-scheme-hits-target- youtube-walmart/293088/ Target ad on top of Walmart.com “Those behind this operation go by the name 215 Apps, sometimes known as Engaging Apps. They've built a network of browser extensions that promise consumers some sort of benefit, such as the ability to download streaming videos, but inject ads into sites across the web.” - 3 - Augustine Fou
  4. 4. Search Ad Fraud fake site that serves search ads buy eye cream online (expensive CPC keyword) search ad served, fake click Olay.com ad in #1 position redirect through to desination page Destination page fake source declared - 4 - Augustine Fou
  5. 5. Video Ad Fraud Normal video ads (pre-roll) Fraudulent video ads • Not skippable • Auto-played • Played in-banner • Not viewable • Video ad impressions generated by bot (not human) - 5 - Augustine Fou
  6. 6. History Injection Source: http://searchengineland.com/g oogle-to-take-action-against-fake-search- results-injected-into-browser-history- 166770 “The technique uses a method of detecting a click on the browser’s back button. When clicked, a user is not sent back to the page they came from, i.e. the search results, but rather a page that looks like search results.” - 6 - Augustine Fou
  7. 7. Lead Fraud Fake leads • Previously filled out by hand • Now, fully automated with bots using databases of real postal addresses, etc. (that trick verification engines) - 7 - Augustine Fou
  8. 8. Affiliate Sales Fraud “eBay paid Hogan a staggering $28 million in affiliate marketing sales commissions over the years, according to court papers.” Source: http://www.businessinsider.com/eba y-the-fbi-shawn-hogan-and-brian-dunning- 2013-4#ixzz34WHjnefM Source: http://articles.latimes.com/2013/apr/19/bus iness/la-fi-mo-cookie-stuffing-ebay- 20130419 “Laguna Niguel man pleads guilty in 'cookie stuffing' scam against Ebay. The online auctioneer paid Dunning’s company about $5.2 million in 2006 and 2007, the U.S. Attorney said.” Keywords: cookie stuffing - 8 - Augustine Fou
  9. 9. Why Now? - 9 - Augustine Fou
  10. 10. “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 - 10 - Augustine Fou
  11. 11. As more digital ads are placed entirely programmatically, the opportunity for fraud continues to increase. The Opportunity - 11 - Augustine Fou
  12. 12. 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 - Augustine Fou
  13. 13. The Size of the Fraud Problem - 13 - Augustine Fou
  14. 14. Main Types of Digital Ads Impressions (CPM/CPV) Clicks (CPC) Leads (CPL) Sales (CPA) • Display ads • Video ads • Social display • Mobile display • Search ads • Mobile search • Affiliate revenue share • Completed lead forms sold on cost-per- lead basis - 14 - Augustine Fou
  15. 15. Digital Ad Spend (IAB FY 2013) CPM Performance Impressions (CPM/CPV) Clicks (CPC) Leads (CPL) Sales (CPA) Search 43% $18.5B Display 19% $8.2B Video 7% $3.0B $6.5B NOTE: figures from IAB FY 2013 ($43B annual ad spend) Lead Gen 4% $1.7B 11% Other $4.8B $2.8B $3.7B Mobile 15% • classifieds • sponsorship • rich media • email Source: IAB, FY 2013 Internet Advertising Report, April 2014 $36.2B - 15 - Augustine Fou
  16. 16. 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. - 16 - Augustine Fou
  17. 17. Digital Ad Fraud Estimates Impressions (CPM/CPV) Clicks (CPC) Search $18.5B Display $8.2B Video $3.0B $2.8B $3.7B Mobile $36.2B Ad Spend Avg Fraud Rate Dollars Display 50% $4B Video 60% $2B Mobile 40% $2B Search 30% $6B TOTALS 39% $14B (U.S. digital ad spend only) Multiple sources - 17 - Augustine Fou
  18. 18. 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 - 18 - Augustine Fou @acfou