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

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. 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. 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. 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. Augustine Fou- 5 -
Affiliate Sales Fraud
http://www.businessinsider.com/ebay-the-fbi-shawn-hogan-and-brian-dunning-2013-4

6. Augustine Fou- 6 -
Lead Fraud ~ 20-40%
http://www.webranking.com/blog/lead-click-fraud-adsense-scam-
google-adwords-advertisers

7. Augustine Fou- 7 -
Background

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. 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. Augustine Fou- 10 -
The Opportunity
As more digital
ads are placed
entirely
programmatically,
the opportunity for
fraud continues to
increase.

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. 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: http://bit.ly/augustine-fou-clickz
Slideshares: http://bit.ly/augustine-fou-slideshares
LinkedIn: http://linkd.in/augustinefou

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