What is the answer to the ad fraud arms race?
It might only now be a hot topic, but online ad fraud has been around for years, writes Infectious Media’s Dan de Sybel. So why has it not been eradicated?
There’s an arms race taking place between digital ad buyers and ad fraudsters, and given the media coverage being garnered it certainly looks like it is a serious threat to the life, liberty and pursuit of happiness of the adtech industry.
With the rise of traded media, and more notably, the rise of the inexperienced ad trader, fraud has been responsible for a lot of wasted ad spend and, if the fraudsters are left to run riot, has the potential to undo the gains made from operating in the programmatic ad market.
Articles like “The truth about online ad fraud” and “Transformers: fraud bots in disguise” show in detail the technological arsenal developed by the fraudsters. Recently we have seen click bots evolving into DeceptiBots, simple domain fraud into toolbars and off-page ads into ad stacking. As each method of fraud is defeated by better human and non-human processes, another and more sophisticated one is developed.
It is worth highlighting that online ad fraud existed well before the rise of the ad exchange. Way back, in the early noughties, it was commonplace for click farms to pollute the inventory of all the major performance networks with unscrupulous publishers using this low tech way of improving CTRs and thus obtaining more spend from the otherwise oblivious automated algorithms and human optimisation managers.
So given that this has been around for years, why has it not been eradicated? It was in 2004 when Bill Gates stated that the problem of email spam would be solved in two years after already having been around for more than fifteen. It actually got worse for the following two years and took until around 2012 to be minimised to a point where many people barely notice it. It’s hardly “solved” though.
Similarly with online bank fraud, each new security measure (e.g. chip and pin, Verified by Visa) leads to new methods employed by the fraudsters to circumvent them (e.g. fake websites, malware).
Many of the techniques used in bank fraud are replicated in the online ad world where the pickings can be just as profitable as in finance but with less risk of prosecution and/or hefty fines being imposed when caught.
And herein lies the rub. With bank fraud, the governments and police forces around the world have made it the banks’ problem to deal with. They support them with strict laws and hefty fines/jail time if the fraudsters are caught, but it is still the responsibility of the bank to investigate and bring the fraudsters to justice, whilst in the meantime reimbursing the customer with the money they lost.
With online ad fraud, the advertisers almost always pay, except in the very rare cases where online fraud is proved and a publisher or ad tech provider can be held to account. Even in the cases where a fraudster is caught, they tend to only have to compensate the money spent on fraudulent activity and will often carry on defrauding with only a simple change in company name, as seen in the case of Sambreel last year.
The shift from ad networks to traded media through ad exchanges has made a major difference though. With exchanges the fact is that all this borderline illegal activity is more obvious to anyone who can process the impression level data feed from their preferred DSP partner.
For those that have the ability to process the full bidstream, it becomes even more obvious from the huge number of faked browser user-agent strings (identifiers that show operating system and browser combinations) and clicks with IP addresses that differ from the IP address of the impression that they came from.
Ironically, the transparency of the online ad exchange has exposed the fraud that has existed for years and consequently led to a loss of trust in traded media. But by allowing the advertisers to pay for fraudulent activity, this mistrust will only continue and potentially stall the growth of investment in traded media.
Whilst new technology solutions are constantly being developed to combat fraud, the onus of responsibility needs to be shifted to the companies that sell the advertising services if we are to see the investment required to reduce fraud to the mere background trickle that email spam has become.
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Dan de Sybel is director of technology and operations, Infectious Media.
Don’t miss out: MediaTel is hosting the annual Automated Trading Debate on 6 October. With panellists from Xaxis, Bauer Media, RadiumOne and Mediaocean, amongst others, the event promises a full examination of all the thorny issues arising around programmatic trading. Full details here.