Online advertising fraud is hardly a problem limited to small businesses or inexperienced internet marketers. Major companies have been sucked into online advertising scams as well. One Wall Street Journal report claims that one third of online advertising is fraudulent. The Journal also reported that some of the globe’s most recognizable brands—including Oreo, Burger King and Sprint lost millions of ad budget dollars at the hands of a Florida company that used fake websites to rip off their customers. If it can happen to multi-million dollar companies, it can happen to anyone.
In March of this year the Interactive Advertising Bureau’s Annual Leadership Meeting, was dominated by one topic: fraud. Unfortunately, there’s not much being done about it, much less anything being proposed to reduce the problem. There’s an inconvenient truth here. Just about every company in the internet commerce ecosystem can benefit in some way from it.
Eliminating fraudulent ad impressions would mean higher ad prices and at the same time lower ad performance. Fraud can increase traffic for online publishers, and performance looks better because of it. And ad networks can promote great results that show clients and prospects that internet advertising works. Sadly, there’s little incentive to insist on honest practices.
Ad Age recently published a breakdown of what this cyber fraud typically consists of. Though it’s a bit technical, online ad buyers should be taking steps to be smarter consumers. The article presents for basic types of ad fraud:
1. Bot Traffic
A publisher buys “traffic” from a third party, but instead of delivering real visitors the third party sends bots to create page views.
2. Ad Insertion
A browser extension inserts ads into a website without the publishers permission. The company behind the fraud makes money by listing the ads the the programmatic ecosystem.
3. Robot Retargeting
A fraudster sets off a bot designed to look like a specific kind of consumer, such as a would-be car buyer. After that bot has browsed a combination of web pages that make it appear like a surefire prospect, it clicks on an ad, making ad targeting companies money.
4. CMS Hacking
Fraudsters hack into publisher websites and set up their own pages under legitimate domains. Then they list those pages on exchanges, collecting money while buyers think they’re purchasing premium inventory.
To be fair, there are those who think this whole fraud thing is hyped and overblown. But it’s not surprising to discover that those most inclined to deny there’s a problem tend to be those in the industry who are in the best position to benefit from it. It’s a little bit like making money selling stolen goods that you might suspect are stolen, but don’t really know for sure.
While online ad networks continue to preach best practices, I recommend a “buyer beware” attitude for anyone who buys online advertising. It’s the ad buyer who’s ultimately hurt from fraud, not the seller. Don’t assume that ad networks are looking out for your interests. The evidence indicates otherwise.