The IAB estimates that $8.2 billion is now lost to digital advert fraud each year, so it’s not surprising that ad fraud has been flagged as a problem again this week.
What is alarming is that between $3 and $5 million per day was being siphoned by a group of hackers and the whole episode was flagged by a web security firm, White Ops, not by one of the numerous publisher or ad networks affected by it.
According to White Ops, the bot-net was “watching” as many as 300 million video ads daily on fake websites that the hackers had created to look like web pages from leading publishers such as the New York Times and CNN, by spoofing thousands of legitimate web addresses - the hackers also managed to spoof Facebook logins and video engagement.
Digital ad spend is all but confirmed to eclipse TV spend by the end of 2016 (i.e. next week) but there aren’t any guarantees around who will see your ads (or even if those views will be from real people). The digital ad industry lacks sufficient safeguards to prevent something like this happening again.
This raises major questions over the validity of digital ads and what return marketers really get from their investment.
Here are a few tips from us:
- Don’t buy on a CPM basis (insist on CPA or CPC)
- Only serve ads to countries where your users are based (sounds obvious, but you’d be surprised)
- Regularly review the traffic you receive via analytics to verify engagement is good (if they aren’t sticking, you’re doing the wrong picking)
- Examine as many ad platforms and options as you can based on where your personas hang out online (native advertising is getting bigger and better)
- Produce and distribute quality content through your adverts rather than pushing brand (give your personas a reason to click that benefits them instead of you)
In what appears to be the largest digital advertising scam in history, a group of Russian hackers reportedly built a click-fraud machine that stole up to $5 million daily from top advertisers and publishers. But even that is just the tip of the iceberg when it comes to online ad fraud. Estimates are that billions of dollars are lost annually because of fraudulent clicks, fake traffic, and other scams. But because of the way the online-advertising market is structured, with several layers of middlemen and ad networks, there is little incentive to stop it.