Truth #1: Digital Ad Fraud Occurs on Both Fake and Legitimate Websites. Here’s How.

New blog series highlights three uncomfortable truths about digital ad fraud and how you can be part of the solution.
Tom Drouillard, CEO, President and Managing Director
November 2, 2017

Digital advertising fraud is a widespread industry problem. Fraud estimates range from $6 billion to $16 billion annually, and the current supply chain structure makes it easy and attractive to commit ad fraud with little chance of retribution. Marketers, agencies, publishers and technology suppliers are frustrated.  Trust is at an all-time low. The industry is nearing crisis stage as marketers are seriously questioning, rethinking and redoing their digital investments.

Ad fraud is a confusing topic because it is technically complicated and certain underlying issues have not been openly discussed. As an independent auditor, AAM sees the underbelly of the media supply chain where little transparency exists. Our new whitepaper addresses key issues and illuminates three truths that can help us confront the ad fraud crisis:

3 truths that help confront the digital ad fraud crisis

By looking deeper into each of these topics and the business of fraud – how the money is made and how it leaves the ecosystem – it’s clear that ad fraud is conquerable. The war on fraud is winnable. Marketers can steer their budgets away from fraudulent sites to legitimate sites with verified human audiences, but the way marketers buy digital audiences must change. The entire supply chain needs to take steps to change how it operates. The way the entire supply chain operates must change.

In this blog, we’ll examine the types of sites where ad fraud frequently occurs.

Truth #1: Ad Fraud Occurs on both Fake and Legitimate Websites

Ad fraud occurs in two primary places: on fake and legitimate websites. Let’s look at how it takes place.

Fake-Site Fraud

Fake site

Marketers’ ads are placed on fraudulent websites with content that is pirated, fake or non-existent, and displayed to bots.

This occurs when the fraudster creates a bogus website, plugs into programmatic exchanges, buys traffic for the site, sells and displays the ad impressions, and collects the money for doing so. The fraudster steals ad dollars that were supposed to go to real publishers – just like counterfeit handbags or watches take the dollars meant for legitimate brands. 

Legitimate-Site Fraud:

Legitimate site

Marketers’ ads are placed on legitimate websites with real content and displayed to bots.

This occurs most often when a legitimate publisher’s organic audience is supplemented with third-party traffic to fulfill demand. Often this is completed through the purchase of traffic that may appear to be human but is in fact illegitimate bot traffic. This practice of illegitimate traffic sourcing is explained in the next blog.

 

How digital ad fraud takes place

While this is a simple framework, the buy side of the programmatic market doesn’t think or work this way today. Most automated buying is audience-based, and there is little transparency to distinguish legitimate from fake sites. Buyers are focused on reaching target consumers, no matter what site, and this is the root of the problem. Making the sites matter is one key step in minimizing fraud.

Fraudsters create bots to commit both fake- and legitimate-site fraud. But fraudsters do not covertly send their bots to legitimate publishing sites in substantial numbers because they don’t make money that way. Instead, they make money by selling manufactured bots as “traffic” to publishers. Traffic sourcing is a common means for publishers to fulfill advertiser demand, but many publishers do not know the traffic they purchase is not human.

When an ad is displayed on a legitimate site, that publisher receives the revenue, not the fraudster that might send a bot in without the publisher knowing. This is important to understand as legitimate site fraud occurs when a publisher, knowingly or unknowingly, introduces bots onto the site.  

Download the Full White Paper

Ready to learn more about the causes of digital ad fraud and what you can do to help the industry solve this crippling problem? Download our new whitepaper: 

Download 3 Truths That Help Confront the Digital Ad Fraud Crisis