Display ad fraud is more rampant today than it ever was due to the increased use of ad exchanges and programmatic media buying. Without humans actually verifying where the ads are shown, it has created enormous new opportunity for bad guys to commit digital display ad fraud -- selling tons of fake impressions into ad exchanges.

1. Display Ad Fraud
101
Dr. Augustine Fou
acfou [at] mktsci.com
http://linkd.in/augustinefou
February 2014
- 1 - Augustine Fou

2. 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
- 2 - Augustine Fou

3. Real-Time Bidding
Real-Time
Bidding to
Account for
25% of Display-
Ad Spending by
2015: eMarketer
- 3 - Augustine Fou

4. Types 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.
- 4 - Augustine Fou

5. How Impression (CPM)
Ad Fraud Works
- 5 - Augustine Fou

6. Bad Guys Put Up Sites
site = analyzecanceradvice .com
19 blocked ads on page
site = missomoms.com
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7. Load Tons of Ads on Pages
http://modernbab y.com/
http://interiorcom plex.com/
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8. Load Ads in Hidden iFrames
Source: Spider.io May 2, 2013
Ads are hidden in up to
72 layers
Entire web pages are
loaded into ad iframes to
boost impressions
Multiple redirects and
auto page refreshes
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9. Fake their “Viewability”
Source: Spider.io May 2, 2013
Ads are above the
fold of the page
But their pixel
opacity can be set
to zero (invisible)
Entire web pages
stuffed into ad
iframe; ads counted
as viewable
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10. Use Bots to Load the Pages
Source: Wired
Source: Google Digital Attack Map
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11. Traffic Firehose On/Off
Source: Alexa
Legit human traffic does not change rapidly; but bot traffic
(firehose) can be rapidly turned off and directed to other sites.
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12. Sell Fake Impressions
“Modernbaby.com and Interiorcomplex.com
Each of these sites peddles enormous traffic on the
exchanges. For example, on a recent day Modern Baby was
offering 19 million impressions via one exchange (quite the
baby boom) and Interior Complex 30 million [ad
impressions PER DAY] (the roaring housing market must be
back).” Source: Adweek – Suspicious Web Domains Cost Online Ad Business $400m per Year
Peak unique users
141k per month
Peak unique users
115k per moth
- 12 - Augustine Fou

13. Impression (CPM)
Ad Fraud Sizing
- 13 - Augustine Fou

14. Display Ad Impressions
30 – 75%
fraudulent, not-in-view, adblocked
IAB: FY 2012 Display Ad Spend = $7.7B
• 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
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15. Bot Traffic Estimates
24-29%
confirmed
bot
Source: Solve Media Sept 2013
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16. Sources of Fake Impressions
Ad exchanges are particularly prone to fraud because shady sites sell enormous
quantities “ad impression inventory” into the exchanges for re-sale.
Source: Integral Ad Science, via BusinessWeek Nov 26, 2013
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17. Viewability of Display Ads
Publisher direct is
best and lowest
risk
Source: Integral Ad Science Sept 2013 via MarketingCharts
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18. Display Ad (CPM) Fraud
Display Ads
500 billion
display ad impressions /mo
29%
Source: Solve Media 2013
confirmed bot traffic
~$1 - $3.50
cost per thousand
$2-6 billion
wasted ad spend (annualized)
- 18 - Augustine Fou

19. Digital Ad Spend (IAB FY 2013)
CPM Performance
Impressions
(CPM/CPV)
Clicks
(CPC)
Leads
(CPL)
Sales
(CPA)
Search 43%
$18.5B
Display 19%
$8.2B
Video 7%
$3.0B
$6.5B
NOTE: figures from IAB FY 2013
($43B annual ad spend)
Lead Gen 4%
$1.7B
11% Other
$4.8B
$2.8B $3.7B
Mobile 15%
• classifieds
• sponsorship
• rich media
• email
Source: IAB, FY 2013 Internet Advertising Report, April 2014 $36.2B
- 19 - Augustine Fou

20. Digital Ad Fraud Estimates
Impressions
(CPM/CPV)
Clicks
(CPC)
Search
$18.5B
Display
$8.2B
Video
$3.0B
$2.8B $3.7B
Mobile
$36.2B Ad Spend
Avg Fraud Rate Dollars
Display 50% $4B
Video 60% $2B
Mobile 40% $2B
Search 30% $6B
TOTALS 39% $14B
(U.S. digital ad spend only)
Multiple sources
- 20 - Augustine Fou

21. What Advertisers
Can/Should Do
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22. Areas of Optimization
targeting
delivery
viewability
bots /not seen by humans
improving
optimization
waste
reduction
30%
40%
30%
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23. Low Hanging Fruit
The most immediate, direct impact on ROI comes from reducing waste
25% On-Target Delivery
(Nielsen)
54% Not In View
(comScore)
23% Ad Blocked
(PageFair)
24 – 29% confirmed bot
(Solve Media)
- 23 - Augustine Fou

24. Digital Ad Forensics Process
Preliminary Scan Forensic Analysis
Sizing of
ad fraud
• Technology Tools
• Statistical analysis
Maintenance
Implementation
FREE
Preliminary analysis of
paid campaigns and
analytics to determine
magnitude of the ad
fraud impacting client.
$$$
Creating recommended
list of changes,
including list of sites to
exclude in each ad
channel.
• Budget shifts
• Further optimization
$
Subscribe to triangulated,
cross-industry database of
“ad fraud offenders” to
continuously update
blacklists and whitelists.
- 24 - Augustine Fou

25. Related Articles
Fake YouTube Videos
By: Augustine Fou, December 2013
Fake Linkedin Profiles
By: Augustine Fou, December 2013
Fake Facebook Profiles
By: Augustine Fou, Dec 2013
Fake Twitter Accounts
By: Augustine Fou, August 2013
An Ecosystem of Digital Ad Fraud
By: Augustine Fou, October 2013
Digital Ad Fraud Briefing
By: Augustine Fou December 2013
Ad Fraud Fighting Techniques
By: Augustine Fou October 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
- 25 - Augustine Fou

26. Dr. Augustine Fou – Technical Forensics
“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 – which produces
immediate ROI.”
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
ClickZ Articles: http://bit.ly/augustine-fou-clickz
Slideshares: http://bit.ly/augustine-fou-slideshares
LinkedIn: http://linkd.in/augustinefou
- 26 - Augustine Fou
@acfou

27. The Entire Ecosystem
- 27 - Augustine Fou