1. Augustine Fou- 1 -
Dr. Augustine Fou
http://linkd.in/augustinefou
July 2014
How Large is
Digital Ad Fraud

2. Augustine Fou- 2 -
Digital Ad Spend (IAB FY 2013)
Impressions
(CPM/CPV)
Clicks
(CPC)
Leads
(CPL)
Sales
(CPA)
Search 43%
$18.5B
Video 7%
$3.0B
Lead Gen 4%
$1.7B
11% Other
$4.8B
Source: IAB, FY 2013 Internet Advertising Report, April 2014
$36.2B
Display 19%
$8.2B
Mobile 15%
$3.7B$2.8B
NOTE: figures from IAB FY 2013
($43B annual ad spend)
CPM Performance
• classifieds
• sponsorship
• rich media
• email
$6.5B

3. Augustine Fou- 3 -
Digital Ad Fraud Estimates
Impressions
(CPM/CPV)
Clicks
(CPC)
Search
$18.5B
$36.2B Ad Spend
Display
$8.2B
Video
$3.0B
Mobile
$3.7B$2.8B
(U.S. digital ad spend only)
DollarsAvg Fraud Rate
$4B50%Display
$2B60%Video
$6B30%Search
$2B40%Mobile
$14BTOTALS 39%
Multiple sources

4. Augustine Fou- 4 -
Buckets 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.

5. Augustine Fou- 5 -
Display Ad Impressions
• 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
30 – 60%
fraudulent, wasted, not-in-view
IAB: FY 2012 Display Ad Spend = $7.7B

6. Augustine Fou- 6 -
Video Ad Impressions
• Advanced bots are programmed to load video ads and wait
till they are counted as “views” before leaving the page
• Video ads have 10x the CPM compared with display ads, and
are therefore a prime target for ‘bad guys’
50 - 77%
fraudulent, autoplay, wasted, not-in-view
eMarketer: Digital Video Ad Spend est. $4B in 2013
Source: Vindico via Adweek, December 15, 2013

7. Augustine Fou- 7 -
Search Ad Clicks
• Search ad fraud is a bit more involved to commit and usually
occurs on “search partner” sites (not the main search sites)
• Bad guys set up sites with no content, execute searches with
lucrative keywords, and click the ads with bots
20 - 40%
fraudulent, accidental, wasted
Source: Adometry Click Fraud Report 1H 2013
IAB: FY 2012 Search Ad Spend = $16.8B

8. Augustine Fou- 8 -
Affiliate Sales Fraud
http://www.businessinsider.com/ebay-the-fbi-shawn-hogan-and-brian-dunning-2013-4

9. Augustine Fou- 9 -
Lead Fraud ~ 20-40%
http://www.webranking.com/blog/lead-click-fraud-adsense-scam-
google-adwords-advertisers

10. Augustine Fou- 10 -
Dr. Augustine Fou – Digital Consigliere
“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.”
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
@acfou
ClickZ Articles: http://bit.ly/augustine-fou-clickz
Slideshares: http://bit.ly/augustine-fou-slideshares
LinkedIn: http://linkd.in/augustinefou

11. Augustine Fou- 11 -
Additional Resources
Augustine Fou- 11 -
http://www.slideshare.net/augustinefou/display-ad-fraud-101-by-augustine-
fou-technical-forensics
http://www.slideshare.net/augustinefou/video-ad-fraud-101-by-augustine-
fou-technical-forensics
http://www.slideshare.net/augustinefou/search-ad-fraud-101-by-augustine-
fou-technical-forensics
https://www.youtube.com/watch?v=MwXdDRPqBTM