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What Agencies Need to 
Know About Fighting 
Digital Ad Fraud 
Dr. Augustine Fou 
212.203.7239 | acfou@mktsci.com 
http://l...
Industry Leaders 
September 30, 2014 - IAB, 4A’s, and ANA 
announce cross-industry organization to fight 
ad fraud, malwar...
Brief Agenda 
• Background 
• How Impression (CPM) Fraud Works 
• How Click (CPC) Fraud Works 
• Technology and Techniques...
Background 
- 4 - Augustine Fou
Why Now? 
“As more ad inventory is bought and 
sold programmatically on ad exchanges 
(estimated $21 billion worldwide), b...
Motive & Opportunity 
As more digital 
ads are placed 
entirely 
programmatically, 
the opportunity for 
fraud continues t...
The Biggest Target 
$60 billion/yr 
digital ad spend 
subject to fraud 
counterfeit 
goods 
$24 billion 
bank 
robberies 
...
Most Lucrative Target 
bank interest stock market digital ad fraud 
94% margin 
Source: Digital Citizens 
Alliance Study, ...
Main Types of Digital Ads 
Impressions 
(CPM/CPV) 
Clicks 
(CPC) 
Leads 
(CPL) 
Sales 
(CPA) 
• Display ads 
• Video ads 
...
Digital Ad Spend (IAB FY 2013) 
CPM Performance 
Impressions 
(CPM/CPV) 
Clicks 
(CPC) 
Leads 
(CPL) 
Sales 
(CPA) 
Search...
Prime Target for Ad Fraud 
Impressions 
(CPM/CPV) 
Clicks 
(CPC) 
Search 
$18.5B 
Display 
$8.2B 
Video 
$3.0B 
$2.8B $3.7...
Industry Targets for Fraud 
Ad spend data from eMarketer March 2014 
Fraud rate data from Integral Ad Science Q2 2014 Frau...
The focus for today... 
What we are NOT talking about 
• viewability and new standards 
• off-target or sub-optimal target...
How Impression (CPM) 
Ad Fraud Works 
- 14 - Augustine Fou
Bad Guys Put Up Sites 
site = analyzecanceradvice .com 
19 blocked ads on page 
site = missomoms.com 
- 15 - Augustine Fou
Load Tons of Ads on Pages 
http://modernbab y.com/ 
http://interiorcom plex.com/ 
- 16 - Augustine Fou
Load Ads in Hidden iFrames 
Source: Spider.io May 2, 2013 
Ads are hidden in up to 
72 layers 
Entire web pages are 
loade...
Fake their “Viewability” 
Source: Spider.io May 2, 2013 
Ads are above the 
fold of the page 
But their pixel 
opacity can...
Use Bots to Load the Pages 
Source: Wired 
Source: Google Digital Attack Map 
- 19 - Augustine Fou
Sell Impressions on Exchanges 
“Modernbaby.com and Interiorcomplex.com 
Each of these sites peddles enormous traffic on th...
Suspicious Data Discrepancy 
InteriorComplex.com - 
independent measurements 
estimate 30-40k monthly 
unique visitors but...
Traffic Firehose On/Off 
Source: Alexa 
Source: spider.io 
Legit human traffic does not change rapidly; but bot traffic 
(...
Where Fake Impressions Come From 
Ad exchanges are particularly prone to fraud because shady sites sell enormous 
quantiti...
Fake Mouse Moves, Clicks 
AdAge, May 2014 
“So much for bots giving themselves 
away by acting like, well, bots. Turns out...
Video Ad Views Exploded 
Dec 2013 35.2B 
video ads per month 
Source: comScore, Jan 2014 via MarketingCharts 
- 25 - Augus...
Digital Video Ad Spend 
Source: eMarketer, May 2013 
Digital video ad 
spend continues to 
rise rapidly as more 
TV ad dol...
Video Ads Are Lucrative 
Video ad CPMs 
are $8 - $12, 
which means 
they are more 
than 10X more 
lucrative than 
display ...
Video Fraud (March 2014 data) 
Total video ads March 2014 = 28.7B 
Source: comScore 
Fake video ad impressions per day = 8...
How Search (CPC) 
Click Fraud Works 
- 29 - Augustine Fou
Set Up Fake Sites 
Alexa 
[no data] 
Compete 
[no data] 
Quantcast 
[no data] 
to carry 
search ads 
- 30 - Augustine Fou
Other Bad Guy Domains 
http://analyzecanceradvice .com 
http://analyzecancerhelp .com 
http://bestcanceropinion .com 
http...
Created by Templates 
http://picturesandbox.com/screengrab/grid.php 
- 32 - Augustine Fou
Thousands of Fake Sites 
Source: more screen captures 
http://picturesandbox.com/screengrab/grouped.php 
- 33 - Augustine ...
Target Biggest PPC Spenders 
Insurance est. Spending: 
- Statefarm.com - $46M /yr 
- Geico.com - $44M 
- Progressive.com -...
Choose Expensive Keywords 
olay.com homemadesimple.com 
> 100,000 monthly searches 
avg position 1 – 10 
sort by highest a...
Bots Type Search Term 
buy eye cream online 
healthsiteproduc tionalways.com 
- 36 - Augustine Fou
Bots Click Search Ad 
Olay.com ad 
in #1 position 
- 37 - Augustine Fou
Cover Their Tracks 
Known blackhat 
technique to hide real 
referrer and replace 
with faked referrer. 
SIX (6) redirects ...
Trick Analytics Reports 
http://www.olay.com/skin-care- 
products/OlayPro- 
X?utm_source=msn&utm 
_medium=cpc&utm_camp 
ai...
Case Example 
BEFORE 
Top 2 “good guys” = 76% 
AFTER 
Top 5 “good guys” = 94% 
18% of spend shifted from fraudulent websit...
Step Up The 
Fraud Fighting 
- 41 - Augustine Fou
Dispelling Myths 
Q: Does reducing ad fraud mean reducing ad spend? 
A: No, it improves the quality (and therefore ROI) of...
Dispelling Myths 
Q: Does ad fraud require malware compromised PCs to occur? 
A: No, the bad guys are using advanced techn...
Threat Analysis 
Advanced technical analysis of HOW fraud is 
committed via different vactors like compromised PCs, 
malwa...
Placement/Viewability 
Technology platforms to analyze the placement of ads 
on dimensions like viewability, brand safety,...
Non-Human Traffic (NHT) 
Technology and techniques to detect non-human (bot) 
visits to a site and loading of ads; solutio...
- 47 - Augustine Fou 
Where Each Solution Plays 
S U P P L Y 
FAKE SITE PUBLISHER PUBLISHER 
AD NETWORKS 
SSP DSP 
exchang...
Action Steps 
• Build in fraud fighting technologies and techniques into 
every scope of work (if it is not already) 
• Co...
Dr. Augustine Fou – Technical Forensics 
“I advise clients and their agencies on the 
technical aspects of fighting digita...
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4As Digital Ad Fraud Webinar October 2014

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Webinar on Digital Ad Fraud

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4As Digital Ad Fraud Webinar October 2014

  1. 1. What Agencies Need to Know About Fighting Digital Ad Fraud Dr. Augustine Fou 212.203.7239 | acfou@mktsci.com http://linkd.in/augustinefou October 2014 #4AsWebinars @acfou - 1 - Augustine Fou
  2. 2. Industry Leaders September 30, 2014 - IAB, 4A’s, and ANA announce cross-industry organization to fight ad fraud, malware, and piracy. “We’ve invested [heavily] in data and data technology and [have] been very much at the forefront of fraud verification,” said John Montgomery, GroupM “We must create an all-inclusive program that identifies qualified participants, and commits them to good actions, guaranteed by continual monitoring and sanctions for non-compliance,” said Randall Rothenberg, IAB. Bob Liodice, President and CEO of the ANA said, “It is imperative that the ecosystem addresses online fraud and improves media measurement and transparency.” “Together we can continue to rebuild the trust that is necessary for the interactive marketing industry to thrive,” said Nancy Hill, President and CEO, 4A’s - 2 - Augustine Fou
  3. 3. Brief Agenda • Background • How Impression (CPM) Fraud Works • How Click (CPC) Fraud Works • Technology and Techniques • Stepping Up The Fight Against Ad Fraud - 3 - Augustine Fou
  4. 4. Background - 4 - Augustine Fou
  5. 5. Why Now? “As more ad inventory is bought and sold programmatically on ad exchanges (estimated $21 billion worldwide), bad guys are finding it easier to commit fraud and easier to hide in a larger haystack.” -- Dr. Augustine Fou - 5 - Augustine Fou
  6. 6. Motive & Opportunity As more digital ads are placed entirely programmatically, the opportunity for fraud continues to increase. - 6 - Augustine Fou
  7. 7. The Biggest Target $60 billion/yr digital ad spend subject to fraud counterfeit goods $24 billion bank robberies $38 million tax refund 5,000 robberies in 2011 Somali pirates $18 billion 39% of Global Digital Ad Spend $154B (2015E) Source: eMarketer March 2014 WSJ: “A Third of Traffic is Bogus” March 2014 fraud $5 billion - 7 - Augustine Fou
  8. 8. Most Lucrative Target bank interest stock market digital ad fraud 94% margin Source: Digital Citizens Alliance Study, Feb 2014 90X 9X 11% returns 1% interest - 8 - Augustine Fou
  9. 9. Main Types of Digital Ads Impressions (CPM/CPV) Clicks (CPC) Leads (CPL) Sales (CPA) • Display ads • Video ads • Social display • Mobile display • Search ads • Mobile search • Affiliate revenue share • Completed lead forms sold on cost-per- lead basis - 9 - Augustine Fou
  10. 10. 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 - 10 - Augustine Fou
  11. 11. Prime Target for Ad Fraud Impressions (CPM/CPV) Clicks (CPC) Search $18.5B Display $8.2B Video $3.0B $2.8B $3.7B Mobile 84% digital spend Leads (CPL) Sales (CPA) Lead Gen 4% $1.7B 11% Other $4.8B • classifieds • sponsorship • rich media • email 16% - 11 - Augustine Fou
  12. 12. Industry Targets for Fraud Ad spend data from eMarketer March 2014 Fraud rate data from Integral Ad Science Q2 2014 Fraud Report high CPC industries - 12 - Augustine Fou
  13. 13. The focus for today... What we are NOT talking about • viewability and new standards • off-target or sub-optimal targeting of ads What we are talking about • fake ad impressions (display, video) generated by non-human traffic (i.e. bots) to steal ad dollars • fake clicks to steal cost-per-click ad dollars - 13 - Augustine Fou
  14. 14. How Impression (CPM) Ad Fraud Works - 14 - Augustine Fou
  15. 15. Bad Guys Put Up Sites site = analyzecanceradvice .com 19 blocked ads on page site = missomoms.com - 15 - Augustine Fou
  16. 16. Load Tons of Ads on Pages http://modernbab y.com/ http://interiorcom plex.com/ - 16 - Augustine Fou
  17. 17. 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 - 17 - Augustine Fou
  18. 18. 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 - 18 - Augustine Fou
  19. 19. Use Bots to Load the Pages Source: Wired Source: Google Digital Attack Map - 19 - Augustine Fou
  20. 20. Sell Impressions on Exchanges “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 By Mike Shields - 20 - Augustine Fou
  21. 21. Suspicious Data Discrepancy InteriorComplex.com - independent measurements estimate 30-40k monthly unique visitors but site sells 30 MILLION PER DAY ModernBaby.com - independent measurements estimate 20k monthly unique visitors but site sells 19 MILLION PER DAY Quantcast: 29k /mo uniques Compete: 42k /mo uniques Quantcast: no data Compete: 20k /mo uniques - 21 - Augustine Fou
  22. 22. Traffic Firehose On/Off Source: Alexa Source: spider.io Legit human traffic does not change rapidly; but bot traffic (firehose) can be rapidly turned off and directed to other sites. - 22 - Augustine Fou
  23. 23. Where Fake Impressions Come From 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 - 23 - Augustine Fou
  24. 24. Fake Mouse Moves, Clicks AdAge, May 2014 “So much for bots giving themselves away by acting like, well, bots. Turns out they can be made to act quite human, which is foiling efforts to detect them. Scammers sending fake traffic to websites can make their bots move around web pages exactly as humans would -- with mouse movements, clicks and all -- causing problems for anti-fraud software working to ferret out malicious traffic.” - 24 - Augustine Fou
  25. 25. Video Ad Views Exploded Dec 2013 35.2B video ads per month Source: comScore, Jan 2014 via MarketingCharts - 25 - Augustine Fou
  26. 26. Digital Video Ad Spend Source: eMarketer, May 2013 Digital video ad spend continues to rise rapidly as more TV ad dollars shift to digital. Because video CPMs are so much more lucrative, it is more lucrative for bad guys too. - 26 - Augustine Fou
  27. 27. Video Ads Are Lucrative Video ad CPMs are $8 - $12, which means they are more than 10X more lucrative than display or mobile ads. Source: Turn, Inc. October 2013 - 27 - Augustine Fou
  28. 28. Video Fraud (March 2014 data) Total video ads March 2014 = 28.7B Source: comScore Fake video ad impressions per day = 88.4M /day Source: TubeMogul Report “from 3 botnets” Fake video ads per month = 2.7B /month 3 botnets accounted for 9.2% of video ad views (assuming $10 CPMs, 3 botnets caused $27 million of waste in March) - 28 - Augustine Fou
  29. 29. How Search (CPC) Click Fraud Works - 29 - Augustine Fou
  30. 30. Set Up Fake Sites Alexa [no data] Compete [no data] Quantcast [no data] to carry search ads - 30 - Augustine Fou
  31. 31. Other Bad Guy Domains http://analyzecanceradvice .com http://analyzecancerhelp .com http://bestcanceropinion .com http://bestcancerproducts .com http://bestcancerresults .com http://besthealthopinion .com http://bettercanceradvice .com http://bettercancerhelp .com http://betterhealthopinion .com http://findcanceropinion .com http://findcancerresource .com http://findcancertopics .com http://findhealthopinion .com http://finestcanceradvice .com http://finestcancerhelp .com http://finestcancerresults .com http://getcancerproducts .com 36,000+ more sites like these, designed to show search ads and self-click on them to siphon CPC revenue - 31 - Augustine Fou
  32. 32. Created by Templates http://picturesandbox.com/screengrab/grid.php - 32 - Augustine Fou
  33. 33. Thousands of Fake Sites Source: more screen captures http://picturesandbox.com/screengrab/grouped.php - 33 - Augustine Fou
  34. 34. Target Biggest PPC Spenders Insurance est. Spending: - Statefarm.com - $46M /yr - Geico.com - $44M - Progressive.com - $34M - Esurance.com - $28M - Allstate.com - $25M - USAA.com - $21M Retailers est. Spending: - Walmart.com - $48M /yr - Sears.com - $18M annually - Macys.com - $11M per year - JCPenney.com - $9.6M Many CPCs from $60 - $78 CPCs range from $15 - $63 Source: iSpionage - 34 - Augustine Fou
  35. 35. Choose Expensive Keywords olay.com homemadesimple.com > 100,000 monthly searches avg position 1 – 10 sort by highest avg CPC “cosmetic face lift” $10.84 CPC “residential home cleaning” $9.95 CPC Source: iSpionage Nov 2013 - 35 - Augustine Fou
  36. 36. Bots Type Search Term buy eye cream online healthsiteproduc tionalways.com - 36 - Augustine Fou
  37. 37. Bots Click Search Ad Olay.com ad in #1 position - 37 - Augustine Fou
  38. 38. Cover Their Tracks Known blackhat technique to hide real referrer and replace with faked referrer. SIX (6) redirects before ending on the landing page See how-to: http://www.blackhatworld.com/ blackhat-seo/cloaking-content-generators/ 36830-cloaking-redirect- referer.html - 38 - Augustine Fou
  39. 39. Trick Analytics Reports http://www.olay.com/skin-care- products/OlayPro- X?utm_source=msn&utm _medium=cpc&utm_camp aign=Olay_Search_Deskto p_Category+Interest+Prod uct.Phrase&utm_term=eye %20cream&utm_content= TZsrSzFz_eye%20cream_ p_2990456911 passing fake source utm_source=msn - 39 - Augustine Fou
  40. 40. Case Example BEFORE Top 2 “good guys” = 76% AFTER Top 5 “good guys” = 94% 18% of spend shifted from fraudulent websites to “top 5” good guys - 40 - Augustine Fou
  41. 41. Step Up The Fraud Fighting - 41 - Augustine Fou
  42. 42. Dispelling Myths Q: Does reducing ad fraud mean reducing ad spend? A: No, it improves the quality (and therefore ROI) of the ad spend; and as clients see more ROI they may even increase ad spend. Q: Do the amounts of ad fraud in the industry really matter? A: No, only the fraud that impacts your clients matter; the key is finding out what kind it is for your clients and taking steps to reduce it. Q: Why haven’t the advanced technologies already solved ad fraud? A: When “good guys” deploy new technologies/techniques, the “bad guys” innovate to stay ahead and avoid detection; using technology alone is like an arms-race that bad guys will always win. - 42 - Augustine Fou
  43. 43. Dispelling Myths Q: Does ad fraud require malware compromised PCs to occur? A: No, the bad guys are using advanced technology to create millions of virtual instances of browsers in data centers to visit web pages. Q: Bots can’t complete purchases, so we know who is human, right? A: Not exactly, bots can now fake purchases and app installs so that is no longer a fool-proof way to check for “humanness.” Q: Is there less fraud in mobile and video? A: No. In fact it is likely there is more fraud in mobile because there is a less mature ecosystem of antivirus and malware protection software for mobile; and video is highly lucrative for the bad guys (e.g. with 10x-20x the CPMs of display ads and rapid growth in ad spending). - 43 - Augustine Fou
  44. 44. Threat Analysis Advanced technical analysis of HOW fraud is committed via different vactors like compromised PCs, malware/spyware, browser toolbars, browser daemons, rootkits, javascript agents, etc. - 44 - Augustine Fou
  45. 45. Placement/Viewability Technology platforms to analyze the placement of ads on dimensions like viewability, brand safety, suspicious activity (fraudulent views or clicks) and inform real-time decisioning. - 45 - Augustine Fou
  46. 46. Non-Human Traffic (NHT) Technology and techniques to detect non-human (bot) visits to a site and loading of ads; solutions to save advertisers money (pay only when it is proven human, don’t pay when human does not stay to see ad). - 46 - Augustine Fou
  47. 47. - 47 - Augustine Fou Where Each Solution Plays S U P P L Y FAKE SITE PUBLISHER PUBLISHER AD NETWORKS SSP DSP exchanges MEDIA AGENCIES ADVERTISER ADVERTISER ADVERTISER D E M A N D user bot user crawler user bot bot bot bot bot bot bot user bot user crawler user bot ad inventory ad impressions ad spending ad spending
  48. 48. Action Steps • Build in fraud fighting technologies and techniques into every scope of work (if it is not already) • Constantly assess new tools and make rapid updates (along with blacklists and whitelists) to keep up • Use “combination therapy” (multiple technologies/ techniques together) to increase impact because no single detection vector or mitigation technique is enough • Update success metrics to focus on user actions and business levers rather than quantity/reach - 48 - Augustine Fou
  49. 49. Dr. Augustine Fou – Technical Forensics “I advise clients and their agencies on the technical aspects of fighting digital ad fraud. Using forensic technologies and techniques I help to assess the threat and the current countermeasures in order to recommend additional steps that can be taken to combat fraud and improve 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 acfou@mktsci.com | 212.203.7239 - 49 - Augustine Fou @acfou

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