Procurement to Help Reduce Ad Fraud

Procurement Should Step In
to Help Reduce Ad Fraud
April 2017
Augustine Fou, PhD.
acfou@mktsci.com
212. 203 .7239

April 2017 / Page 1marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
What is ad fraud ?
Ad Fraud = ad impressions caused
by bots, not seen by humans
Impressions
(CPM) Fraud
(includes mobile display, video ads)
Search Clicks
(CPC) Fraud
(includes mobile search ads)

Advertisers’ budgets diverted to fake sites
$40 billion
Display Spend
$21
FB+GOOG Display
$11E
CPM Fraud
$8
100% bot traffic
“fraud (cash out) sites”
• No content
• Stolen content
• Fake content
low CPMs
higher CPMs
“sites with real content that
real humans want to read”
Source: DCN/ WhiteOps 2015

Fake sites have no content, no humans
Identical sites
made by template
Alphanumeric
domains
So they can sell ad
“inventory” at low prices
Source: Sadbottrue.com

“sites that carry ads”
There’s 15X more fake sites, than good
Source: Verisign, Q4 2016
329M
domains
$83B
digital
Google
Search
FB+GOOG
Display
$29
billion
“sites you’ve heard of”
WSJ
ESPN
NYTimes
Economist
Reuters
Elle
top 1 million + next 10 million
159 million
carry adsno ads
3%
“Digital spend outside
of Google/Facebook”

Fake sites successfully sell ads… how?
100% viewability
(fake)
AD
Stack ads all
above the fold to
trick detection
0% NHT
(fake)
Buy traffic that is
guaranteed to
pass fraud filters
clean placement
(fake)
Pass fake source
or forge fake
placement details
http://www.olay.co
m/skin-care-
products/OlayPro-
X?utm_source=elle
&utm_medium=dis
play
+ +
“by tricking measurement and reporting”

But only humans convert, bots don’t …
Measure
Ads
Measure
Arrivals
Measure
Conversions
346
1743
5
156
A
B
30X more human
conversion events
• More arrivals
• Better quality
more humans (blue)
good publishers
low-cost media,
ad exchanges

Case in point… Chase
“JPMorgan had already decided
last year to oversee its own
programmatic buying operation.
Advertisements for JPMorgan
Chase were appearing on about
400,000 websites a month. [But]
only 12,000, or 3 percent, led to
activity beyond an impression.
[Then, Chase] limited its display
ads to about 5,000 websites. We
haven’t seen any deterioration on
our performance metrics,” Ms.
Lemkau said.”
“99% reduction in ‘reach’ … Same Results.”
Source: NYTimes, March 29, 2017
(because it wasn’t real, human reach)

Beware mobile… MORE rampant fraud
Bad apps load impressions
in background, not in use
Source: Forensiq
Fake mobile devices install
apps and interact w/ them
Download and Install
Launch and Interact
“more money; less measurable”

Focus on real, human conversions
Organic sources
have more humans
(dark blue)
Conversion actions (calls)
are well correlated to
humans; bots don’t call

Measure for humans in all campaigns
Lower quality paid sources
mean higher cost per human
acquired – like 11X the cost.
Sources of different
quality send widely
different amounts of
humans to landing pages.

Actively reduce bots/fraud in-flight
Launch Week 3 onwardWeeks 1-2
Initial baseline
measurement
Measurement after
first optimization
After eliminating several
“problematic” networks

Verify analytics, look for anomalies
click on links
load webpages tune bounce rate
tune pages/visit
“bad guys’ bots are advanced enough to fake most metrics”

Insist on line-item details from vendors
Line item details
Overall average
9.4% CTR
“fraud hides easily
in averages”
“line item details
reveal obvious fraud”

Current Fraud Detection
Can’t Catch it

Fraud bots are NOT on any list
user-agents.org
bad guys’ bots
2%
and “on the wane”
Source: GroupM, Feb 2017
bot list-matching
4%
Source: IAB Australia, Mar 2017
400
bot names in list
“not on any list”
disguised as popular
browsers – Internet
Explorer; constantly
adapting to avoid
detection
10,000
bots observed
in the wild

In-ad measurements could be entirely wrong
Publisher Webpage
publisher.com
Foreign Ad iFrames
adserver.com
Cross-domain (XSS) security
restrictions mean iframe cannot:
• read content in parent frame
• detect actions in parent frame
• see where it is on the page
(above- or below- fold)
• detect characteristics of the
parent page
1x1 pixel
js ad tags
ride along
inside iframe
incorrectly reported as
100% viewable

Methbot stayed hidden for years
Source: Dec 2016 WhiteOps Discloses Methbot Research
“Methbot, steals $2 billion annualized;
and it avoided detection for years.”
1. Targeted video ad inventory
$13 average CPM, 10X
higher than display ads
2. Disguised as good publishers
Pretending to be good
publishers to cover tracks
3. Simulated human actions
Actively faked clicks, mouse
movements, page scrolling
4. Obfuscated data center origins
Data center bots pretended to
be from residential IP addresses

Fraud comes in LARGE numbers…
Increased CPM prices
by 800%
Decreased impression
volume by 92%
Source: http://adexchanger.com/ad-exchange-news/6-months-after-fraud-cleanup-appnexus-shares-effect-on-its-exchange/
260 billion
20 billion
> $1.60
< 20 cents

“Having fraud DETECTION is not the
same as having fraud PROTECTION.”

“Let’s go fight some bad guys
together!”

About the Author
April 2017
Augustine Fou, PhD.
acfou@mktsci.com
212. 203 .7239

Dr. Augustine Fou – Independent Ad Fraud Researcher
2013
2014
Follow me on LinkedIn (click) and on Twitter
@acfou (click)
Further reading:
http://www.slideshare.net/augustinefou/presentations
https://www.linkedin.com/today/author/augustinefou
2016
2015

Harvard Business Review
Excerpt:
Hunting the Bots
Fou, a prodigy who earned a Ph.D. from MIT at
23, belongs to the generation that witnessed
the rise of digital marketers, having crafted his
trade at American Express, one of the most
successful American consumer brands, and at
Omnicom, one of the largest global advertising
agencies. Eventually stepping away from
corporate life, Fou started his own practice,
focusing on digital marketing fraud
investigation.
Fou’s experiment proved that fake traffic is
unproductive traffic. The fake visitors inflated
the traffic statistics but contributed nothing to
conversions, which stayed steady even after the
traffic plummeted (bottom chart). Fake traffic is
generated by “bad-guy bots.” A bot is computer
code that runs automated tasks.

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Procurement to Help Reduce Ad Fraud