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Now’s Not the Time to Brush Ad Fraud Under the Carpet

Vincent Flood  06 June, 2017

Paul NasseIn an industry where we tend to move from one shiny thing to another, it’s easy to forget that just because we’ve discussed a problem extensively, it doesn’t necessarily lead to that problem being resolved. Here Paul Nasse, UK Commercial Director at Integral Ad Science, explains why fraud still hasn’t gone away and how the fraudsters are continuing to evolve.

When supposed losses of up to $5 million a day were bandied about the digital advertising industry, it’s safe to say that almost everyone sat up and listened. And maybe the threat of a large financial hit, such as Methbot, is just what the industry needed to revitalise the stale discussion around ad fraud.

After the initial shock wore off, independent analysis into Methbot fuelled scepticism around the actual scale and impact of the operation. But it reminded the industry that the overall ad fraud empire is vast and combating its growth became a clear priority for advertisers looking to safeguard their investments.

Then before you could say ‘bot’, the ad tech industry switched focus. Ad fraud was out and brand safety was in. The headlines around the YouTube advertising scandal fuelled the conversation and heightened concerns for brand risk. And some brands are continuing to withhold ad spend from YouTube until “adequate assurances” are in place that this situation won’t happen again.

So now we’re waiting for the next advertising scandal to reveal itself and start the cycle all over again. But it doesn’t have to be this way. By understanding the advertising landscape we all operate within, educating ourselves on potential risks and the best way to protect ourselves, we can be proactive in avoiding the next industry meltdown.

Video in particular is an area to watch closely — with nearly two-thirds of UK adults watching digital video, publishers are rapidly adapting their digital content strategies to focus on this popular medium. Continuing its impressive streak, video amassed £693 million in UK ad spend by the end of 2016 and as a result is becoming a prominent and attractive target for fraudsters.

So what exactly is ad fraud, why is video advertising especially susceptible, and what can be done to deconstruct this global challenge before the cycle starts again and Methbot 2.0 is discovered?

Know your enemy: a clear view of ad fraud

The landscape of fraud is ever changing as fraudsters develop and adopt new techniques in a bid to evade detection. While there are many types of fraud, the most prevalent type is invalid traffic often known as bots – whereby human activities such as ad views are artificially simulated, with other forms such as domain spoofing, when ads are served on a different site to the one advertisers think their ads will appear on.

What makes video so vulnerable?

With consumer attention spans decreasing and people becoming more intrinsically programmed to respond to a rapid combination of visuals, sound, and motion, video is an incredibly powerful tool to communicate a brand message to consumers today. Consequently it’s no surprise that video ad placements are highly desirable and command higher CPMs — and wherever ad spend flows, fraud is sure to follow. Indeed, as our most recent Media Quality Report shows, there is a significant performance variation between video campaigns that implement ad fraud prevention technology and those who do not. Advertisers who proactively defend against video ad fraud reduce their risk from 4.9% to 0.6% in programmatic purchases and from 1.0% to 0.2% in publisher direct buys – reinforcing the importance of detection and optimisation tools.

This issue is further compounded by a classic ad fraud tactic, targeting where demand is greater than supply — which is currently the case with digital video. By filling the gap with false supply, fraudsters can create a lucrative enterprise. There is some awareness of this trend across the industry, with half of US advertisers citing concern around video ad fraud as a factor negatively impacting investment in the medium, yet to prevent fraud the industry needs a better understanding of what they are fighting.

What does video ad fraud look like?

Video ad fraud methods are broadly similar to other types of digital ad fraud, but there are a couple of key trends that are specific to video:

1. Volunteer botnets

These networks are made up of users who knowingly allow their computer to fraudulently browse content to get reciprocal traffic to their own sites. They often concentrate their efforts on specific videos on user-generated content sites, where video creators get a share of revenue.

2. Unsecure websites

Sites that either buy invalid traffic or use incentivised browsing to generate ad revenue will tend to start with video ads because they generate a greater return on investment.

How can we defeat the ad fraud empire?

There is no one-time fix for ad fraud; it’s an ever-evolving arms race. But, as fraud techniques become increasingly sophisticated, the industry can continuously improve detection and prevention processes and stay one step ahead.

Awareness and participation are the biggest factors in combating fraud — if fraud is to be defeated; all occupants of the digital ecosystem must play their part in identifying fraudulent practices and preventing their impact on campaigns. Effective fraud detection should combine behavioural and environmental analysis, using a big data approach to understand users, with browser and device analysis, to identify and eliminate specific cases of fraud in real time.

In addition, targeted reconnaissance techniques such as disassembly of fraudulent malware and software, direct analysis of paid traffic, infiltration of hacker communities, and social engineering tactics are vital measures to identify potential threats before they strike.

In short, gaining a high-level understanding of ad fraud, implementing robust anti-fraud solutions – while making sure vendors and partners do the same – and supporting industry initiatives to combat fraud, are crucial in creating a secure and trustworthy digital advertising ecosystem. Fraudsters will always follow where advertising budgets are focused, so with rising spend on digital video ads; a rise in fraudulent activity was predictable. As publishers make video content central to their monetisation strategies, the whole industry must pay greater attention to the issues surrounding ad fraud and how to combat it — and not just sweep it under the carpet until Methbot 2.0 rears its head.

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