Warc Blog

Online ad fraud costs $6bn

3 October 2013
NEW YORK: Online fraud involving ads and false click though rates is a major issue costing brands $6bn a year, a team of web security experts has claimed.

"In advertising, you can commit million dollars of fraud and no one will notice," Dan Kaminsky of cyber-security specialists White Ops told Ad Week. "In fact, people are happy because the click numbers went up."

Data from White Ops identifies sites where between 20% and 90% of ads and clicks were fraudulent, with computer bots being used to fool advertisers into paying for traffic.

One such was an amateur video site which featured ads for brands such as Target, Amazon and State Farm, the Wall Street Journal reported. A brand that did not appear, however, was Zipcar, the car hire service, which used White Ops to filter out bogus traffic.

"When you walk into this world, you walk with eyes wide open," said Brian Harrington, chief marketing officer at Zipcar. "You know stuff is not real."

White Ops CEO Michael Tiffany said people in the industry had wrongly assumed that such fraud was only a minor issue. He argued that high-tech criminals were changing their modus operandi and moving away from hacking into bank computers to target ad dollars.

"It's a better crime," he said. "There are fewer people looking for you."

Part of the problem, said White Ops, was that the online ad system was too open, too complicated and not enough people understood it.

Automated systems have "enabled greater buying efficiencies and controls, but also made it easier for the bad guys," said Arthur Muldoon, chief executive of the media buying firm Accordant Media.

White Ops chairman Jon Bond added that there was no incentive to fix the system as most people continued to make money. "There is tacit cooperation," he said. "And the clients are getting screwed."

Bond further claimed that agencies were afraid of looking bad: "They don't know what to do with it and then rationalize it away".

But the Interactive Advertising Bureau rejected that idea. "Everybody recognizes that this is a problem," said Steve Sullivan, vice president of advertising technology. "The reality is some of those companies are in fact doing the best they can."

Data sourced from Ad Week, Wall Street Journal; additional content by Warc staff

 
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