Webinar on Digital Ad Fraud

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
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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
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3. Brief Agenda
• Background
• How Impression (CPM) Fraud Works
• How Click (CPC) Fraud Works
• Technology and Techniques
• Stepping Up The Fight Against Ad Fraud
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4. Background
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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
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6. Motive & Opportunity
As more digital
ads are placed
entirely
programmatically,
the opportunity for
fraud continues to
increase.
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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
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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
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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
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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
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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%
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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
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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
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14. How Impression (CPM)
Ad Fraud Works
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15. Bad Guys Put Up Sites
site = analyzecanceradvice .com
19 blocked ads on page
site = missomoms.com
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16. Load Tons of Ads on Pages
http://modernbab y.com/
http://interiorcom plex.com/
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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
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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
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19. Use Bots to Load the Pages
Source: Wired
Source: Google Digital Attack Map
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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
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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
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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.
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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
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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.”
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25. Video Ad Views Exploded
Dec 2013 35.2B
video ads per month
Source: comScore, Jan 2014 via MarketingCharts
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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.
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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
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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)
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29. How Search (CPC)
Click Fraud Works
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30. Set Up Fake Sites
Alexa
[no data]
Compete
[no data]
Quantcast
[no data]
to carry
search ads
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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
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32. Created by Templates
http://picturesandbox.com/screengrab/grid.php
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33. Thousands of Fake Sites
Source: more screen captures
http://picturesandbox.com/screengrab/grouped.php
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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
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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
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36. Bots Type Search Term
buy eye cream online
healthsiteproduc tionalways.com
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37. Bots Click Search Ad
Olay.com ad
in #1 position
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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
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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
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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
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41. Step Up The
Fraud Fighting
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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.
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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).
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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.
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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.
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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).
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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. 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
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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