Online programmatic advertising has been around for well over a decade now, and, along with it, advertising fraud. The complexity of the system, and lack of any real authority overseeing its integrity, has allowed criminal enterprises to exploit weaknesses and pocket vast sums of marketers’ money.

The size and nature of the problem, along with efforts to confront ad fraud is featured in a special two-part episode of AudioMag from Magazines Canada. Listen to part 1, and to part 2.

“There are a lot of estimates on how much is stolen on any given year. One independent analyst firm said about $19 billion will have been stolen by the time we get to the end of 2018 and some give a lower number,” says Craig Silverman, media editor at BuzzFeed News, whose investigative reporting on advertising fraud has exposed extensive fraud in the app sector. “All numbers are in the billions and there are some people who actually believe that $19 billion is maybe only half or a third of what’s actually being stolen.”

The process behind how ad fraud is perpetrated in its most basic form is one that criminal enterprises around the world have perfected.

Mike Zaneis is the CEO of Trustworthy Accountability Group, or TAG, an industry non-profit that was created by stakeholders in advertising, agencies, publishers and the ad tech community to fight ad fraud in the supply chain.

“They’ll steal content from other legitimate sites and put it on their own. And through distribution of malware through computers and mobile, they are able to take over devices and open up web browsers unbeknownst to the user,” Zaneis explains. “We call this non-human traffic. Because there’s not a person on the other end of that browsing session but rather a bot.”

The fraud network then directs this non-human traffic, sometimes numbering in the millions, towards their fake websites.

“Now we get the last link in the chain which is advertising fraud. Because criminals only care about making money and they now have a website that has all this rich content on it, they have an audience which looks massive and very engaged even though there’s no real humans on that site. And now they’re a great candidate for putting advertising on the site,” says Zaneis.

“And they usually do this by working with third party intermediaries which is ad networks. And they can put lots and lots of ads on their website and the cheques just start showing up at the end of the month from the ad network partners and it essentially becomes the ATM machine for the criminals. It’s how they take money out of the ecosystem.”

Beyond the mechanics of how ad fraud is perpetrated, the scope of the problem is difficult to nail down and properly address because in an environment where there are so many players and no one solely responsible for the integrity of the system, it becomes a see no evil, hear no evil approach.

Asaf Greiner is the CEO of Protected Media and an expert in ad fraud.

“In many cases it starts with the CMOs themselves who don’t want to know what’s going on under the hood,” he says. “Part of the magic which makes this ecosystem so vulnerable is the fact that most of the people close to it have an agency problem. It starts with the CMOs who actually own the budgets, and it actually is their funds which are going to waste. However, they too have accountability. And if millions has gone to waste they are often worried about being the bearers of bad news to the boardroom.”

Beyond chief marketing officers, there is also reluctance at the agency level to track fraud, and report it back to their clients.

“When you move it forward the agency has more of a problem because in many situations when you are the bearer of bad news, the messenger does get shot. And the agency which will report there was fraud in traffic in the last year will probably lose its account so there is very little motivation for an agency to bring fraud to the attention of their customers’ brand,” says Greiner.

TAG has developed tools for publishers to implement that can help protect them from ad fraud.

Publishers fill out a text file where they name the ad network partners with whom they have contracts with.

“If I’m a website, I probably have maybe 10 partnerships with ad networks to sell my inventory. So I list those in a file and I make that available on a website—it is machine readable, easy to fill and upload.”

Potential buyers of ad space on a publisher’s site can check against this list to see if ad inventory that’s being sold is being offered by a legitimate seller of your inventory.

“If a buyer sees your inventory being sold by someone not on your .txt list they know that they’re not a legitimate seller of your inventory and they won’t purchase it,” says Zaneis. “It’s so simple—just connecting a couple of dots through the supply chain and you don’t have to be very technically proficient. Your web team can fill this out in less than an hour.”

Listen to part 1 of this two-part special episode on ad fraud.

Listen to part 2.

Find more episodes of AudioMag in our resource centre. AudioMag is available to download and subscribe to on iTunes.

AudioMag is produced by Tina Pittaway, an award-winning independent writer and broadcaster. Visit Tina online at tinapittaway.com to learn more about her work.

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