Russian Ad Fraud ‘Methbot’ Scam
Potentially the largest Ad Fraud scam ever. Russian hackers built a click-fraud machine that stole up to $5 million daily from top advertisers and publishers. The scam involved computers mimicking human surfers and generated fake clicks and views upon websites. Security firm White Ops discovered the ‘Methbot’ operation.
The bots White Ops reported, were viewing 300 million video ads daily on fake websites, which were made to look like they were from established websites such as CNN. The Association of National Advertisers says more than $7 billion will be lost this year from different types of ad fraud.
Additionally, the huge Xindi scam occurred last year. $3 billion was scammed in 2015, by infecting over 8 million computers. This worked (and is still a common problem) by computers downloading malicious software unknowingly (e.g. from clicking a popup) which then controls the computer for different purposes.
Funding Terrorists, Nazis and Pornographers
Alongside ad fraud, there has been a lot of issues surrounding programmatic advertising as a whole. Recently we wrote about the how terrorists were being funded by the UK government and brands such as M&S, HSBC, Sky and Vodafone.
Similarly, The Times wrote an article that some of the biggest brands are unknowingly advertising on the websites of terrorists, nazis and pornographers without knowing it. This happens because the big brand would advertise through a platform such as Google Adsense. If a website decides to display Google advertisements then brands advertising through the platform will appear. They also show up on YouTube advertisements, owned by Google. Advertising on these kinds of sites is against Google’s rules, but some websites still get away with it.
The advertisements can generate significant amounts of revenue for these groups. On YouTube you earn around $7 for every 1000 clicks. The Times reported that they saw advertisements from Mercedes and Waitrose on hate sites. An advert for a Mercedes E-Class appeared next to a pro-ISIS video viewed over 115,000 times for example.
Some brands ‘do not see agencies acting in their interests.’ The chief brand officer of P&G (one of the world’s largest advertisers) said ‘we have a media supply chain which is murky at best and fraudulent at worst. We need to clean it up.’
P&G Ad Fraud Awakening
P&G (Procter and Gamble) had an audit by consulting firm White Ops into digital ad fraud. Procter and Gamble realised from this audit that they didn’t have AdFraud handled as well as they thought. P&G is the largest advertisers in the world, so AdFraud has a huge effect on them.
P&G have gone as far as giving rules for agencies and AdTech firms if they want to get paid – or they will simply move their business elsewhere. Proter and Gamble have the financial muscle to do this and make agencies respond.
“So we are now poring over every agency contract for full transparency by the end of 2017 to include terms requiring funds to be used for media payment only, all rebates to be disclosed and returned, and all transactions subject to audit,”
China – Huge Ad Fraud Market
China has a $27 billion digital ad industry and fraud rates of up to 40% according to eMarketer. Ad fraud can range from 20-40%, with some days 70-90% of traffic has looked suspicious. The internet system in China is unique to other markets which make the problem harder to detect.
Two recommended ways that brands can avoid ad fraud in China:
- Fraud detection solutions used throughout the whole campaign
- An ‘always-on’ approach to monitoring. As some firms just act clean when being monitored and revert to old tactics when they aren’t
What should advertisers do with their budgets?
With ad fraud, the hate group associations and ad blockers creating a somewhat crisis in the advertising industry, influencer marketing seems to remain to be the safest place for companies to place their advertising budgets. And that explains the shift in companies opting for influencer marketing. Nonetheless, influencer marketing is at an awkward stage. Many companies and agencies are unknowingly collaborating with influencers that aren’t actually influential. Simply selecting influencers with the most likes, comments or shares is not enough when it comes to identifying effective influencers. And that is why we have developed an effective way of actually identifying high-performing PMYB Chromo-Influencers®. Get in touch here and we will educate you on how to do so free of charge.