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Context of Fraud in Digital Advertising Ecosystem
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Context of Fraud in Digital Ad Ecosystem April 2017 Augustine Fou, PhD. acfou [at] mktsci.com 212. 203 .7239
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Transcript of Context of Fraud in Digital Advertising Ecosystem
Context of Fraud in Digital Ad Ecosystem
April 2017Augustine Fou, PhD.acfou [at] mktsci.com 212. 203 .7239
Industry Context
April 2017 / Page 3marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
$83B digital spend (2017)Total digital opportunity: search + display
Source: eMarketer March 2017
Search Spend$40 $40
Display Spend Other
$16$30
$3
Google Search FB Display
$4E $11E
display spend left for good publishers
CPC Fraud
$5 Google Display
CPM Fraud
(75% of search) (40% of display)
$8$6
60% fraud
$29(outside Google/Facebook)
Source: eMarketer March 2017
• $7.2B out of $12B (2016)• $11B out of $19B (2017)
40%
$33 programmatic$24 private exchange$9 open
April 2017 / Page 4marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
“sites that carry ads”
Top good domains vs “sites that carry ads”
Source: Verisign, Q4 2016329M
domains
$80B search + display
Google Search
FB+GOOG Display
$29billion
“mainstream sites you’ve heard of”
WSJESPN
NYTimes
EconomistReuters
Elle
top 1 million + next 10 million
159 million unknown sites
100% botpageviews on
“fraud sites”
99% human pageviews are on
“sites you’ve heard of”
3%
carry adsno ads
April 2017 / Page 5marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
Display opportunity for good publishersAd
verti
sers
Publishers are left with 30%
Bad Guyssiphon dollars OUT of the ecosystem
30% ($6B)
60% ($11B)
Ad Blockingusers use ad blocking to
protect themselves
10% ($2B)
Ad Tech“plumbing” and verification
Source: The Guardian, Oct 2016
$5B to Google Display
$16B to Facebook Display
Display Spend $
40B
Disp
lay
Spen
d
Fraud comes in large numbers
April 2017 / Page 7marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
Example – 92% impressions cleaned up
Increased CPM prices by 800%
Decreased impression volume by 92%
Source: http://adexchanger.com/ad-exchange-news/6-months-after-fraud-cleanup-appnexus-shares-effect-on-its-exchange/
260 billion
20 billion
> $1.60
< 20 cents
April 2017 / Page 8marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
Single botnet steals 15% of video ad spend
Source: Dec 2016 WhiteOps Discloses Methbot Research
“Methbot, steals $2 billion annualized; and it avoided detection for years.”
1. Targeted video ad inventory$13 average CPM, 10X higher than display ads
2. Disguised as good publishersPretending to be good publishers to cover tracks
3. Simulated human actionsActively faked clicks, mouse movements, page scrolling
4. Obfuscated data center originsData center bots pretended to be from residential IP addresses
April 2017 / Page 9marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
40-50% web traffic is NHT (Non-Human Traffic)Distil Networks March 2017 – 39% botsIncapsula Dec 2016 – 52% bots
“The equation of ad fraud is simple: buy traffic for $1 and sell ads for $10
you make $9 of pure profit.”
Main targets of ad fraud
April 2017 / Page 12marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
CPM and CPC buckets are most targetedLeads
(CPL)Sales
(CPA)
Lead Gen$2.0B
Other$5.0B
• classifieds• sponsorship• rich media
Impressions(CPM/CPV)
Clicks(CPC)
Search 27%Display 10%
Video 7%
60% fraud 40% fraud
80% fraud
Mobile 47% 50% fraud
91% digital ad spend Source: IAB 1H 2016 Report
mobile display mobile search
April 2017 / Page 13marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
Two key ingredients of CPM and CPC Fraud
Impression (CPM) Fraud
(includes mobile display, video ads)
1. Put up fake websites and load tons of ads on the pages
Search Click (CPC) Fraud
(includes mobile search ads)
2. Use fake users (bots) to repeatedly load pages to generate fake ad impressions
1. Put up fake websites to participate in search networks
2. Use fake users (bots) to type keywords and click on them to generate the CPC revenue
screen shots of fake sites
Fake Websites(cash-out sites)
April 2017 / Page 15marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
99% human pageviews on “sites you’ve heard of”
100% botpageviews on
“fraud sites”
99% of human pageviews are on
“sites you’ve heard of”
“real content that real humans want to read”
WSJESPN
NYTimes
1% of human pageviews are on
“long tail sites”
“niche content that some humans want
to read”
top 1 million sitesnext 10 million sites318 million sites
Verisign reports 329 million domains registered by Q4 2016Source: http://www.verisign.com/en_US/domain-names/dnib/index.xhtml
Source: DCN/ WhiteOps 2015
Source: Distil Networks 2017
April 2017 / Page 16marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
Countless fake sites, humans never visitIdentical sites
made by templateAlphanumeric
domains
100% bot traffic“fraud sites”
Source: Sadbottrue.com
Fake Visitors(bots)
April 2017 / Page 18marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
Bots are automated browsers used for fraud
Headless BrowsersSeleniumPhantomJSZombie.jsSlimerJS
Mobile Simulators35 listed
April 2017 / Page 19marketing.scienceconsulting group, inc.
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Bots range in sophistication, and therefore cost
Javascript on page or scripts
Sophisticated (29%)Moderate (46%)Simple (25%)Headless browsers
in data centersMalware on humans’ devices (residential)
Less sophisticated More sophisticated
Source: AdAge/Augustine Fou, Mar 2014 Source: Forensiq Source: Augustine Fou, Oct 2015
“official industry lists catch NONE of these bots”
1 cent CPMs 10 cent CPMs 1 dollar CPMsSource: Distil Networks 2017
April 2017 / Page 20marketing.scienceconsulting group, inc.
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Mobile fraud doesn’t even need botsBad apps load tons of impressions in background
Source: Forensiq
Fake mobile devices install apps and interact w/ them
Download and Install
Launch and Interact
Directly measured examples
April 2017 / Page 22marketing.scienceconsulting group, inc.
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Some campaigns have very little humans (blue)Phone calls as conversion events
Comparing five paid display sources
April 2017 / Page 23marketing.scienceconsulting group, inc.
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More humans means better outcomesMeasure
AdsMeasure Arrivals
Measure Conversions
more humans (blue)good publishers
low-cost media, ad exchanges
346
1743
5
156
30X better outcomes
• More arrivals• Better quality
A
B
April 2017 / Page 24marketing.scienceconsulting group, inc.
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About the AuthorApril 2017Augustine Fou, PhD.acfou [at] mktsci.com 212. 203 .7239
April 2017 / Page 25marketing.scienceconsulting group, inc.
linkedin.com/in/augustinefou
Dr. Augustine Fou – Independent Ad Fraud Researcher2013
2014
Follow me on LinkedIn (click) and on Twitter @acfou (click)
Further reading:http://www.slideshare.net/augustinefou/presentationshttps://www.linkedin.com/today/author/augustinefou
2016
2015
April 2017 / Page 26marketing.scienceconsulting group, inc.
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Harvard Business Review – October 2015
Excerpt:
Hunting the Bots
Fou, a prodigy who earned a Ph.D. from MIT at 23, belongs to the generation that witnessed the rise of digital marketers, having crafted his trade at American Express, one of the most successful American consumer brands, and at Omnicom, one of the largest global advertising agencies. Eventually stepping away from corporate life, Fou started his own practice, focusing on digital marketing fraud investigation.
Fou’s experiment proved that fake traffic is unproductive traffic. The fake visitors inflated the traffic statistics but contributed nothing to conversions, which stayed steady even after the traffic plummeted (bottom chart). Fake traffic is generated by “bad-guy bots.” A bot is computer code that runs automated tasks.
