November 14, 2013

The Scam What Am


For several months, the Investigative Helicopter Team here at The Ad Contrarian Global Headquarters has been writing about the masssive fraud being perpetrated on online advertisers (here, here, here, and here.)

This week, Jack Marshall of Digiday has a great interview with a former online scam artist -- oops, I mean publishing executive -- who tells his story. You can read the whole thing here.

Here are some of the highlights:

- Why he bought traffic he knew was fraudulent:
"As a website running an arbitrage model, all that mattered was profit, and for every $0.002 visit we were buying, we were making between $0.0025 and $0.004 selling display ads through networks and exchanges."
- How did he know it was bots, not humans, he was buying?
"When we told them we were looking for the cheapest traffic we could possibly buy there would be sort of a wink and a nod, and they’d make us aware that for that price the traffic would be of “unknown quality”... You can tell it’s bot traffic just by looking at the analytics."
- Do publishers know they're engaged in fraud?
"Publishers know... Any publisher that’s smart enough understand an arbitrage opportunity is smart enough to understand... What we were doing was 100 percent intentional. Some articles revolving around bot traffic paint publishers as rubes who were duped...I believe publishers are willing to do anything to make their economics work. "
- On networks and ad exchanges:
"We worked with a major supply-side platform partner that was just wink wink, nudge nudge about it. They asked us to explain why almost all of our traffic came from one operating system and the majority had all the same user-agent string. There was nothing I could really say.... It was their way of letting us know that they understood what was going on... It was people at the highest levels in the company... In theory they maintain the quality of their traffic. In reality they just turn a blind eye."
 - How widespread is the fraud?
"...there are a lot of people who knowingly do it....There are so many ways they could police this, but the incentive just isn’t there."
I've always found that the ad industry atracted a certain kind of harmless bullshit artist whose assertions were so obviously self-serving and unreliable that no one with an ounce of grey matter would take them seriously.

Apparently I am wrong. We seem to have a large group of online buyers and sellers who are willfully buying and selling fraudulent merchandise. By keeping one step away from the smoking gun, they believe they are able to maintain deniability. Time will tell. Sooner or later, if the foundation is dodgy the house comes tumbling down

It's a rotten, dirty game and ignorant advertisers are getting skinned alive.

The amazing thing is that no one's been arrested or fired.

5 comments:

Sonny said...

Fraud has been a part of our industry for a long time. If you have seen presentations from ABC (Audit Bureau of Circulation) on coupon fraud you’d know that there is not much that can be done by law enforcement when agencies or advertisers don't want to prosecute. It sets precedence for future litigation. If the ad industry does not act it will be difficult to impossible down the road.

Cecil B. DeMille said...

I've always said that it was only a matter of time until those who once sold the snake oil found there way into line to buy it.


Apparently while the accountants were tearing the creative heart out of the business, they gave it a shot to the ethical nuts as well.

Jim Powell said...

The ponzi scheme continues.

Cecil B. DeMille said...

Their, not there. Fuck you, autocorrect!


I don't know whether I'm more ashamed of the error or the fact that I was commenting from a mobile phone.

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