September 16, 2013

Online Ad Criminals

On June 17th, we published a piece called The $7.5 Billion Ad Swindle. It was about the massive fraud that is being perpetrated on advertisers by criminality within the online advertising industry.

A new report by Solve Media indicates that the fraud is growing at an alarming rate. According to an Adweek piece last week, in just 3 months the size of the fraud has jumped to about $9.5 billion this year (by the way, kudos to Mike Shields of Adweek who won't let this story go away.)

In the first quarter of 2013, Solve reports that the amount of suspicious web advertising traffic has risen from 43% to 46%. That means that 46% of the viewership reported by websites seems to be fraudulent. It is not people. It is computer programs (bots) pretending to be people to drive up the numbers and screw advertisers out of billions of dollars.

Not only that, suspicious advertising traffic has also started to rear its ugly head big time on mobile sites. Over 1/3 of mobile traffic during this time period was suspicious.

As the problem becomes more severe, the silence from online publishers, ad networks, and agencies remains deafening.

Just like 15 years ago when everybody was soaking the dot-com clowns for all they were worth, nobody wants to kill the golden goose. When corporate management finally figures out how their money is being pissed away, CMO heads will roll and agencies will be fired.

Until then, nobody seems to care that half of online ad money is being stolen by con men and swindlers. The insane naivete and cluelessness that has permeated the whole online advertising enterprise since its inception is still shocking.

Now it has taken a new form. Not only are marketers ignoring the awful truth about the ineffectiveness of online advertising, they are turning a blind eye to the fact that they are being skinned alive by crooks and their willfully corrupt accomplices in the ad world.

And if you think the fraud in the U.S, is bad, get a look at these numbers from some other countries. According to Solve...
  • 92% of web traffic in China is suspicious
  • 80% of Venezuela's web traffic is suspicious
  • 77% of web traffic in the Ukraine is suspicious
  • In Singapore 86% of mobile traffic is suspicious
The irony in all this is that the web was supposed to make advertising so much more accountable by giving us accurate tracking of advertising traffic. Well, they were right about one thing. It's being tracked. And what the tracking has revealed is the likelihood that there is an astounding amount of criminal activity at work.

Fortunately for the thieves, charlatans, and hustlers, nobody seems to give a shit.


Dan Plant said...

I'm always intrigued by these articles, as it gives me plenty of ammunition to challenge the status quo in my industry. However, for me to act on this particular information I really need to understand better who is actually selling this bogus inventory. Are we saying that online publishers are buying/creating fake visits and then knowingly selling them on at a mark-up? Is it the remnant inventory networks that are creating the false traffic?

This information is vital and the report by Solve media doesn't really help here. They also have a vested interest in proving that the majority of web traffic is suspect - that's not to say I don't believe it is, but unless Solve can tell me how to identify which half is legit then I'm not likely to trust their own inventory.

Cecil B. DeMille said...

There are so many problems with advertising right now. Our industry as a whole is undergoing a very painful battle for its soul. The reason no one gives a shit about this is because the corporate masters running our industry now have a vested interest in the status quo. They're making money off it. So it won't change.

Viva la revolution, baby. It's the only way.

Steve said...

This problem occurs when you're buying blind through a network or trading desk unrestricted and perhaps using real time buying. In practice the vast majority of the display media bought in the UK through major agencies is bought on IO with very heavily trafficked sites whose traffic figures are either audited or corroborated by 3rd party tools and panel data. Trading desks will work to using an approved list of sites. Much of what we buy that falls outside this is based on bought audiences with other non-ad based data, behavioural targeting where we're tracking a user's bahviour online or retargeting - in all cases extremely unlikely to be a bot. Everything we do used ad verification technology which doesn't defeat a bot, but does reassure that we bought what we thought we did. I speak only for the UK and have no idea what goes on in the US or elsewhere in the world - but if you're buying through a reputable UK agency, I'd say it's a safe bet you're buying exactly what you were sold.

Jim said...

Imagine if they didn't have the fraud going on - it would look awful.

Heather Physioc said...

For direct response lead gen and ecommerce, a CPA model makes way more sense than just impressions (a garbage metric) and clicks (questionable metric at best). But of course a CPA arrangement is extremely hard to come by, because vendors don't want to be held accountable for the traffic we spend our money on.

Sean Peake said...

Dan, it's like the old saw: "Half the money I spend on advertising is wasted; the trouble is I don't know which half."

Jim said...

Like anyone knows it is 50%. Wishful thinking I expect.

paulbenjou said...

Someboty is clicking at your site.

Terry said...

Something I listened to yesterday that you might like Bob. And definitely apropos to this conversation -

Their description of the segment - How did ad blockers become bouncers at our online party? And why are they letting some ads through?


Alain Bransford said...

But, don't CAPTCHA and Mollom help weed out spammers and bots? What exactly is the solution to this problem if other software are unable to combat it?

lafeber said...

Every now and then I see an article like this and I'm reminded that people actually advertise on the internet. Love my adblock plugin.

sofia sana said...

true fact...

Not only are marketers

ignoring the awful truth about the

ineffectiveness of online advertising,

they are turning a blind eye to the fact

that they are being skinned alive by crooks

and their willfully corrupt accomplices

in the ad world.

It´s good,

Is this


marketing strategies

Dale Cooper said...

In a world when inventory can easily be created (automation and syndication) and so can visitors/followers/fans (bots etc) its hardly surprising. Either brands 'want' to believe the figures and agencies have nothing to lose by telling the truth - 'your ad was only seen by x% of real humans. Not a great situation