The advent of malware-laden botnets has substantially impacted advertisers’ revenues in recent years, as bad actors were able to infiltrate advertising networks or pose as publishers to exploit the cost-per-click advertising model. Fraudsters have also been targeting mobile ad networks and video platforms with server side attacks, so click fraud remains a consideration across all devices.
Forbes contributor Clem Chambers, CEO of stocks and investment website ADVFN, recently compared click fraud with “drug baron scale criminality.” He estimated that a fraud rate even as low as 2 percent on a very large advertising network can net $200,000,000. Higher fraud rates found by traffic quality management vendors conjure up the appearance of a “Madoff” scale scam, Chambers said.
“Chameleon,” one particularly insidious botnet that was recently uncovered by researchers at Spider.Io, infected over 120,000 desktops in the U.S. and fraudulently obtained more than $6 million in payouts from advertisers within a single month. Additionally, SophosLabs found that a botnet called ZeroAccess obtained $3 million per month. Even top brands such as Facebook and Google have fallen prey to this criminality.
Fortunately, stakeholders – including ad networks, advertisers, brands, and publishers – have a keen understanding of the scope of the problem. New validation technologies, human intelligence and the improved security of smart devices have helped turn the tables on fraudsters. A well-trained watchful eye and technology have given advertising networks the capacity to readily identify and prevent fraud.
Even still, it’s important for advertisers and marketers to evaluate an advertising network’s capabilities when running both display ads and especially videos campaigns. The following checklist can serve as a handy reference to compare ad networks:
- What sites is the ad network comprised of? Is there a mix of top quality and niche sites?
- Do they have standards in place before allowing sites to join their network?
- What process do ad networks use to scrub traffic? Do they have an on-site ad ops team?
- What is the contingency plan if bad traffic is detected?
- Is the network a participating member of the Interactive Advertising Bureau or the Network Advertising Initiative?
- Is the network vertically aligned so I can target to be industry specific or is the only option to advertise across the network?
- Does the network have reporting available and accessible to me? What transparency do I have into site refers?
- What technology do they use to target my ads?
- Does the network have examples of where their current ad inventory is running?
- Can I talk to a human if I need support?
Fraud is inevitable but if advertising networks are effectively handling the problem, an advertiser should not be encountering the types of losses outlined above, which is becoming increasingly important when it comes to online video campaigns in particular. Performing due diligence when selecting an ad network goes beyond trusting brand reputation. These questions should be easily answerable and only generate more confidence in the service.