Online Advertising Fraud Reaching Astronomical Proportions

Major portion of all online advertising is ad fraud!

No honor among thieves. 

Take the JP Morgan Chase, for example. Chase advertised on 400,000 sites. Then on just 5,000, or only one percent of the sites. No change, same results!

“As of a few weeks ago, advertisements for JPMorgan Chase were appearing on about 400,000 websites a month.”

“Now, as more and more brands find their ads popping up next to toxic content like fake news sites or offensive YouTube videos, JPMorgan has limited its display ads to about 5,000 websites it has preapproved, said Kristin Lemkau, the bank’s chief marketing officer. Surprisingly, the company is seeing little change in the cost of impressions or the visibility of its ads on the internet, she said. An impression is generally counted each time an ad is shown.”

Bot-driven traffic, pixel-stuffing, ad stacking, other tricks, kickbacks and outright fraud

With bot-driven traffic, pixel-stuffing and other tricks, kickbacks and outright fraud, on top of the fact that less than 50% of all online ads may even have a chance to be seen by a real human being, the online advertising market is like a house of cards that is ready to topple—or a tiny child’s bicycle being ridden by dozens of clowns, all perched on each others’ shoulders. How long before it collapses completely?

“… hackers reportedly built a click-fraud machine that stole up to $5 million daily from top advertisers and publishers. But even that is just the tip of the iceberg when it comes to online ad fraud.”

“Estimates are that billions of dollars are lost annually because of fraudulent clicks, fake traffic, and other scams. But because of the way the online-advertising market is structured, with several layers of middlemen and ad networks, there is little incentive to stop it.”

Straight-up fraud

There is lots of money to be made in purposefully creating fraudulent impressions to steal ad dollars. Recently, a fake web trafficker came clean on the gory details. People will hide ads behind other ads, spoof their domain to trick ad networks into serving higher-paying ads on their site, and purposefully send bots to a site to drive up impressions.  Wenda Millard, president of MediaLink, claims that 25% of the entire online ad market is fraudulent. The end result is lots of traffic and lots of inaccurate measurement.
Most ad networks do want to control this, but with hundreds of thousands of sites involved, it’s impossible to police everyone. What you’re left with are some staggering numbers.

We start with the notion that only 15% of impressions ever have the possibility to be seen by a real person. Then, factor in that 54% of ads are not viewable (and we already discussed how flawed that metric is), and you’re left with only 8% of impressions that have the opportunity to be seen by a real person. Let me clarify: that does not mean that 8% of impressions are seen. That means only 8% have the chance to be seen. That’s an unbelievable amount of waste in an industry where metrics are a major selling point.

Click Fraud and Click Farms

Actually, those 8% of impressions are seen by a real person. They are seen by high school students and low-wage workers, operating from “click farms” who have no actual interest in the target of the ad’s link, but repeatedly click on each AdSense ad making a few dollars for each thousand or so clicks, and generating millions of dollars for Google, Facebook…

Related Links:

• Are Bots Hijacking Your Marketing Budget?
• The Definition Of An Ad Impression
• A Dangerous Question: Does Internet Advertising Work at All?

• There’s a ticking time bomb inside the online advertising market

• Ad fraud is costing the U.S. marketing and media industry an estimated $8.2 billion each year, according to the Interactive Advertising Bureau’s first study on the cost of the problem.