Digital Ad Fraud estimates vary widely based on the methodology used to detect and the rounding and estimating of what can be considered "fraud" or "suspicious" ads. Regardless of the methodology, the size of the fraud is large and needs to be addressed by the industry as a whole.

1. Digital Ad Fraud Estimates
Impressions
(CPM/CPV)
Clicks
(CPC)
Search
$18.1B
Display
$8.0B
Video
$2.9B
$2.8B $3.5B
Mobile
$35.5B Ad Spend
Avg Fraud Rate Dollars
Display 50% $4B
Video 60% $2B
Mobile 40% $2B
Search 30% $6B
TOTALS 39% $14B
(U.S. digital ad spend only)
Multiple sources, see Appendix
- 1 - Augustine Fou

2. Ad Fraud Ranges
• Display ad fraud fake ad
impressions created by bots
• Video ad fraud fake video ad
views generated by bots
• Mobile ad fraud fraudulent
or accidental clicks
• Search ad click fraud click
fraud on search ads
Range Average Dollars
30-70%
50-80%
50%
60%
30-50% $2-3B
20-40%
$3-7B
$1-2B
$4-8B
(U.S. Only)
40%
30%
- 2 - Augustine Fou

3. Range of Ad Fraud Estimates
DSPs/Networks Security Vendors
3%
Dstillery, Oct 9, 2014
“findings from two independent third parties,
Integral Ad Science and White Ops”
3.7%
Rocket Fuel, Sep 22, 2014
“Forensiq results confirmed that ... only 3.72%
of impressions categorized as high risk.”
57%
Telemetry, May 26, 2014
“Telemetry found that 57 per cent were “viewed” by
automated computer programs rather than real people.”
25 - 50%
WhiteOps, Jul 14, 2014
“digital ad fraud outbreak – one that gobbles up
roughly $14 billion in advertising spend and between
25 and 50% of ad spend per campaign”
45%
Solve Media, Sep 19, 2014
“suspicious web activity dropped to 45% – still a high
figure, but an improvement nonetheless from the high
of 61% in Q4 2013”
- 3 - Augustine Fou

4. As more digital
ads are placed
entirely
programmatically,
the opportunity for
fraud continues to
increase.
The Opportunity
- 4 - Augustine Fou

5. The Motive
“Highly Lucrative, Profitable
The aggregate ad revenue for the
sample of 596 sites was an estimated
$56.7 million for Q3 of 2013,
projecting out to $226.7 million
dollars annually, with average profit
margins of 83%, ranging from 80%
to as high as 94%.”
Source: Digital Citizens Alliance Study,
Feb 2014
- 5 - Augustine Fou

6. Bot vs Human Web Traffic
Nea3r9l%y h6u2m%an bot
61% bot traffic
51% suspicious
22-29% confirmed bot
Source: Incapsula 2013 Source: Solve Media Dec 31 2013
- 6 - Augustine Fou

7. Digital Ad Spend (IAB H1 2013)
CPM Performance
Impressions
(CPM/CPV)
Clicks
(CPC)
Leads
(CPL)
Sales
(CPA)
Search 43%
$18.1B
Display 19%
$8.0B
Video 7%
$2.9B
$6.5B
NOTE: revenues annualized from
actual 1H 2013 figures from IAB
(assumes $42B annual ad spend)
Lead Gen 4%
$1.7B
11% Other
$4.8B
$2.8B $3.7B
Mobile 15%
• classifieds
• sponsorship
• rich media
• email
Source: IAB, 1H 2013 Digital Advertising Report, Oct 2013 $35.5B
- 7 - Augustine Fou

8. Reported Cases
- 8 - Augustine Fou

9. Ad Budgets Spent on Porn Sites
A large British packaged goods
company that sells several household
name brands in the U.S. was defrauded
of $488,000 when its $10,000-a-day
video ad budget was spent on a network
of junk web sites, according to
an internal document leaked to
Business Insider.
Source:
Business
Insider
December
2013
- 9 - Augustine Fou

10. Stealing $6 Billion From Brands
Online Ad Fraudsters Are Stealing $6
Billion From Brands
Security firm White Ops claims 1 in 6
PCs infected by bots By Mike Shields
Source:
Adweek,
October
2013
- 10 - Augustine Fou

11. 20-30% of Display is Fraudulent
Fraud is endemic across today’s display advertising
ecosystem. Luttrell estimates 20 to 30% of display ad
inventory is fraudulent. For an empirical counterpoint,
the Chameleon botnet spanned all the major US ad
exchanges at the time of disclosure and was driving
enough fake traffic—on its own—to account for 30% of
the display ad inventory sold through one of these
major exchanges. The Chameleon botnet is not unique.
For example, we will shortly be disclosing details of a
second major botnet, with a distinct signature, targeting
a distinct cluster of websites. Botnet traffic is also not
just limited to fraudulent publishers. We have come to
understand that the Chameleon botnet, for example, has
supplied traffic both to the website of one of the most
highly regarded US newspapers and also to the websites
of one of the world’s largest online media companies.
Source:
AdExchanger
April 2013
With display ad
spend at $8B, that
is $2-3B of fraud
- 11 - Augustine Fou

12. Online fraud costs e-retailers $3.5B
Online fraud costs e-retailers $3.5
billion in 2012
CyberSource’s annual report notes an
average fraud rate of .9% of online
revenue.
Source:
Internet
Retailer,
March 2013
- 12 - Augustine Fou

13. Dr. Augustine Fou – Digital Consigliere
“I advise clients on optimizing
advertising across all channels. One
main area of focus is reducing ad waste
due to fraud – fake impressions, clicks,
leads, and sales.”
FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM)
MCKINSEY CONSULTANT
CLIENT SIDE / AGENCY SIDE EXPERIENCE
PROFESSOR AND COLUMNIST
ENTREPRENEUR / SMALL BUSINESS OWNER
PHD MATERIALS SCIENCE (MIT '95) AT AGE 23
ClickZ Articles: http://bit.ly/augustine-fou-clickz
Slideshares: http://bit.ly/augustine-fou-slideshares
LinkedIn: http://linkd.in/augustinefou
- 13 - Augustine Fou
@acfou

14. Related Articles
Fake YouTube Videos
By: Augustine Fou, December 2013
Motive and Opportunity for Ad Fraud
By: Augustine Fou, February 2014
Fake Facebook Profiles
By: Augustine Fou, Dec 2013
Fake Twitter Accounts
By: Augustine Fou, August 2013
Display Fraud 101 (video)
By: Augustine Fou, Feb 2014
ROI Case for Solving Ad Fraud
By: Augustine Fou January 2014
Digital Ad Fraud Briefing
By: Augustine Fou December 2013
How Display Fraud Works
By: Augustine Fou, May 2013
How Click Fraud Works
By: Augustine Fou, November 2013
The Magnitude of Digital Ad Fraud
By: Augustine Fou, November 2013
- 14 - Augustine Fou

15. APPENDIX
- 15 - Augustine Fou

16. Digital Ads by Format
Source: IAB, 1H 2013 Digital Advertising Report, Oct 2013
- 16 - Augustine Fou

17. Pricing Model Trends
Source: IAB, 1H 2013 Digital Advertising Report, Oct 2013
- 17 - Augustine Fou