Bots are used for everything from generating fake traffic and pageviews, to typing in search terms, and to clicking on search ads.

1. Augustine Fou- 1 -
Dr. Augustine Fou
http://linkd.in/augustinefou
November 2013
How Bots Are Used
in Ad Fraud

2. Augustine Fou- 2 -
Make Fake Websites
Bots are used generate fake websites using plagiarized content
and stuffed full with ads.
http://www.google.com/insidesearch/howsearchworks/fighting-spam.html

3. Augustine Fou- 3 -
Make Fake Traffic
Bots are used to load pages with lots of display ads on them, to
generate “impression inventory” that is sold to ad exchanges.
Source: Alexa
Source: Quantcast

4. Augustine Fou- 4 -
Generate Ad Views
http://interiorcom plex.com/
http://modernbab y.com/
Bots load page repeatedly to
generate ad impressions

5. Augustine Fou- 5 -
Fake Mobile Traffic
While “mobile” is more likely to be human, there is no guarantee!

6. Augustine Fou- 6 -
Fake Searches / Clicks
“vacuum cleaner” keyword
Walmart search ad
Bot clicks through
to walmart.com

7. Augustine Fou- 7 -
Solve Captchas
Source: Business Insider October 28, 2013
A captcha is difficult for most computers to solve because it distorts letters
and numbers in unusual ways, says Vicarious co-founder Scott Phoenix.
Humans use their powers of perception to see a "m and o" with a line through
it and still read the word "morning."
"We picked CAPTCHA to solve because it was explicitly designed to be
impossible for computers to solve. If you're trying to build artificial
intelligence, CAPTCHA a great test," Phoenix says.

8. Augustine Fou- 8 -
Ad Fraud Value Chain
impressions
clicks
leads
Networks of algo-generated
content sites that attract free
organic search traffic
Botnets generate fake pageviews
which produce ad impression
“inventory” (get paid for CPM)
Fake leads (get paid for CPL minus cost of
filling out lead forms)
Click farms generate fake clicks (get
paid for CPC)
sales
Fake sales via affiliate revenue shares; money
laundering, especially on digital goods/subscriptions

9. Augustine Fou- 9 -
Bad Guys Make Money
At every stage of the value chain
• CPM impression fraud estimated to be $3 - $7 billion
per year (18.9% total digital ad spending)
• CPC click fraud estimated to be $5 billion per year
(13.5% total digital ad spending)
• Lead Fraud – fake forms filled by hand or by bot
• Affiliate Rev Share Fraud – plant cookies and get rev
share

10. Augustine Fou- 10 -
Digital Ad Fraud Estimates
Impressions
(CPM/CPV)
Clicks
(CPC)
Search
$18.5B
$36.2B Ad Spend
Display
$8.2B
Video
$3.0B
Mobile
$3.7B$2.8B
(U.S. digital ad spend only)
DollarsAvg Fraud Rate
$4B50%Display
$2B60%Video
$6B30%Search
$2B40%Mobile
$14BTOTALS 39%
Multiple sources

11. Augustine Fou- 11 -
Digital Ad Spend (IAB FY 2013)
Impressions
(CPM/CPV)
Clicks
(CPC)
Leads
(CPL)
Sales
(CPA)
Search 43%
$18.5B
Video 7%
$3.0B
Lead Gen 4%
$1.7B
11% Other
$4.8B
Source: IAB, FY 2013 Internet Advertising Report, April 2014
$36.2B
Display 19%
$8.2B
Mobile 15%
$3.7B$2.8B
NOTE: figures from IAB FY 2013
($43B annual ad spend)
CPM Performance
• classifieds
• sponsorship
• rich media
• email
$6.5B

12. Augustine Fou- 12 -
Related Articles
Bad Guys Happily Rob Display Advertisers
By: Augustine Fou, July 23, 2012
Everything Fake (Display Ad Fraud, Search Click Fraud)
By: Augustine Fou, April 2013
Blacklisting vs Whitelisting
By: Augustine Fou, October 2013
Fake Profiles on Facebook
By: Augustine Fou, July 2013
How Display Ad Fraud Works
By: Augustine Fou, May 2013
Augustine Fou- 12 -

13. Augustine Fou- 13 -
Dr. Augustine Fou – Digital Forensics
“I advise clients on optimizing
advertising across all channels. The most
direct path to improving ROI is reducing
waste due to ad fraud. I use technical
forensic techniques to help clients detect
and mitigate digital ad fraud.”
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
@acfou
ClickZ Articles: http://bit.ly/augustine-fou-clickz
Slideshares: http://bit.ly/augustine-fou-slideshares
LinkedIn: http://linkd.in/augustinefou