There are many forms of digital ad fraud. Some are easy to commit, others are harder to commit. But bad guys skim value from every part of the value chain.

1. Types of Digital
Ad Fraud
Dr. Augustine Fou
http://linkd.in/augustinefou
June 2014
- 1 - Augustine Fou

2. Display Ad Fraud
Normal display ads Fraudulent display ads
• Loaded on sites that no
human users go to
• Not viewable, not-in-view
• More than 5 ads on a
page
• Ad impressions
generated by bot (not
human)
- 2 - Augustine Fou

3. Ad Injection
Source:
http://adage.com/article/digital/bi
g-ad-injection-scheme-hits-target-
youtube-walmart/293088/
Target ad on top of
Walmart.com
“Those behind this operation go by the name 215 Apps, sometimes
known as Engaging Apps. They've built a network of browser extensions
that promise consumers some sort of benefit, such as the ability to
download streaming videos, but inject ads into sites across the web.”
- 3 - Augustine Fou

4. Search Ad Fraud
fake site that
serves search ads
buy eye cream online
(expensive CPC keyword)
search ad served,
fake click
Olay.com ad
in #1 position
redirect through to
desination page
Destination page
fake source declared
- 4 - Augustine Fou

5. Video Ad Fraud
Normal video ads (pre-roll) Fraudulent video ads
• Not skippable
• Auto-played
• Played in-banner
• Not viewable
• Video ad impressions
generated by bot (not
human)
- 5 - Augustine Fou

6. History Injection
Source: http://searchengineland.com/g
oogle-to-take-action-against-fake-search-
results-injected-into-browser-history-
166770
“The technique uses a method of
detecting a click on the browser’s
back button. When clicked, a
user is not sent back to the page
they came from, i.e. the search
results, but rather a page that
looks like search results.”
- 6 - Augustine Fou

7. Lead Fraud
Fake leads
• Previously filled out by hand
• Now, fully automated with
bots using databases of real
postal addresses, etc. (that
trick verification engines)
- 7 - Augustine Fou

8. Affiliate Sales Fraud
“eBay paid Hogan a staggering $28
million in affiliate marketing sales
commissions over the years,
according to court papers.”
Source: http://www.businessinsider.com/eba
y-the-fbi-shawn-hogan-and-brian-dunning-
2013-4#ixzz34WHjnefM
Source:
http://articles.latimes.com/2013/apr/19/bus
iness/la-fi-mo-cookie-stuffing-ebay-
20130419
“Laguna Niguel man pleads guilty
in 'cookie stuffing' scam against
Ebay. The online auctioneer paid
Dunning’s company about $5.2
million in 2006 and 2007, the U.S.
Attorney said.”
Keywords: cookie stuffing
- 8 - Augustine Fou

9. Why Now?
- 9 - Augustine Fou

10. “Digital ad fraud is well known and well
documented. However, the magnitude of it
may not yet be well understood.
Furthermore, ‘industry constituencies
[may be] insufficiently motivated’ (Source:
IAB) to act ferociously to deter and reduce
these fraudulent activities.”
-- Dr. Augustine Fou
LinkedIn Post: The Three Reasons Ad Fraud Seems So
Overwhelmingly Large Now
- 10 - Augustine Fou

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

12. 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
- 12 - Augustine Fou

13. The Size of the
Fraud Problem
- 13 - Augustine Fou

14. Main Types of Digital Ads
Impressions
(CPM/CPV)
Clicks
(CPC)
Leads
(CPL)
Sales
(CPA)
• Display ads
• Video ads
• Social display
• Mobile display
• Search ads
• Mobile search
• Affiliate
revenue share
• Completed
lead forms
sold on cost-per-
lead basis
- 14 - Augustine Fou

15. Digital Ad Spend (IAB FY 2013)
CPM Performance
Impressions
(CPM/CPV)
Clicks
(CPC)
Leads
(CPL)
Sales
(CPA)
Search 43%
$18.5B
Display 19%
$8.2B
Video 7%
$3.0B
$6.5B
NOTE: figures from IAB FY 2013
($43B 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, FY 2013 Internet Advertising Report, April 2014 $36.2B
- 15 - Augustine Fou

16. Buckets of Ad Fraud
Impressions
(CPM fraud)
Botnets
generate fake
pageviews
which produce
ad impression
“inventory” that
is sold into ad
exchanges.
Clicks
(CPC fraud)
Leads
(CPL fraud)
Sales
(CPA fraud)
Bots type
search queries
to bring up
search ads and
then click on
the ads to earn
share of CPC.
Bot or low
wage workers
fill in lead
forms with real
addresses and
get paid bounty
per lead.
Fake sites set
up to do cookie
stuffing or trick
users to click
on affiliate
links to earn rev
share.
- 16 - Augustine Fou

17. Digital Ad Fraud Estimates
Impressions
(CPM/CPV)
Clicks
(CPC)
Search
$18.5B
Display
$8.2B
Video
$3.0B
$2.8B $3.7B
Mobile
$36.2B 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
- 17 - Augustine Fou

18. 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
- 18 - Augustine Fou
@acfou