Sophisticated Cyber Criminals Cost Brands Billions

Advertising fraud is a lot like the arcade game Whac-A-Mole: every time you knock it out, it just resurfaces somewhere else, said Michael Tiffany, self-described gentleman hacker and chief executive (CEO) of digital security solution White Ops, at an Ad Week presentation entitled “Ad Fraud: The Dark Side of Advertising.”

Hacking into a customer’s account is infinitely easier than robbing a bank, but now that banks are catching onto the cyber criminals, many of them have begun to attack advertising agencies. And they are causing a ton of damage.

Ad fraud costs brands $6 billion in fake impressions each year. At its center are bots, software designed to carry out automated tasks, typically simple and repetitive, on the Internet, such as Web searches and answering questions on help channels. They can also wiggle mice, put items in shopping carts, and click on links.

“If you want to sell retargeted inventory on a cost-per-action basis, what is your best strategy, to show real ads? Or ads at a lower rate to robots that are clones of large numbers of consumers?” Tiffany asked, adding that the latter can target 10 times as many people for a twentieth of the price, and the same amount of effort is required to put out 1 million fake impressions as 100 million.

“The bot traffic gets laundered through the advertising ecosystem through a series of middlemen,” Tiffany explained. “Everyone who thinks they’re avoiding the problem isn’t, because metrics in this industry are gameable.”

What makes bots, which can be programmed to only work when a real person is online, most difficult to get around is that analytics implicitly trust the machines with which they interact. “Bot nets are made for real computers where people really buy things,” Tiffany said. “No one can differentiate between Bob Smith and Bot Smith on the same cookie.”

Ad fraud is most common on websites with the lowest and highest cost-per-mille, which are the least monitored and most lucrative, respectively.

“There’s a huge incentive mismatch. The bad guys, when they win, make millions of dollars. When the good guys win, we get to keep our jobs for another day,” Tiffany said.

Because cyber criminals are extremely savvy, stamping out their handiwork is complicated and requires sophisticated counterhacking. There may be some good news on the horizon, though, as the frequency of fraud was down in August, when White Ops publicly stated it would be keeping an eye on premium ad buying for an Association of National Advertisers (ANA) study.

“Start with easy actions that don’t require technical engineering,” Tiffany advised. “They just require putting some eyes on the problem.”

Image via Shutterstock.