“As a result of this elaborate plan, the defendant counterfeited billions in ad views and led companies to pay more than $7 million for ads that were never actually viewed by real human Internet users,” the Justice Department said. although The New York Times named as a “victim” by the Justice Department, the publication declined to clarify whether it was paying for fake ad views or whether its website was being spoofed by one of Zhukov’s fake sites. Nestlé, Purina’s parent company, did not respond to a request for comment.
Some companies have taken matters into their own hands. In 2017, Uber sued one of its ad agencies for charging ads that weren’t seen by real people or posted on real websites. The case started when Uber took down all online ads and barely noticed a drop in app installs or sales. Why? Some argue that online ads target people who are already planning to buy that product or service. Others claim that ads often target bots. But it is difficult to get a clear answer. Companies that pay for ads have an incentive to downplay the number of bots to hide how much money they’re wasting. And cybersecurity companies have an incentive to exaggerate the numbers to sell anti-bot products.
The technology to detect and block bots already exists, said Sandy Carielli, chief cybersecurity analyst at Forrester consultancy. But businesses can’t be willing to research traffic that makes their website look popular on the surface, she says. “Keep in mind that if you cut the bots and it turns out that a large amount of traffic on your site is being generated by bots, that’s going to affect your performance figures.”
Advertising wasn’t always like this. Augustine Fou, who has been a digital marketer for 25 years, says there has been an explosion in fake traffic in the past decade. Fou believes the industry was corrupted about a decade ago, when a series of opaque middlemen came on the scene. “Previously, advertisers bought ads from publishers like The New York Times,” he says. But now it’s common for brands to approach a digital ad exchange — which facilitates the buying and selling of ads from various ad networks — to place their ads on huge numbers of websites and apps. And it’s this part of it. system that has become vulnerable to bots, says Fou.
“The exchanges have deliberately looked the other way when there are fraudulent sites and mobile apps that become part of that exchange,” he claims. Google and Facebook are among the companies operating these exchanges, along with other publicly traded US companies such as Pubmatic and Magnite. “The ad exchanges don’t want to solve fraud because fraud generates so much volume,” says Fou. “And the exchanges essentially make more money when more volume goes through their platforms.” None of the exchanges responded to requests for comment.
And it’s not just the stock exchanges that seem to be avoiding the fraud problem. Advertisers are also reluctant, says Fou. “It’s too embarrassing for them to admit they bought fraudulent inventory.” He cites a rare attempt to sue Uber after it discovered Austin-based advertising company Phunware was selling fake app installs using bots. “Most of the Uber app installs that Phunware claimed to have delivered were generated by a fraudulent process known as ‘click flooding,’ which reports a higher number of clicks than the number that occurred,” Uber law firm Reed Smith said. winning the fraud case.
“Many still think ad fraud is a victimless crime,” says Fou. “Because who cares if big brands waste their money showing ads to bots?” But the industry is pouring advertising dollars into the pockets of cybercriminals, he adds, who can then use it to fund other illegal activities. It’s a big problem, he says. “One that nobody talks about, nobody writes about. Everyone thinks it’s someone else’s problem.”
