Full Cost of Online Ad Fraud May Be $400 Million A Year

Adweek’s Mike Shield’s has dropped another of his must-read stories on fraud in the online ad business.
Today he alleges that there are up to 500 big “ghost sites” that offer ad inventory to real-time bidding ad exchanges. The ad impressions only exist because botnets are creating fake clicks within them, Adweek says.
RTB ad exchanges work like auctions — whenever a web user arrives on a new page, the ad space on that page is offered for sale to multiple bidders in a split-second. The user sees the ad from the winning bidder.
RTB is one of the fastest growing parts of the online ad business, and is predicted to book $13.9 billion annually by 2016.
The problem is that the volume of business being done on these exchanges is so massive that individual advertisers sometimes don’t notice they’re buying ads on garbage sites that no one is reading — at least, not deliberately — or where the readers are actually botnets.
Adweek notes:

… the data-driven ad targeting firm Media6Degrees (m6d) has noticed 500-plus dicey new sites popping up on various exchanges—and collectively, 40.5 million bid requests.
 The social ad data firm RadiumOne, which also spends a lot of time in the exchange world, estimates that ghost publishers, shady Web crooks and their bot-employing associates are stealing a staggering $400 million a year from the online ad business.
Mevio.com: This video site is backed by Kleiner Perkins Caufield Byers, the venture capital firm behind Twitter, Path, Zynga and others. Yet according to numerous sources, including Radium-One, Mevio is suspected of being flooded with bot traffic.
Another buyer estimates that hundreds of millions of bogus impressions have been traded on ad exchanges in the weeks since our story. “Put another way, at least 15 to 20 percent of all real-time bid requests are probably fraudulent in some way,” he says.

Read the full story here.
SEE ALSO: This Company Alleges A Huge Portion Of Online Advertising Is Based On Fraud

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