Display and video ad fraud has increasingly become a serious issue in the world of advertising, costing the industry billions in revenue every single year.

New York-based security investigator White Ops released a report last year for the Association of National Advertisers (ANA), titled ‘The Bot Baseline: Fraud in Digital Advertising’, calculating that advertisers will lose $6.3 billion to bot fraudsters in 2015.

Fraudulent video ad impressions are gained by hiding the actual URL where the ad appears and using what are known as ‘front sites’ that mimic legitimate publishers. These fraudulent impressions are then sold as part of an advertiser’s overall inventory.

White Ops found that almost a quarter (23%) of all video ads are served to bots and 11% of display ads are bot-infected. Bots also accounted for 17% of all programmatic ad traffic.

“The advertising industry is under siege” says White Ops CEO Michael J. J. Tiffany, adding, “Criminals have further benefited from confusion and uncertainty in scoping the problem.”

However, Hervé Brunet, co-founder of StickyADS.tv, who provided ‘The Premium Programmatic Video Premise of 2015’ for PerformanceIN, said that 2015 could be the year that the ad industry will finally be compelled to tackle fraud more effectively.

“Discussions will move on from who is committing the fraud, to how preventative anti-fraud technology should be implemented”, he said, adding that this will determine who is responsible for administering the technology and who fronts or shares the costs.

Paying the price

Brunet raises a very valid point; if the issue of ad fraud affects everyone in the display and video ad space, who should foot the bill for fraud management?

Digital performance solutions company DoubleVerify’s Matt McLaughlin believes that anyone who benefits from online advertising has a responsibility to ensure it is trustworthy and that criminal behaviour has no place in the ecosystem.

“Advertisers benefit because it is a great way to reach consumers; intermediaries benefit by generating revenue from their platforms and publishers benefit by reaching an audience for their content and monetizing that audience exposure,” he said.

Erol Soyer, managing director at fraud detection company Forensiq, echoes McLaughlin’s comments, stating that the problem is industry-wide problem and affecting all parties.

“Each part of the ecosystem needs to address the issue, whether by using proprietary technology or by working with a vendor whose specific focus is fraud eradication.”

Evidently the industry needs to stand united in order to effectively tackle the issue of bot fraud. Rather than passing blame, all affected need to accept responsibility and, as White Ops’ Tiffany warned, avoid the confusion and uncertainty that further benefits criminals.

Rich Astley of video advertising platform Videology stresses the importance of realising the severity of the problem and to not pass the buck between various parties within the industry.

“Each part of the industry must take the issue seriously and be prepared to act. Only through working together can we make progress,” he said. “You need to be incredibly vigilant to stay ahead of the fraudsters. (This) is an issue we have to collectively address as an industry.”

Opportunistic fraudsters

The White Ops research found that video has a considerably bigger issue with fraud than display ads, which those in the industry have noticed first hand.

“We typically find this to be the case with fraud rates in video up to five times higher than in display,” says McLaughlin. “Fraudsters are opportunistic and they will migrate to where the best opportunity lies, which is why you will see an increase in fraud when it comes to video advertising.”

Soyer said he also found this to be the case, adding that video is often a victim of its own effectiveness as a channel.

That being said, display ads are still falling victim to cyber crime in a big way, especially as the industry increasingly moves towards programmatic buying, with White Ops reporting that display ads purchased through programmatic channels are more likely to be affected than those acquired through non-programmatic avenues.

“Ad fraud is clearly prevalent throughout the ecosystem. However, there are two things that happen in programmatic buying to indicate higher degrees of fraud,” says McLaughlin. “With the lack of a direct relationship you’re up to three times more likely to have fraud than in direct publisher buys, since there is a lack of seller accountability.”

Call to action

It is clear that bot fraud is gaining heightened attention within the industry as advertisers fight to keep the internet a safe, trustworthy and lucrative place to conduct business.

Before any action is taken, marketers and advertisers must ensure that there is full understanding of the problem and the challenges they face as they proceed to identify solutions and deal with the ever-changing tactics of fraudsters.

Videology’s Astley offered his advice to those suffering at the hands of online ad fraudsters, from the perspective of an ad tech platform.

“(Ad providers) need to invest in proprietary technology where possible and partner where it makes sense with third-parties who specialize in fraud detection.

“Ad platforms should have an open architecture to support third-party solutions, enabling them to detect, review and decide which URLs should be used or blacklisted, preferably in real time or as close as possible.”

Astley also remarked that despite advancements in technology, the human eye and experience remain powerful tools.

“The generators of fraudulent traffic often find ways to dupe certain technology auditors or are moving so fast there may be a window for bots to thrive, so we believe this manual line of defence is a critical part of the process.”

Ultimately, Astley remains hopeful that the industry is grasping the gravity of the issue and taking action which, with time and vigilance, will start to eke out fraudulent impressions and cyber crime in online advertising and keep the fraudsters at bay.

“We’re seeing a major fight back in the space to weed out the bad players. I think we’ll see bot traffic percentages start to drop considerably this year.”