Fraud is a bigger issue than you think, but why does it matter?
“Digital ad fraud is the most profitable criminal activity — high margins, low risk, infinitely scalable.” — Dr. Augustine Fou, Cybersecurity, Anti-Ad Fraud Consultant, PR newswire
Evidence of the level of fraud in digital advertising today is glaringly apparent. There are even news stories by fraudsters publicly sharing how lucrative and easy it is — as if it were a legitimate business. A quick search online for companies to help pump up traffic will prove this point. Clicks and views as-a-service is quickly becoming a real, albeit shady, industry enterprise. In a market as rapidly growing as online advertising, the significance of the financial waste and poor user experiences driven by fraud cannot be overstated.
Fraud reduces the efficiency of ads, forcing legitimate users, advertisers, ad networks and developers, to pay. The payment comes in the form of ineffective ad spend, an inability to monetise digital real-estate, or from time wasted watching irrelevant ads. Either way, no one wins. Except the cons.
Given first party data challenges and increased pressure and spend for ad performance, fraudulent behavior is growing in its scope and sophistication. Ad fraud takes on a variety of forms and formats. A few of the popular examples are:

- Click farms: employees are paid to click and interact with ads effectively manufacturing engagement activity
- Click spam: programmatic background clicks without the user knowledge
- Click sniping: automatic interception of attributable clicks
- Device hijacking: malware installs that generate fake user actions
- Ad stacking: serving ads on top of one another creating multiplied, but false, ad views and clicks
- Bots / Emulators: non-human machines generating fake traffic to interact with ads
As the use of machine learning algorithms & automation to increase ad efficiency in digital advertising grows, the problems of bad data & fraud grow with it. Deciding where to invest ad spend in an algorithmic, scaled and software driven way, when based on bad data, simply creates a massively leveraged, machine driven failure. You have machines directing where to spend millions of dollars on ads, and their decisions are based on fake, inflated or generally poor data points, turning into a feast for fraudulent players.
Pixalate, a service that monitors hundreds of billions of ad events in real time by tapping into the global RTB data stream, recently measured 15% of desktop web display and video ads were measured as invalid.
Leading cybersecurity and ad fraud expert Dr. Augustine Fou, speaking to tech marketing site In Marketing We Trust, tells reporters:
"Literally everyone is a victim. The entire digital ad ecosystem is the biggest victim because the bad guys are siphoning a large portion of dollars out of the digital ecosystem."
"Consumers are affected too because they have bad ad experiences (sites overloaded with ads), they suffer malware attacks — bad guys want to compromise their computers to use in botnets — and their mobile bandwidth is eaten up by ads and not by the content they want to see.”
Fraud is touching even the most established corners and players in the space. One of many notable online ad scams, “HyphBot”, founded by tech company Adform in late 2017, saw the emergence of hundreds of millions of fake video ad views per day. Forbes recently featured AdWeek research suggesting that half of digital advertisers believe 10–40% of their ad spend is lost to fraud.
The fraud-struggle is real and painful: Facebook alone has disabled almost 1.3 billion fake accounts over the past six months. Lotame, one of the world’s largest exchanges for third party data recently announced that it removed ten percent of its over 4 billion profiles after acknowledging them as bots or in some way fraudulent. Company CEO, Andy Monfried, went on record estimating that 40% of all web traffic is fictional and emphasized how data quality, threatened by non-human traffic, has “degraded advertisers’ trust in data markets and consumers’ trust in advertising”.
All this adds up to a concerning future for digital advertising: money is lost, ecosystem experiences degrade, engagement plummets, cost competition for real interactions soar and everyone loses.
Advertising fuels the free internet, but fraud feeds a variety of problems - damaging the experience, causing enormous waste. Issues like privacy, malware, poor reporting, targeting and spend are all fuelled by fraud, and are impacting the economic incentives of all parties, diminishing the value users get and cementing their status as traded commodity. This is a must-fix problem in an age evolving rapidly toward being digital and mobile first.
The Zinc vision is to create a new, more transparent online advertising ecosystem by turning users from passive eyeballs to active players, without changing the way the advertisers, ad networks, app developers & publishers operate in today’s existing ecosystem.
The Zinc protocol will add an additional layer of trust; allowing advertisers to verify targeting and ensure ad placement fidelity. It is a must-have step toward fighting the fraud plague. To learn more on how, check out our full whitepaper.
