Digital ad market could be 2nd largest revenue source for organized crime

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July 12, 2016 by Paul Dughi

Businessman is pressing on the virtual screen and selecting Investigation.Two congressman have asked the Federal Trade Commission (FTC) to investigate online ad fraud.

Sen. Mark Warner (D-Virginia) and Sen. Chuck Schumer (D-New York) are behind the effort. Both are members of the Senate Banking Committee. While recognizing the online advertising industry’s efforts to get rid of ad fraud, the letter to the FTC questions whether enough can be done without outside help.

“It remains to be seen whether voluntary, market-based oversight is sufficient to protect consumers and advertisers from digital advertising fraud,” the two said in a letter.

It’s not me. It’s the Bots!

In a letter to Federal Trade Commission (FTC) Chairwoman Edith Ramirez, the Senators – both members of the Senate Banking Committee – pointed to studies that have found rampant fraud in the $60 billion digital ad market.

“…one pair of experts discovering that as much as 98 percent of all ad clicks on major advertising platforms such as Google, Yahoo, LinkedIn and Facebook in a seven-day period were executed not by human beings, but by computer-automated programs commonly referred to as “botnets” or “bots.

These programs allow hackers to seize control of multiple computers remotely, providing them access to personal information as well as the ability to remotely install malware to engage in advertising fraud, entirely unbeknownst to the computer’s true owner.

Organized crime enters the picture

Warner 2“The ad fraud market has scaled to such an extent that it has attracted participation by organized crime, with a recent report indicating that by 2025 ad fraud could represent the second largest revenue source for organized crime groups after drug trafficking,” noted the Senators.

“Bots plague the digital advertising space by creating fake consumer traffic, artificially driving up the cost of advertising in the same way human fraudsters can manipulate the price of a stock by creating artificial trading volume.”

You can read the full text of the letter here.

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