Senator Mark Warner (D-Virginia) has asked the Federal Trade Commission (FTC) to investigate the prevalence of digital ad fraud. In particular he wants the FTC to look at Google in light of a BuzzFeed investigation uncovering more than 125 Android apps and websites that potentially siphoned off millions of dollars in fraudulent ads. In addition, some of the apps and websites were targeted and kids and tracked them without permission.
Buzzfeed quotes a person that was involved with the fake ads that estimated “hundreds of millions of dollars” had been stolen from brands when ads were shown to bots instead of humans.
“Bots, trolls, click-farms, fake pages and groups, ads, and algorithm-gaming…” Sen. Warner’s office said in a news release, “… have been used to assist click fraud in digital advertising markets and efforts to convince large numbers of users to download malicious apps on their phones.
Sadly, it’s just another headline in a growing number of reports about digital ad fraud. There’s been so much noise about it that even the trade industry that works on behalf of advertisers is talking publicly. At the Association of National Advertisers (ANA) marketing conference this past week, ANA CEO Bob Liodice noted that “just 25% of CMOs’ digital media investment reaches target audiences.” That estimate may even be on the low side.
Juniper Research pegs the cost of ad fraud at $19 billion this year or $51 million dollars every single day. An Adobe study found bots and non-human traffic accounted for as much as 28% of all digital traffic to websites.
Mobile tracking company AppsFlyer reports that it’s getting worse. Examining 10 billion installs of 6,000 apps, the company found that “mobile app marketers were exposed to 30% more fraud during the first quarter of 2018 (as compared to the 2017 quarterly average).” It also concluded that the fraud rate had grown 15% since its last measurement. In first quarter alone, tracking only mobile apps, the study shows estimates $700 to $800 million was stolen from fraudulent ads.
“Google’s inattention to misconduct within its app store also enabled the extensive fraud involved here. In addition to failing to notify users of the change in ownership, Google failed to detect changes in the apps that facilitated extensive user tracking subsequently used for bot behavior. Nor did it detect the myriad indicators of coordinated fraudulent activity between the apps – including overlaps in app content, source code, IP addresses, SDKs, and common traffic patterns. Despite being approached by researchers in June with evidence of part of this scheme, Google failed to dig deeper to reveal the full scope of this fraudulent activity. While there is no evidence Google had direct knowledge, Google’s ad network and ad exchanges were also implicated in these schemes. At the very least, it seems that across a number of its products Google may have engaged in willful blindness, all while profiting from this fraudulent activity.”