Fraud in the Online Advertising Market

Several ad technology companies say fraud is on the rise across the online advertising market. One particularly disturbing trend is called “domain laundering,” where marketers are tricked into buying ad space on sites that offer file-sharing and pirated content. Here’s how it works: A file-sharing site makes its ad inventory available for an ad network to sell. The ad network then sells that ad space through an ad exchange. However, knowing that advertisers will not want to run ads on a site that offers pirated content, the ad network manipulates how that inventory is presented in the ad exchange. When the advertiser buys ad space through the exchange, it believes it is buying ads on a legitimate website.

This trend really shouldn’t be a surprise to anyone, in my opinion. There is a lot of money that switches hands every day across the online advertising space, and it is a relatively young and constantly-evolving marketplace. When you combine all of that with a lack of regulatory systems and policies, you’ve created an environment that’s ripe for fraud. It will be interesting to see what kind of measures various stakeholders will try to implement in order to make the online advertising market more transparent and less of a target for fraud.

Source: http://blogs.wsj.com/cmo/2014/11/12/domain-laundering-is-the-latest-fraud-threat/?mod=WSJBlog&mod=wsj_cmohome_cmoreport