According to Integral Ad Science, fraudulent impressions make up an alarming 15% of total online advertising impression and cost over $6 million a year. So who is responsible for this fraud? According to Jeff John Roberts at Gigacom, there are three characters in the story of online advertising fraud (see image below). Typically, the geographical source of the fraud is Eastern Europe, beyond the reaches of the FBI.
The "Typical Infected Owner" can serve up to 1,000 ads in an hour, undetected and unobserved, that are paid for by brands. Most fake ads come via ad exchanges. While the ad exchanges have been a blessing for advertisers looking to broaden their reach, they pose challenges for the integrity of the online advertising industry. The anonymity associated with the exchange (anyone can "dump inventory into the exchanges including the shady people who control botnets and ghost sites"). AOL was a recent victim of fraud on an ad exchange to the tune of $405 million!
FBX (Facebook's ad exchange) and Google AdX are emerging as beacons of hope for marketers looking to avoid the fate of AOL since their exchanges have better authentification (logged in users).
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