

Robots, Not Humans, Fake 23% of Web Video Ad Views, Study Finds - MaxQuentero
http://www.bloomberg.com/news/2014-12-09/robots-not-humans-fake-23-of-web-video-ad-views-study-finds.html

======
jnty
Not sure I fully buy the argument that the industry is actually genuinely
losing that $6bn. If I buy plates in bulk but find that 25% are usually broken
in shipping, I will tend to pay 25% less for each shipment on the assumption
that this will happen - the supplier might even have already priced this in.

Online advertising is a much more fluid market and very metrics-focused - I
find it hard to believe that most smart companies haven't priced this into
their bidding. There's not some sort of intrinsic value per click or
impression - it should purely be based on the expected propensity of it
leading to a conversion. Fake clicks and impressions are just a factor which
reduces this and therefore it should automatically be taken into account.

In fact, I'm surprised it's not the suppliers of inventory, like YouTube, who
are complaining that this is erroding their value. If advertisers are getting
caught out by this then they're not being very smart.

~~~
sp332
There's a big difference if 25% of your plates are accidentally broken in
shipping vs being smashed with a hammer in the warehouse.

~~~
Retra
Your 'big difference' is _intent_, a flighty, volatile emotion that no
rational person will ever care to account for.

~~~
sp332
[https://en.wikipedia.org/wiki/Mens_rea](https://en.wikipedia.org/wiki/Mens_rea)

~~~
Retra
The whole point of my post is that this kind of thinking is bullshit. Saying
"the courts do it" doesn't contradict that, it's just an appeal to history or
authority.

~~~
sp332
If I break the plates, you might be able to get restitution from me. You can't
get that from a bumpy road. Also, you might be able to avoid broken plates in
the first place by threatening me with jail time. You can't threaten a road
into being less rough. The intention of a person completely changes the threat
profile and mitigation strategy, that's why it's a big deal.

~~~
Retra
Only if you can predict intent. Which you can't.

------
murbard2
Many people are asking why it's a problem, why don't advertisers just pay
less, etc.

The adbots are making money off of this, otherwise they wouldn't do it, and
that money has to come from _somewhere_. Meanwhile, they don't contribute
anything of value, so _someone_ 's losing money to the adbots.

The burden of the loss will actually be distributed between the ad buyers and
ad space sellers depending on their elasticity. The economics is very similar
to that of a sales tax, with the proceed going to the botnets.

~~~
Bill_Dimm
I think a clearer way to put it is this: The 23% number was measured across
networks displaying ads on many sites. Some of those sites employ botnets to
generate fake views, giving them much more than 23% fraudulent views, while
other sites that don't do such things have 0% fraudulent views. The amount the
advertiser is willing to pay is presumably set by their experience across the
whole network, so if they were willing to pay $X per ad without fraud, they
will pay 0.77 * $X due to fraud, which means that the honest websites get less
than they deserve (based on the value they deliver) while the fraudulent
websites get more than they deserve. So, the fraudulent websites are stealing
from the honest ones, not stealing from the advertisers.

~~~
murbard2
Not knowing the rate of ad fraud does make things worse, but is not necessary
to explain why it's a problem. Even if the ad fraud rate was absolutely
uniform across all websites, there would be a deadweight loss. The ad
fraudsters are extracting money from someone.

~~~
true_religion
If the ad fraud rate were uniform across all websites, then advertisers would
simply pay less CPM because its less converting traffic.

If website A is all fraud, and website B is 0% fraud. Then on the same
network, you'd have a 50% fraud rate, and website A would be paid money it
doesn't deserve (as it deserves nothing for its 100% fraud traffic).

Fraudsters are being subsidized by legitimate traffic.

~~~
murbard2
No. The price is determined by supply and demand. So you're saying demand
would fall - much as demand for a good falls when you impose a sales tax.
There would be deadweight loss from the lack of traffic _and_ advertisers
would still end up diverting funds towards adbots.

------
ChuckMcM
It isn't surprising. Click fraud has always been an easy way for a creative
programmer to generate "free" money. That said, it has also always been a
complaint for ever that advertisers don't think they are getting their money's
worth[1].

One answer is to switch to a pay for performance model like affiliates do,
basically only pay when something is purchased not just on click or view. But
brand advertising doesn't really have a good 'performance' metric.

As others have said though, its a 'fake' problem, just like credit card fraud
is a 'fake' problem. The costs are baked into the charges so the vendors get
their money either way. But having a story that BigCorp is taking pennies from
its legitimate customers to pay for ads being clicked on by robots is a hard
story to get sympathy for the advertiser :-)

[1] "Half the money I spend on advertising is wasted; the trouble is I don't
know which half." \-- John Wanamaker

------
jason_dstillery
To all the people saying this isn't a problem: it really is. Even if
advertisers bake a fraud premium into their buys, blindly letting money flow
to bad actors creates an incentive to be a bad actor, and bad actors in this
space do bad things that hurt everyone: waste massive amounts of bandwidth,
spam the web and app ecosystems with worthless content, and worst of all
exploit users to build and run botnets.

We've spent a lot of effort over the last few years fighting this stuff, and
we're really happy to see the industry as a whole starting to agree that it's
a problem. If you'd like to help make the web better by working to remove
these incentives, we're hiring engineers; contact info in my profile.

~~~
character0
I agree with the above sentiment. To elaborate on who gets hurt, the problem
is that small publishers get squeezed. If you're ESPN, you can create a
private exchange, keep a strong agency sales force, and keep up your prices.
However, the smaller publishers will not have the ability to reach the buyers
except through these compromised exchanges. If the buyers flee the open
markets, the smaller pubs have to band together into networks again or try
their luck with programmatic direct (Pubmatic is making a push for this with
their recent acquisitions). We go back to a world of media buying that looks
more like TV; we become a lot less fluid.

------
TheLoneWolfling
I'm surprised that no-one is talking about accuracy here.

How, exactly, do they determine who is and isn't a bot?

> For the study, researchers put software into the actual ads of 36 members of
> the advertising association between Aug. 1 and Oct. 1. The software allowed
> them to tell if viewers of the ads were people or bots.

~~~
buro9
I think that's what is being sold, and is what the report is promoting.

As a product and company, they remind me of
[http://spider.io](http://spider.io) who did a similar thing and were acquired
by Google. I was interested in using the technology to fight comment spam on
blogs and forums, but it was really tailored for detecting fraudulent clicks
and impressions on adverts and Google were quick to acquire.

Some of the spider.io blog is still accessible and shares some of the
approaches they used: [http://www.spider.io/blog/](http://www.spider.io/blog/)

------
akrymski
Someone please explain why this is a problem. The way I see it is that
advertisers pay for results. If you spend $100,000 on ads and make less than
$100,000 in extra profit - you're paying too much for ads. The fact that 23%
of ad views don't convert just pushes down the price of an "ad view", ie those
fake views are priced in to your CPM rates already. This does not effect your
ad budget however.

People that get hurt aren't the advertisers but the quality publishers who may
be struggling to sell ads at higher CPM rates, justifying those with fewer
fake ad views. But this is nothing new, ad rates have always varied
considerably across newspapers based on their quality and audience, and ad
buyers should understand that. It's completely normal to pay hundred times
more to show your ad on WSJ compared to PornHub for example.

I don't know enough about this, but surely ad buyers have the tools to track
conversion rates of different advertising mediums and publishers, thus
enabling them to ultimately compute the cost-per-sale?

~~~
illumen
Most advert buyers are not sophisticated. So fraud matters.

~~~
unreal37
I don't believe that. I've worked with some companies that spend millions per
year with online ads. They are sophisticated.

~~~
Dylan16807
Being sophisticated might just mean you understand that the current cost of
fighting fraud is higher than the cost of the fraud. It doesn't mean you're
not getting bled.

~~~
unreal37
Agree that they understand that fraud exists. And they are not immune to it
any more than you or I. But they don't look at it as "being bled". They pay X
cents for a click, and they get Y sales per click. And Y has to be greater
than X.

------
blfr
_Advertisers, for example, should demand transparency from website operators
about where their traffic comes from._

Ads are usually served from ad networks' servers so they should already have
this information.

~~~
fleitz
Yup, and also, it's oh so difficult to fake a referrer.

------
vaadu
I wonder how mass usage of AdNauseam could affect this:

[http://dhowe.github.io/AdNauseam/](http://dhowe.github.io/AdNauseam/)

[http://www.informationweek.com/software/productivity-
collabo...](http://www.informationweek.com/software/productivity-
collaboration-apps/ad-clicks-to-protest-online-tracking-
surveillance/d/d-id/1317063)

------
jmount
Online marketing/advertising is funny. You'd think once bots could get up to
20% fraud they could be scaled up a bit more and get to 99.9% fraud (the old
"machines won't be exactly as smart as people argument", people will be
smarter for some time and then machines will be smarter after that). The
cynical me also thinks as the fraud isn't likely to be distributed evenly and
you don't know if you are the one subsidizing the market you would get a
"market for lemons" effect ( [http://www.win-vector.com/blog/2008/05/is-
search-advertising...](http://www.win-vector.com/blog/2008/05/is-search-
advertising-a-market-for-lemons/) ). But I am guessing the desperation of
people to be in the market keeps the prices up.

------
jonahx
I'm confused about the motivation here. Are the companies serving these ads
running the bots, or paying others surreptitiously to run them? Why not just
directly fake numbers if you're going to cheat customers? I feel I must be
missing something...

~~~
true_religion
There's two reasons that spring to mind:

1\. The companies faking adviews don't directly control the ad management
system, so they need to fake a page view on their servers in order to get the
3rd party ad manager (e.g. Doubleclick/Adsense) to record it.

2\. The most obvious way of detecting fake traffic is to see that your ad
click-through numbers don't match up with the actual traffic hitting your
server. So to obfuscate this, you'll have your bot click through the advert
then land on the advertisers page and spider through a few links before
bouncing.

------
pseudometa
Ultimately, as long as advertisers see a positive return and receive value for
their money, click-fraud continue. Once that changes, then advertisers will
take their money elsewhere. Until then profit margins will just keep getting
smaller and smaller.

------
amenod
I am genuinly curious how they manage that. In a world where every user is
followed I don't think the robots have a chance to fool the anti-fraud
algorithms. At least with the bigger players (Google, Facebook) they don't.

~~~
onion2k
Imagine a botnet has managed to get itself installed on Grandma's computer and
is injecting 1 false ad impression for every 3 real impressions. The botnet
can install things on the computer. You can't (if you're Google, assume
Grandma isn't using Chrome). To stop the fraud you'd need to work out which of
the 4 impressions is the fraudulent one. That's an incredibly difficult
problem to solve...

------
billhendricksjr
Agree this is a problem, but if I'm making a list of companies I empathize
with for being victimized by shady business practices, Wal-Mart comes in dead
last.

------
iooi
Does anyone have a link to the actual study?

~~~
dakami
Heh, I'm one of the authors of the report. You can pick it up at
[http://whiteops.com/botfraud](http://whiteops.com/botfraud) .

------
towelguy
Just make the viewer click Google's captcha in order to show the ad ;)

