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New Video Ad Fraud Costing $10 Million per Month

While the digital marketing industry is finally starting to take the threat of ad fraud seriously, it is clear that they will have quite a fight on their hands.  Ad software firm TubeMogul has recently announced that they identified three new bots, which were using entirely new technologies which targeted videos for view fraud.  The report says that the bots are generating at least 30 million fake views of online video ads per day, resulting in up to $10 million in fake ads per month.

Jason Lopatecki, TubeMogul’s chief strategist, recently commented to Advertising Week, “The complexity is getting bigger with each generation of fraud.”  This seems very clear given the way these new bots are working.  In his explanation of the bots, he said that one infected computer is made to appear like 1000, which means that even with a relatively small number of infected computers, it is possible to generate huge amounts of fraudulent traffic.

These bots also planted fake target segments in advertiser cookie data, which caused advertisers to illegitimate sites, with targeted audiences. TubeMogul will be publishing a list of sites that are known to be infected with this bot traffic so advertisers are aware of these risks, and can avoid paying for fake traffic.

It is unclear at this point how long these new bots have been working, but it can be assumed it has been quite some time.  It is often difficult to identify new generations of fraud bots, especially during the initial weeks and months, because they operate on smaller scales while building up the ‘army’ of infected computers and sites.

Randall Rothenberg, the Interactive Advertising Bureau’s president and CEO said, “There is plenty of blame to go around.  Publishers boost their traffic numbers by buying impressions from uninspected sources.  Agency trading desks offer bad traffic to their clients.  Marketers turn a blind eye, abdicating their own commitment to quality.”  This sentiment has been often repeated when it comes to ad fraud.  There is so much incentive by nearly all parties to let this fraud go, it is hard to battle.

Fortunately, more and more businesses are taking a stand against ad fraud, which is starting to force marketers and ad networks to take the threat more seriously.  This battle between ad fraud and the digital marketing industry will undoubtedly go on long into the future, but at least the marketing industry is finally starting to take the fight more seriously.

Pesach Lattin
Pesach Lattin
Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pesach Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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