back to article The cybercriminal's cash cow and the marketer's machine: Inside the mad sad bad web ad world

Digital ad fraud is potentially lucrative, difficult to detect, and getting worse. "It is one of the biggest ways bad guys have of pulling money out of the online economy," said Louis-David Mangin, co-founder and CEO of Confiant, a firm that helps publishers mitigate the damage done by hosting bad ads, in a phone interview …

  1. Chazmon

    Targetted ads are rubbish

    You know what I like about El Reg's ads? They actually match the website rather than the cookies from a website I visited earlier in the week.

    Particularly with my work computer I don't really buy anything I will however do a certain amount of product research. Even this is an infrequent occurrence so I may have to suffer through the same adds for sticky labels or dust masks for weeks.

    1. adnim Silver badge

      Re: Targetted ads are rubbish

      My approach... contextual and unobtrusive ads (out of the way, right column? Not in the main flow of the copy) text only ads with a link. Served from the root domain with url that identifies the partner/affiliate to the advertiser.

      I dunno why I feel I need to say this... contextual... pertaining to page content. Why track someone around the Internet to advertise them what they may have already bought? Why not place contextual ads? If someone visits a page on the web regardless of what it is about, they are interested in the content of that page. So place ads relevant to content.

      Yes, there is the potential for click fraud. But that happens now. My concern is with privacy, data collection and tracking of the user, not with an advertisers budget. And I am not particularly sorry if those that track "anonymous" ids around to present ads are offended by this. Just down vote me and we can perhaps get a count of El Reg readers who have a career in marketing and advertising and believe the current "track it" strategy works ;-)

      1. Anonymous Coward
        Anonymous Coward

        Re: Targetted ads are rubbish

        > Why track someone around the Internet to advertise them what they may have already bought? Why not place contextual ads?

        Because anyone can do contextual ads, but you need a certain might (read: you're a big bully) to follow people around the internet, so if you can do that or at least plausibly claim that you can, you can use it as a selling point and a differentiator and try to persuade ad buyers that your service is better than the competitions, even if it actually isn't as you rightly have pointed out.

        Now, I know sod all about ads and so on, but looking back at the last twenty years of ads on the internet, I believe that's more or less how it went and how we ended up where we are now regarding personal data, privacy violations and so on.

  2. Rob D. Bronze badge
    Coat

    Ads are rubbish

    > Of course, before anyone asks, El Reg's highly capable ad operations team works hard around the clock to ensure our ads are not only served to and seen by millions of real eyeballs each month, but also high quality and safe.

    El Reg's highly capable ad operations team may slave away around the clock but mistakes will get made and other organisations will be less scrupulous. So citing this article as justification (and continuing to do so until the ad industry starts behaving properly or hell freezes over, whichever is the soonest) I confess the ops team's efforts are completely in vain as my free browsing experience remains completely ad free (and paid for by someone else).

    1. K Silver badge

      Re: Ads are rubbish

      Beer for you!

      To be honest, whilst the whole battle with ad-blockers seems to have gone quiet, I think we're just going through the eye of the storm.

      I've used ad-blockers for years, but my partner was never bothered by them - until a few months ago, we were planning our wedding and my now wife got freaked out that everywhere she went she got bombarded with ad's, some so targeted, that she'd view a dress, then the following day the same dress would pop up on ads in Facebook and Instagram etc.

      Now all my family want one (ad-blocker that is, not dress!).. but I didn't want the hassle of having to root all their phones, thankfully the guys at XDA (and other places) have come up with another solution called Blokada, which I now install on all their phones, it seems to work just as well as AdAway, more configurable and battery usage is negligible!

      1. Charles 9 Silver badge

        Re: Ads are rubbish

        I've personally used DNS66 myself. Has its own sets of options, also FOSS and available from F-Droid.

      2. Alan Brown Silver badge

        Re: Ads are rubbish

        "thankfully the guys at XDA (and other places) have come up with another solution called Blokada, which I now install on all their phones, it seems to work just as well as AdAway, more configurable and battery usage is negligible!"

        The best thing about Blockada is that it _doesn't_ need root.

        It interposes a loopback VPN on the connection to the outside world, which is a very clever way of getting round Samsung (and other makers) tendency to put a fuse in the system which blows (and voids warranty - supposedly - although I can't see how this would stand up under EU law) if you root your phone.

        1. Charles 9 Silver badge

          Re: Ads are rubbish

          "although I can't see how this would stand up under EU law"

          Simple. It's considered tampering with a pristine environment. I don't recall warranties being honored if the device in question has been tampered.

  3. Doctor Syntax Silver badge

    There seems to be an unaddressed assumption in this, namely that ads directed at the advertiser's intended audience provide positive value and that ads directed at some other audience don't. And yet we all seem to regard ads as annoying nuisances. Perhaps these "fraudulent" ads might be better for the advertiser in that their negative value is less damaging when directed to pester the "wrong" audience.

    1. JohnFen Silver badge

      "And yet we all seem to regard ads as annoying nuisances"

      Personally, I don't regard ads as annoying nuisances. I regard them as straight-up attacks.

    2. Nick Kew Silver badge

      ad fraud is ad fraud

      There seems to be a deeper unaddressed question, of which this assumption is just one facet. What is ad fraud in the first place?

      I'm sure we could all devise examples that are or aren't ad fraud. But more fundamental than just the inevitable big grey area, the whole term is undefined. Even the examples in the article are mostly vague as hell.

      Where do we all stand on El Reg's more egregious clickbait? Or the high-pressure announcements: you have until midnight tonight to register for [foo] (before the already-outrageous cost doubles)?

    3. Alan Brown Silver badge

      "And yet we all seem to regard ads as annoying nuisances"

      Bandwidth sucking - yup

      Intrusive - the ones which are animated, noisy or even videos - yup.

      Creepy/stalky - yup

      If ads stuck to being quiet, small and unobtrusive then we wouldn't be complaining about them. Some of the best marketimg campaigns ever, have been ones where the audience have barely noticed them.

  4. GnuTzu Bronze badge
    Trollface

    "marketers want the fraud to continue"

    Are we down the rabbit hole yet?

  5. GnuTzu Bronze badge
    Trollface

    "there will always be an underbelly in the ad world"

    One that will continue to deliberately drag itself through the filth spewed out by the contrast between basic human greed and lazy apathetic ignorance.

    Not to mention: "the industry has been so profitable for so long that there's a disinclination to rock the boat. Cybercriminals, he said, 'have created a structure where the industry is addicted to their revenue'"

  6. JohnFen Silver badge

    Agreed

    ""It is one of the biggest ways bad guys have of pulling money out of the online economy,""

    I agree -- online advertising is one of the biggest ways that those bad guys in the advertising industry are pulling money out of the online economy. Worse, it's one of the biggest ways that everyone is being spied on.

    1. Mark 85 Silver badge

      Re: Agreed

      :Let's add in the cost that increases the purchase price of products. The money for ads (legit or fraudulent) has to come from somewhere and that's usually product price. So basically, it's a hidden tax that costs consumers and just keeps on giving to the advertising food chain.

  7. Detective Emil

    Goodness me

    If this much money were being siphoned out of (let's say) healthcare delivery — for which, like advertising, we all pay — governments would be falling over themselves to (be seen to) stop it. Although typically by excluding qualified recipients, making vague but loud claims about financing terrorism, and so on… Maybe we are better with the status quo.

    1. Jack of Shadows Silver badge

      Re: Goodness me

      You obviously haven't been paying attention to the numbers on Medicare and Medicaid fraud, let alone medical insurance or Social Security Disability claims, if you are in the US. I have no idea what NHS numbers look like although I really should keep track. Anyhow, it's in the billions of dollars and some of the numbers that turn up are in the tens of billions. There's a lot of guesswork, as with the advertising fraud, but I'm confident that they are lowballing the numbers. Just look at how much of the economy, about 1/7th, healthcare makes up.

    2. JohnFen Silver badge

      Re: Goodness me

      In the US, anyway, a shockingly large percentage of every dollar we spend goes straight into advertiser pockets, especially when it comes to prescription drug prices.

  8. Alistair Silver badge
    Windows

    urrrm:

    It is one of the biggest ways bad guysadvertisers have of pulling money out of the onlineglobal economy,

    Modern advertising is utter shit. They've analyzed the industry as a whole in to horrible territory, and it bluntly *no longer* works the way any real vendor of product or service *truly* needs or wants. Its overpriced, raising the costs of products at the end user level, and effectively contributing the boom/bust cycle that we will, thanks the MF "velocity of money" theory continue to follow into the financial doom of the human race.

    Why, yes, I am a grumpy bastard this afternoon. Don't ask why. Executives really are the bane of our existences. I'll go back to writing up why this project doesn't belong on a cloud. And explaining that saving 30% on CAPEX to increase OPEX by 250% really really isn't what the beancounters want.

    1. Alan Brown Silver badge

      Re: urrrm:

      "And explaining that saving 30% on CAPEX to increase OPEX by 250% really really isn't what the beancounters want."

      CAPEX and OPEX aren't the issue, it's total costs that matter.

      YOu also need to take into account that OPEX is 100% deductable whilst CAPEX has to be depreciated.

      1. BebopWeBop Silver badge
        Facepalm

        Re: urrrm:

        Good point - but the financial incompetence of many managers makes it difficult, even in wurds on few sylabble to explain what the actual tradeoffs are. I suppose an exec with an eye of a lucrative exit will take savings now as opposed to stability and continuity later.

  9. Anonymous Coward
    Anonymous Coward

    Ad?

    What ads? You mean the ones my ad-blocker add-on prevents from being loaded, therefore keeping me from getting drive-by malware served up by a dodgy ad?

    (I understand the rationale behind them, but until there's a process in place on the advertising side of things to keep dodgy ads out, I'll keep my ad-blockers. I do support web sites in other ways (patreon, buying merch, etc.)

  10. wayne 8

    Big Fuss over Interent Ads

    Proctor & Gamble, USA corp, decided to slash their Internet ad budget. They found the cuts had zero impact on their sales.

    Waste of resources to create a need for branded products in the minds of possible consumers.

    Bernays would be so happy.

    1. Ole Juul Silver badge

      Re: Big Fuss over Interent Ads

      I'm not surprised that Proctor & Gamble found no impact from cutting internet ads. The whole ad business is no more than one of selling prayers, particularly on the internet. You either believe it works or you don't.

  11. N2 Silver badge

    What ads?

    Updated hosts file with about 30,000 advertising shyte host names resolved to 127.0.0.1

    Then theres AdBlock Ultimate with a few of my own scripts or filters, whatever

    Then theres NoScript

    Been a while since Ive seen an advert on-line and I'm not missing them at all.

  12. Anonymous Coward
    Anonymous Coward

    "El Reg's highly capable ad operations team works hard around the clock to ensure our ads are not only served to and seen by millions of real eyeballs each month."

    If thats so el reg, put your money where your mouth is and run a public poll(no account needed to vote).

    Q. Do you see el reg ads. Y/N answer

    Q. Do you have an account with el reg. Y/N answer

    millions? I see probably the same thousand posters over and over. Lets test and see how accurate your ad stats are here.

  13. Kevin McMurtrie Silver badge

    Party like it's 1999

    Remember the dot-com collapse? Web sites decided that their customer base was not human, but advertisers. The business was maximizing ads views, maximizing click-throughs, and collecting spamming lists. Split pages in half to double the ad revenue. Sell premium full-page interactive ads. Shovel in unrelated content to gain the attention of search engines. Businesses were buying millions of ads on other web sites to generate ad views on their own web site.

    <POP>

    Then it was all gone. All the sales, investments, and speculated profits were found to be looping paths that had no actual inputs but the wild parties and exorbitant expenditures were real. Web sites tried to recover but they found that only click-fraud bots were putting up with all the garbage content. Silicon Valley was almost a ghost town for two years.

    Today I see a lot of websites demanding that ad blockers be turned off to view content. These same web sites are so badly hijacked by JavaScript malware without the ad blocker that the content still doesn't display. The sites literally can not be viewed by a human being. The ads are for other web sites that sell ads. Where's the real money coming in?

  14. Anonymous Coward
    Anonymous Coward

    Further evidence,

    as if it were needed, that blocking EVERY advert from EVERY site is the only way to go.

  15. The humble print monkey

    Java off, and on

    As a consequence of using an old iPhone with very limited battery and processing power, I have over two years of no ad history. This was as a result of turning off java. A colleague kindly donated an SE to me, as the battery life was half a day, and she was due an upgrade.

    So now I’m getting a weird set of ads. On the register, I seem to be needing a jeep, and razor blades. Elsewhere, and I can only assume from reading an article on Genetically modified monkeys*, every fourth ad is for GM mice.

    Don’t know what I’m doing wrong, but the battery seems to last me all day, even though the new phone is an interesting shade of gold.

    *the Atlantic

    1. stephanh Silver badge

      Re: Java off, and on

      You turned Java "off" on your iPhone?

      You probably should have turned Flash off too, then. And Silverlight.

      1. BebopWeBop Silver badge

        Re: Java off, and on

        and taken advantage of the Apple reduced battery cost for the SE

    2. Packet

      Re: Java off, and on

      JavaScript.

      Avoid the confusion by referring to the correct technology, dear fellow - even though it won't make a lick of difference when we're all dead

  16. Milton Silver badge

    "El Reg's highly capable ad operations team"

    "Of course, before anyone asks, El Reg's highly capable ad operations team works hard around the clock to ensure our ads are not only served to and seen by millions of real eyeballs each month, but are also high quality and safe."

    But in truth I could not care less because there is not the remotest chance I'll ever click on any of them.

    My wild guess is that a vanishingly tiny percentage of El Reg readers purposely click on any ad, of which an even more invisible proportion go on to to purchase the advertised item.

    At what point will we all simply accept the truth? Internet advertising is ghastly shit (even worse than radio); so-called targeted advertising is just laughably crude, useless and may even be counterproductive; most of the purported activity is either fraudelent or simply wasted clicks; and the only people pushing the concept are those with an interest in perpetuating the myth that any of this pointless crud actually works. Yeah, I'm looking at you, Google, whose business was founded upon Pure 100% Certified Horseshit.

    1. Charles 9 Silver badge

      Re: "El Reg's highly capable ad operations team"

      Only when the public will accept the fact the zinger net isn't free and everything starts disappearing behind pay walls and people either pony up or go, "Stop the Internet! I wanna get off!"...and go back to the TV spots, product placement, international junk calls with fake Caller IDs, billboards, and junk mail...

    2. Alan Brown Silver badge

      Re: "El Reg's highly capable ad operations team"

      " Internet advertising is ghastly shit (even worse than radio)"

      I have empirical evidence that radio advertising works (I got customers from it)

      On the other hand newspaper advertising was utterly useless and I wouldn't bother with internet advertsing unless I wanted to drive customers away.

      1. Charles 9 Silver badge

        Re: "El Reg's highly capable ad operations team"

        "I have empirical evidence that radio advertising works (I got customers from it)"

        I have empirical evidence of the opposite. Seems most people change the station or turn the radio OFF when the ads come on (and let me tell you, some of them are LAME).

  17. Uberior

    I have a Wileyfox mobile phone, it was discounted by £50 on the basis that I'd accept targetted ads on the lockscreen.

    Now, I don't mind *regular* advertising, but the day-in day-out image of Deborah Meaden, Peter Jones or Martin Lewis scam advertising is outrageous for sanctioned targetted marketing. The fake ads for "Ask.com" that are riddled with spelling mistakes are irritating too.

  18. John Geek
    Mushroom

    and don't forget...

    ...cryptomining.

    a moderately popular web forum I'm on currently is infested with some sort of trojan that as long as you've got the site open, it eats 100% of one CPU core, and taps a WebSocket at a .ru host every few seconds with a encrypted message/response ... googling the .ru host name shows it on various lists of coin miners.

    natrually the javascript coming out of the site's advertising farms is way too obfuscated to trace, 180K blobs of hash being executed

    death to spammers!

  19. c1ue

    The major platform owners - "Don't be evil" and Z - get about half the revenue of the digital advertising market.

    Proctor and Gamble cut their $1.2B-ish ad budget by $200M - and saw no change in results at all. This gives a real world idea of just how much fraud there is.

    Overall, digital advertising is a shade under $400B. A Proctor and Gamble percentage of fraud would mean $65B in advertising fraud. It is probably that the actual fraud is higher.

    Why would the platform owners want to stop this?

    1. BebopWeBop Silver badge

      at least $68Bn if their sample is representative

  20. Anonymous Coward
    Anonymous Coward

    A fraud peddling frauds is frauduent indeed.

    When one considers that the content of most "legitimate" ads is fraudulent, then the fraudulent claim of distributing such frauds becomes just another aspect of what is a basically fraudulent enterprise at root. The degree to which a business can withstand this waste and inefficiency without significant impact on its costs, resultant profits, and stock price, is the extent to which that business is non-competitive either through conglomeration, or oligopoly or monopoly, in its markets. That so many can just disregard it and go along with it is an indication of just how non-competitive our business world has become.

    1. Charles 9 Silver badge

      Re: A fraud peddling frauds is frauduent indeed.

      So what happens when the frauds are found to themselves be frauds which in turn were frauds themselves until it's paper turtles all the way down?

  21. This post has been deleted by its author

  22. Claverhouse Bronze badge

    Once I got that advertisers are the victims here, I lost interest.

  23. Norman Nescio Silver badge

    Outsourcing advertising and GDPR

    Outsourcing the provision of advertising to third parties could well have GDPR implications.

    The GDPR makes it clear that you are not allowed to predicate provision of service on acceptance of advertisements:

    "A data controller may not refuse service to users who decline consent to processing that is not strictly necessary in order to use the service (Article 7(4))"

    REGULATION (EU) 2016/679 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (Text with EEA relevance)

    Look for article 7 section 4, which is in Chapter II - Principles

    "When assessing whether consent is freely given, utmost account shall be taken of whether, inter alia, the performance of a contract, including the provision of a service, is conditional on consent to the processing of personal data that is not necessary for the performance of that contract."

    So if you are not already asking for positive consent from your advertising marks, there's a regulator with big stompy boots in your future.

    Passing Personal Data on to third parties (which includes IP addresses*) falls within the scope of GDPR, so using third parties to serve up advertisements requires you to gain explicit consent, which in the case of minors, requires the consent of their parent or guardian. Anyone using third party advertising services/networks should be feeling rather worried by now.

    If you are covered by the GDPR, and have not explicitly consented to see advertising (and you can revoke that consent at any time), you shouldn't be seeing any from legitimate organisations, unless the service provider can successfully argue that it is strictly necessary for them to provide their service to you. The argument that you can't provide the service without the income from advertising doesn't meet this standard. You can read Max Schrems take on this in the discussion on the complaints filed against Google, Instagram, WhatsApp and Facebook.

    It will, of course, take a while, but if your business model is dependent on income from online advertising, I can see future problems. It will not be pretty, and online (only) journalism financed by advertising may not survive. El Reg could be living on borrowed time, which is a shame. Maybe a viable method of microfinancing page views will appear. Or the online journalism industry will die by paywall. I've enjoyed reading The Register while it lasted.

    *19 Oct 2016 - the Court of Justice of the European Union (CJEU) ruled that dynamic IP addresses could be considered as personal data under GDPR. See http://curia.europa.eu/juris/document/document.jsf?docid=184668&doclang=EN&cid=1095511

    1. Filippo

      Re: Outsourcing advertising and GDPR

      I wouldn't mind paying a reasonable fee, either as subscription or with microtransactions, in order to read The Register, because The Register does actual journalism. Unfortunately, most people would rather read regurgitated press releases and opinion pieces written by people who have no idea what they're talking about, than pay even a single penny. And there will always be a plentiful supply of those - with online publishing, the barrier to entry is just too damn low, and if it won't be funded by ads, it'll be funded by interested groups, which may be even worse.

      1. BebopWeBop Silver badge

        Re: Outsourcing advertising and GDPR

        As someone who forks out modest amounts of cash per month to subscribe to a couple of digital publications, I can assure you that the reg would make more money from me by asking for a small subscription than they get for ad income drivenn by me.

  24. Just Another Fuckin Anarchist

    "there will always be an underbelly in the ad world"

    Of course there will.. the ad world consists of NOTHING BUT underbelly.

    Bill Hicks was right.

  25. Clarecats

    Your phone is listening too

    And showing you ads based on what you discuss with friends, even when you are not making phone calls.

    Younger people have different expectations of privacy online.

    One lady claimed this setup was helpful, as she had been discussing with a pal how she would like such a product to be invented, and next day an ad for this product showed up on her phone. She hadn't known it existed.

    Me: Don't you find that creepy, intrusive and invasive of privacy?

    She: No.

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