Report: The Origin of Ad Fraud

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By Digital Media Training


Despite industry initiatives to address it, ad fraud is a massive issue.


In fact, the cost of ad fraud is expected to have topped $19 billion by the end of 2018, which means all players in the digital advertising ecosystem need to be proactive against it.


To get a better look at the problem, we talked to Rich Kahn, CEO and co-founder of eZanga and, who shared his new ad fraud report with us.


DMT: If you could summarize the white paper into one sentence, what would it be?


Kahn: There’s a common narrative that all ad fraud originates from certain regions of the world; however, as fraudsters become more sophisticated, that myth is quickly being debunked.


DMT: What are three key points from the report that you want readers to takeaway?


Kahn: Point 1: Fraudsters aren’t limited to one location of operations or form of attack. For example, they are attacking from data centers using sophisticated methods to hide their origins.


Point 2: Fraudulent traffic has a negative effect on both branding marketers and performance-based marketers. Branding marketers rely heavily on click-through rate (CTR), which is the number-one metric target for fraudsters. Performance-based marketers are spending money on lead generation techniques, only to find that ad fraud is watering down their ROI.


Point 3: While tech states like California and Texas not surprisingly ranked in the top three U.S. states with bad web traffic, Florida also appeared in our data. The commonality between the three states: They each have a large concentration of data centers. This large concentration of data centers was also the commonality for our European findings, where the largest sources of fraudulent traffic growth were countries with data centers (e.g., Germany, France, and the United Kingdom).


DMT: Were there any new ad fraud trends uncovered in the report?


Kahn: Attacks from data centers are popular due to the large number of data centers around the globe. New and unknown data centers are constantly popping up, making it difficult for some companies to accurately identify data center traffic.


Places you wouldn’t think (for example, Florida) are now hotbeds for bad web traffic due to their large concentration of data centers.


DMT: Were any past ad fraud trends debunked or confirmed in the report?


Kahn: The traditional narrative is that Russia, China, and India generate the bulk of fraudulent traffic. But our findings showed the biggest region of fraudulent web traffic growth during that time period was Europe, specifically Germany, France, and United Kingdom.