Digital advertising is advancing to unbelievable heights, and ad fraud scams are not that far behind. Billions of dollars are lost to ad fraud every year. The last ten years have seen some of the biggest advertising frauds in the history of digital marketing.
Here are the top 3 advertising frauds:
Said to be the most significant ad fraud to date, Methbot is a scheme carried out by Russian criminals who looted the advertising industry of $3 - $5 million per day. Caught by the White Ops (a cybersecurity firm), the operation was dubbed Methbot due to the repeated usage of the term “meth” in their code. The crew was named “AFK13” or Ad Fraud Komanda.
Under the disguise of fake domains, URLs and the tags of famous companies like Vogue, they effectively tricked advertising networks into buying their “ad space” (which is usually done by a bidding process) and put up videos, which were then watched by fake viewers (bots). This forced both the advertisers and the publishers to pay the supposed premium publisher sites.
With more than 6000 domains, 250,267 URLs and 570,000 bots, the hackers put in their all to make this mission a success. These bots were found to watch as many as 300 million video ads a day with an average CPM of $13.04. The fraudsters designed the bots to replicate human behaviour by placing fake social profiles and timed clicks. Illegally obtained IP addresses were used to create the illusion of being located in several American households.
White Ops detected this fraudulent activity in September 2015. However, it came out in the open only in October 2016.
The term ‘Xindi’ was taken from the last Star Trek series on television - a race of aliens that evolved into five subspecies and formed an alliance.
Pixalate, a company working for fraud protection, noticed abnormal traffic in October 2014 from sites of well-reputed organisations and educational institutes like the Fortune 500 companies and Columbia University.
Xindi is a Windows-based botnet which produces fake viewable ad impressions to advertising networks. It acts like a virus, affecting the host machine and switching them into botnets themselves. It still hasn’t been found how Xindi managed to control these well-known organisations' IP addresses. It affects the “Amnesia” vulnerability in Open RTB advertising protocol, by delaying the reports of the impressions and then flooding them all within a limited period. This makes it very difficult to detect.
Pixalate claims that Xindi has produced almost 78 billion impressions.
Caught in 2013, ZeroAccess Botnet is a Trojan horse computer malware, created for click fraud and Bitcoin mining. The botnet had successfully infected more than 1.9 million computers.
The estimated profit was found to be around $100,000 per day, counting only their click fraud activities. Bitcoin mining took around 2.7 million dollars per year.
However, Symantec, a cybersecurity firm, discovered a flaw in its peer-to-peer architecture and managed to take off more than half a million computers from its network in July 2013. In December, more organisations like the FBI and Microsoft put efforts into crushing the operation. However, they managed to revive themselves once more between March 21 and July 2, 2014. They also began to show activity in January 2015.
These scams just prove how rapidly technology is developing and how much is at stake.