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How the Ad Industry is Coming Together to Stop Losing Money

TAG CEO Explains Why Sharing Data and Intelligence is the Key to Thwarting Ad Fraud

Concerns over ad fraud are on the rise, and with good reason. The amount of lost revenue on fraudulent web traffic is expected to soar to $16.4 billion this year, according to research by WPP. That number is more than double the $7.2 billion the Association of National Advertisers estimated would be lost due to ad fraud just last year. While it’s often difficult for advertisers and publishers to quantify the financial impact fraud has on them personally, the industry has started working together to combat the issue.

The days of the shady fraudster operating out of a desolate basement clicking on ads is long gone. Believe it or not, ad fraud is well on its way to becoming one of the largest organized crime businesses in the world, second only to the drug trade. “It's really the hi-tech, well-funded criminal networks that are presenting the greatest challenge to the digital advertising ecosystem,” said Mike Zaneis, President and CEO of the Trustworthy Accountability Group (TAG). “Criminals are always looking for the path of least resistance, and unfortunately, they found our industry. They've really made a home here because it's been highly profitable. So, there are very sophisticated, well-funded, organized criminal networks that are perpetrating the largest, most complex ad fraud schemes.”

Ad Fraud is Evolving

You may recall last winter’s Methbot attack, a sophisticated take on traditional click fraud that wreaked havoc on the ad industry. “This attack was different in nature and scale than previous scams, and one of the largest the industry had ever seen,” said Zaneis. Some reports estimate that the criminals were netting between $3 and $5 million a day by siphoning legitimate advertising revenues from over 6,000 websites. Fortunately, TAG played a major role in putting a stop to the Methbot operation.

At the end of the day, no one company can solve this alone, including us, so we help drive collaboration around information sharing. It’s really a crowd-sourced effort.
Mike Zaneis, President and CEO, TAG
 

“Working together with White Ops, we activated the information-sharing infrastructure we built over the last two years and organized an emergency briefing on the fraud operation for more than 180 anti-fraud executives at leading companies across our industry so they could evaluate and respond to this threat in near real time,” explained Zaneis.  “We also expedited our review of the IP addresses involved for inclusion on TAG’s blacklist of data center IP addresses that are significant sources of fraud.”

Thanks to TAG and actions like this, the fraudsters are on guard.  Founded in 2015, TAG is a cross-industry group born out of the 4A’s, ANA, and IAB to spur transformational improvement across the digital advertising ecosystem, focusing on four core areas: eliminating fraudulent digital advertising traffic, combating malware, fighting ad-supported Internet piracy to promote brand integrity, and promoting brand safety through greater transparency.

Sharing Intelligence to Stay Ahead of the Bad Guys

“At the end of the day, no one company can solve this alone, including us,” said Zaneis. “So, we help drive a lot of collaboration around information sharing about threats and developments of new technologies and protocols and help the industry collectively fight fraud and keep the money from going to the criminals. It’s really a crowd-sourced effort. We have something called our data center IP list and we source information from 12 to 15 major ad platforms every month about known sources of non-human traffic. We launched that a little over a year ago with about 500,000 IP addresses. These are IP addresses that only generate non-human fraudulent traffic. Today that list has over 65 million IP addresses and that only happens when you have a robust information sharing system.”

It’s this level of collaboration and transparency that has been crucial in helping thwart ad fraud. “We work closely with our members and other industry watchdog groups to openly share this data and intelligence,” explained Zaneis. “Given the advanced features of many of these ad schemes, we believe TAG's information sharing platform allows responsible industry actors to mitigate potential threats quickly and effectively.”

Data like this is helping police the ad industry. In addition to keeping track of IP addresses, there are other data points and algorithms the industry can use to identify deviant activity and abnormal trends. “Things like spikes in activity at certain times in the day when you wouldn't expect it, or from specific IP addresses or different regions of the world when you suddenly see a spike in activity from, say Southeast Asia, when your website doesn't do a lot of business there; there are a lot of red flags and data helps you identify them,” said Zaneis. “Again, it's really about sharing those data points and red flags across the industry.”

Relying on so many companies to help tackle the ad fraud problem means TAG needs to understand and verify the buyers, sellers and intermediary companies applying to participate in their registry. “When you’re jointly working to tackle something as big as ad fraud, the first thing you must do is create transparency across the ecosystem,” stated Zaneis. “Again, data plays a big role there.”

“We partnered with Dun & Bradstreet to essentially create the ‘White Pages’ for the digital ad ecosystem,” explained Zaneis. “D&B powers our background checks to ensure companies registering with us are legitimate and that we have an accurate idea of who the right contact within the organization is that can act as TAG’s compliance officer,” stated Zaneis.

This level of detail and accuracy is made possible by D&B’s proprietary business identifier known as the D-U-N-S® Number, which helps TAG keep the focus on fighting fraud without worrying any of its members are not legitimate. “Because the supply chain is so global in nature, we also require an international database of businesses and business contacts to fight ad fraud on all fronts,” said Zaneis. “D&B has been a been a key partner in our ability to really grow our registry across the globe.”

We’re All in This Together

It’s important to remember that fraud is not a publisher problem or advertiser problem, it’s an industry problem. Only by working together and remaining vigilant can the industry triumph over the bad guys. Zaneis was sure to reiterate this several times. “Everybody has a responsibility in getting us to a more trusted ecosystem. We’re not a fraud vendor, our mission is to bring the industry together to share data and information that helps us operate in the safest environment. Companies that can achieve this receive our verified fraud seal, and we hope to see every company earning this as we move forward. There's a synergistic and network effect of having more people fight fraud. So, growth is key for us.”

 

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