High Speed Click Fraud: Over One Third Of All Internet "Traffic" Is Fake

Tyler Durden's picture




 

"When you bundle bots, clicks fraud, viewability and the lack of transparency [in automated ad buying], the total digital-media value equation is being questioned and totally challenged," warns one advertising group executive as the WSJ reports about 36% of all Web traffic is considered fake, the product of computers hijacked by viruses and programmed to visit sites. This means, simply put, that marketers, who are pouring billion of dollars into online advertising, are confronting an uncomfortable reality: rampant fraud... and the fraud is only going to get worse...

 

Via WSJ,

Spending on digital advertising—which includes social media and mobile devices—is expected to rise nearly 17% to $50 billion in the U.S. this year. That would be about 28% of total U.S. ad spending. Just five years ago, digital accounted for 16%.

The big question is whether attitudes will change if signs of fraud increase.

Billions of dollars are flowing into online advertising. But marketers also are confronting an uncomfortable reality: rampant fraud.

 

About 36% of all Web traffic is considered fake, the product of computers hijacked by viruses and programmed to visit sites, according to estimates cited recently by the Interactive Advertising Bureau trade group.

 

So-called bot traffic cheats advertisers because marketers typically pay for ads whenever they are loaded in response to users visiting Web pages—regardless of whether the users are actual people.

The fraudsters erect sites with phony traffic and collect payments from advertisers through the middlemen who aggregate space across many sites and resell the space for most Web publishers. The identities of the fraudsters are murky, and they often operate from far-flung places such as Eastern Europe, security experts say.

Big advertisers are in "crisis"

Chief Executive Vivek Shah, the chairman of the Interactive Advertising Bureau, said at the group's annual conference last month that Internet advertising was facing a "crisis."

 

...

 

"The clients we work with would love to spend more money in digital," says Quentin George, a co-founder of ad-technology consulting firm Unbound. "But until we give them more control and transparency on how the money is being spent, they will continue to have questions and hold money back."

 

...

 

"We're aware of the concerns within the industry about ad fraud and are working to address those concerns as they pertain to our business," a GM spokeswoman says.

One wonders just how "valuable" all those social media companies really are if the bots and fraud was removed? This isn't the first time we have discussed this, but it seems even the advertisers are now doubting the new word order of "social" and "mobile" as the panacea for ad spend.

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Mon, 03/24/2014 - 13:37 | 4586152 johnQpublic
johnQpublic's picture

please tell me this meaNS WE WILL SEE LeSS ADVERTISING AND LESS pop ups and adds running down the sides of every page

Mon, 03/24/2014 - 13:38 | 4586158 Canadian Dirtlump
Canadian Dirtlump's picture

You'll see more and more no doubt. It is funny to see this industry explode on a foundation of provable fraud - which is not only known by the likes of facebook et al, but encouraged by them.

Mon, 03/24/2014 - 13:54 | 4586216 WayBehind
WayBehind's picture

Yes, you will see more ads ... just ask Tyler about it :)

Mon, 03/24/2014 - 14:10 | 4586312 0b1knob
0b1knob's picture

Adblock Plus extension for Chrome browser.  Currently blocking 13 ads on Zero Hedge.   It blocks over 200 (!!!) ads on Youtube.  Free. Check it out.

Mon, 03/24/2014 - 14:11 | 4586322 TerminalDebt
TerminalDebt's picture

adblock blocks out the whole of facebook

Mon, 03/24/2014 - 16:54 | 4587145 Georgia_Boy
Georgia_Boy's picture

Dunno if it's been posted here yet, but check out the twitter user exmediaman for more expose of fraud in new media. (Pro tip: To use twitter, it helps if you can type and hold your nose at the same time.)

Tue, 03/25/2014 - 07:01 | 4589248 N2OJoe
N2OJoe's picture

We get people all the time wanting to advertize for us on the web and they all want us to pay per click. Having grown up with computers, I knew all along how easy it is to scam such a system and we eventually found one offering a pay-per-call system.

Much easier to tell if/when they're bullshitting you this way...

Mon, 03/24/2014 - 20:25 | 4588117 Papasmurf
Papasmurf's picture

On windows, run notepad as administrator.  With notepad, open c:/windows/system32/drivers/etc/hosts

Edit hosts to add to the list:

127.0.0.1  facebook.com

 

 

Mon, 03/24/2014 - 14:24 | 4586395 Ralph Spoilsport
Ralph Spoilsport's picture

Chrome browser is a g()()gle product so, hell no. Adblock on Firefox works double plus good.

Mon, 03/24/2014 - 14:32 | 4586436 0b1knob
0b1knob's picture

Comodo Dragon (which I use) and Iron browser are Chrome clones with all the spyware cut out.   Just change the DNS servers (IMPORTANT!) and you are out of the Google spy system.   A tunneling encrypted internet connection helps too. See ZenMate extension.

Mon, 03/24/2014 - 18:18 | 4587575 TruthInSunshine
TruthInSunshine's picture

With adblock+, ghostery,etc., I haven't been able to use any iteration
of Firefox in a long, long time - it is astonishingly slow.

This is a common, well-known problem running adblock+ w/ Firefox.

Does anyone know if there's a way to resolve it?

Thanks.

Mon, 03/24/2014 - 14:10 | 4586314 max2205
max2205's picture

Perfect.......this will end well

Mon, 03/24/2014 - 14:23 | 4586388 codecode
codecode's picture

Support Tyler - click on banksta ads

Mon, 03/24/2014 - 13:38 | 4586160 Murf_DaSurf
Murf_DaSurf's picture

 

 

This is a fake comment

Mon, 03/24/2014 - 14:18 | 4586358 fonestar
fonestar's picture

Everything you cannot touch or hold is fake.  Oxygen, hydrogen, helium, ozone, atoms, electrons.  It's all fake.

This has been well established by the ZH community.

Mon, 03/24/2014 - 14:24 | 4586386 insanelysane
insanelysane's picture

I wouldn't say it's fake but it is easier to lose; See bitcoins "contained" at Mt Glox or radiation "contained" at Fukijima or German gold held in US vaults.

Mon, 03/24/2014 - 15:24 | 4586700 fonestar
fonestar's picture

fonestar has never lost a Bitcoin he didn't like.

Mon, 03/24/2014 - 16:14 | 4586949 Dave
Dave's picture

Why do you always write in the 3rd person?

Tue, 03/25/2014 - 00:56 | 4588940 Vice
Vice's picture

" GEORGE LIKES SPICY CHICKEN"

Mon, 03/24/2014 - 14:36 | 4586469 Slave
Slave's picture

Strawman 101. Right there.

Mon, 03/24/2014 - 15:25 | 4586703 fonestar
fonestar's picture

fonestar can play simplistic literalist too you see.

Mon, 03/24/2014 - 14:23 | 4586390 astoriajoe
astoriajoe's picture

very clever. Topical yet still artificial.

You should consider going public.

Mon, 03/24/2014 - 13:40 | 4586165 slotmouth
slotmouth's picture

Download adblock extension, it will change your entire internet experience.

Mon, 03/24/2014 - 13:50 | 4586203 Groundhog Day
Groundhog Day's picture

All I know is, I've pretty much alsways had an up to date phone and over the years have never...ever clicked on an Ad.  Either the advertisors are idiots or the Agencies have the greatest sales ppl

Mon, 03/24/2014 - 14:33 | 4586446 TideFighter
TideFighter's picture

Reverse it. 1/3 ISN'T Fraud. Fixed it.

Mon, 03/24/2014 - 13:38 | 4586157 TruthInSunshine
TruthInSunshine's picture

Long ChicksWithClicks.com !

Mon, 03/24/2014 - 13:39 | 4586162 krispkritter
krispkritter's picture

Online advertising fraud? Let me Google that...

Mon, 03/24/2014 - 13:41 | 4586167 madcows
madcows's picture

Sure.  Next thing they'll tell us is that companies track our web traffic in order to spam us.

Mon, 03/24/2014 - 13:41 | 4586168 buzzsaw99
buzzsaw99's picture

hell if you remove the fraud the entire stock market has no value

Mon, 03/24/2014 - 13:47 | 4586194 Canuckistan Al
Canuckistan Al's picture

I'd hazzard to guess that if fraud, in all things was non existent / eliminated, world GDP would probably be half of what they claim it is.

Mon, 03/24/2014 - 13:41 | 4586170 Took Red Pill
Took Red Pill's picture

No surprise. I've used Google ads for my business and swear it was bogus. Plus, how do you prove or disprove it? You have to take their word on it how many people clicked on your ad.

Mon, 03/24/2014 - 13:54 | 4586191 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

I tried it and came to the same conclusions.

I asked Google how they kept your ad competitors from using up your daily click allotment with phony clicks and never got a response.

Mon, 03/24/2014 - 13:48 | 4586193 TruthInSunshine
TruthInSunshine's picture

GoogleAnalytics states 1,000 clicks costs $5 and should result in 87 sales.

*I made that up but it can't possibly be any more ridiculous than what they really claim.

ClickFraud.com, bitchez!

Mon, 03/24/2014 - 14:01 | 4586266 cleverlemming
cleverlemming's picture

You need to discriminate between display and search network when you make an assertion like this about Google or Bing. Apples and oranges. The first step to creating a new campaign is to turn off the display network. There's motivation for click-fraud in programs like adsense but the only motivation in google or bing search might be to deplete your competitor's ad budget. 

Mon, 03/24/2014 - 15:30 | 4586727 kchrisc
kchrisc's picture

In 2002, or maybe 2003, I helped a company signup for the new AdWords thing. They stopped it after just over a month.

Their product was in a very unknown, at the time niche, and yet they had to bid over $3.84 per click or something. They extrapolated their costs and determined that it would be better to spend the budget on "standard" methods locally and expand and move it from city to city.

They are now a very successful national company.

I talked to one guy a while back while waiting for a flight, and he said that not only does it not work, and is vulnerable to fraud, but "you don't even get brand recognition" because of the ad display limitations.

He said that he had his Web developer, an AdWords supporter, created a duplicate of Adwords with his product along with competing products "advertised." He then put those on his reasonably well trafficked industry/product related blog site. Result: Nada! Not one click he said on any of the ads.

My conclusion, after about 12 years of watching is that the whole thing is a fraud. And I would say, based on other knowledge, a scam run by and for the intelligence communities.

 

""Can I get an AdWord on 'guillotine?'"

Mon, 03/24/2014 - 15:48 | 4586791 TruthInSunshine
TruthInSunshine's picture

Not to mention that 99.9% of people resent internet ads, and it most likely leads to resentment, rather than interest, for/in the product/brand.

Mon, 03/24/2014 - 13:45 | 4586172 Ghostdog
Ghostdog's picture

"The big question is whether attitudes will change if signs of fraud increase." The FED has done the same thing over the last several years. Have attitudes changed? No. There is your answer.......

Mon, 03/24/2014 - 13:44 | 4586181 Ralph Spoilsport
Ralph Spoilsport's picture

Does Shah and the rest of the idiots at the Interactive Advertising Bureau actually think people visit Facebook to look at advertising?

Related: Bob Cringely fired this volley at Zuckerbergerstein today about DeepFace:

How are you supposedly fighting the NSA and moving invasive data mining forward in leaps and bounds simultaneously, Zuck? I'm going to write my own app and call it DeepCheeks, and I'll give you one guess what that'll let you recognize with 97 percent accuracy.

The ad situation is worse on mobile devices than desktops. This business model is broken.

Mon, 03/24/2014 - 13:45 | 4586185 SmittyinLA
SmittyinLA's picture

I wonder how much traffic is NSA mandates? 

It wouldn't surprise me if all those "daily updates" aren't uploads of my privacy.

Mon, 03/24/2014 - 13:51 | 4586208 TruthInSunshine
TruthInSunshine's picture

I just ordered a t-shirt from the NSA store that reads "Who just let loose a Stellar Wind?"

Mon, 03/24/2014 - 13:46 | 4586187 22winmag
22winmag's picture

Showing hits for the last 24 hours:

-Everything

-Spam

-No spam

-Spider

-No spider

-No spam, no spider *

-Users logged in

-Referrer from search engine

-Referrer from ext link

 

Mon, 03/24/2014 - 13:46 | 4586190 bankonzhongguo
bankonzhongguo's picture

I had a business that went into this "social media" realm.

My advice.  If you want "a Like" - get a dog.

It's all a boondoggle to otherwise "sell" to addle-minded consumer pods that are already in debt.

The valuations on these companies is ridiculous - worst than the original tech bubble of the late 90's.

Mon, 03/24/2014 - 13:49 | 4586202 gjp
gjp's picture

And what about mistakes on touchscreens.  I've clicked through on plenty of ads (always without intent) by accident while trying to navigate the web on a mobile device.  I'd say that accounts for another 1/3.  Maybe the final third is legit but somehow I bet it's a lot less than that.

Mon, 03/24/2014 - 16:46 | 4587111 Georgia_Boy
Georgia_Boy's picture

Same here, all the pop-ups I get on Zerohedge are one of two things: 1. Mistakes made by me a long time ago, but the spambot still thinks I really do want to see their top 10 dating sites or whatever, 2. On my home machine, things the kids clicked on. But keep trying boys, hey someday 30 years from now I might even buy something.

Mon, 03/24/2014 - 13:51 | 4586206 Yen Cross
Yen Cross's picture

  I guess the Faceplant algos didn't like that article too much.

 FB stock quote - Facebook, Inc. stock price - NASDAQ.com

Mon, 03/24/2014 - 13:52 | 4586209 ebworthen
ebworthen's picture

Monkey...want...banana.

Mon, 03/24/2014 - 13:54 | 4586214 Kirk2NCC1701
Kirk2NCC1701's picture

Including ZH hits?  ;-)  ;-)

Mon, 03/24/2014 - 13:56 | 4586225 syntaxterror
syntaxterror's picture

FraudBook down 5% today. Queue up the buy orders! It's on sale!

Mon, 03/24/2014 - 13:56 | 4586226 slightlyskeptical
slightlyskeptical's picture

I think it would be great if everyone devoted an hour a day to just clicking ads.

Mon, 03/24/2014 - 13:56 | 4586231 Godisanhftbot
Godisanhftbot's picture

 67% of all postings on chat boards are fake.

 

 the other 33% are idiotic.

Do NOT follow this link or you will be banned from the site!