Ad fraud a growing thorn in the side of our online economy

AS 2019 drew to a close, much of the gossip doing the rounds within the relatively small confines of the Irish advertising and media industry tended to lead back to Maximum Media, the online publisher founded by Mayo man Niall McGarry.

In case you missed it, back in November, Maximum Media ‘fessed up to artificially inflating the listenership figures for one of its business podcasts that was hosted on its flagship website, Joe.ie, in 2017. Sponsored by AIB, one of the podcasts in the series saw an unusual, significant spike in the listenership figures over the course of a 24-hour period.

It later emerged that this spike occurred after the services of a so-called ‘click farm’ were used to falsely inflate the listenership figures.

In an industry fuelled by fierce rivalry and the occasional outburst of begrudgery, a palpable sense of schadenfreude rippled through the Irish media and advertising ecosystem.

Eyebrows were raised, fingers were pointed and on the dark fringes of the advertising world, hushed and sometimes heated conversations were held, as industry folk dissected what the revelations meant for Maximum Media, the future for Irish online publishers and the biggest problem facing the wider digital industry: ad fraud.

In its defence, Maximum Media rushed to point out that this was an isolated incident and the person responsible for engaging the click farm had since left the company after management became aware of the incident.

Since coming clean, Maximum Media has also implemented a number of senior management changes, including the appointment of a new chief executive, with McGarry stepping aside from the day-to-day running of the Irish operations to focus on its UK business.

On the scale of digital transgressions, it probably ranks at the lower end. But it was serious enough for a number of advertisers and their agencies to suspend their advertising investment with the group, as they scrambled to seek reassurances that no other campaigns or sponsorship activities were tampered with — which they weren’t, according to the company.

On another level, however, the fallout has served to shine on the often seedy underbelly of the digital advertising industry, its obsession with often meaningless vanity metrics, and ad fraud.

With the right digital skills and technical know-how, ad fraud has become a relatively lowrisk, high-profit-making and recurring-revenue opportunity for anyone wanting to tap into the often murky and sometimes opaque digital advertising world.

Various research firms and cybersecurity experts have tried to identify and estimate the scale of ad fraud over the past few years.

In 2019, for example, the US-based Association of National Advertisers, together with the cybersecurity firm White Ops, estimated that advertisers would lose a staggering €5.2bn globally to ad fraud. But another global cybersecurity firm, Cheq, reckons that the true figure is a lot more, and estimated the 2019 losses to advertisers to be closer to a staggering €20.7bn.

While there is a big difference between the two figures, either way, it is clear that it has become a major problem for the marketing and advertising industry — and one that isn’t going to go away any time soon.

The discrepancy in the two estimates also speaks volumes about just how difficult it is to track what has become a very complex digital ecosystem, and a supply chain that has become both convoluted and tainted by many bad actors.

Unfortunately, it’s been this way for many years. Despite various industry-wide initiatives and tools like ads.txt, that are aimed at tackling the problem, the sector would appear to be engaged in a seemingly never-ending game of whack-a-mole with the cyber-criminals and fraudsters who continue to exploit the desktops and mobile devices of millions of consumers around the world with relative ease.

In recent years, wave after wave of ad frauds involving cookie stuffing, ad injection and domain spoofing have given rise to things like the Methbot and 3ve frauds.

Ad fraud, in all its different guises, defrauds advertisers of their hard-earned cash, lines the pockets of criminals and scammers, and in many cases denies legitimate publishers of much-needed advertising income.

Back in 2004, George Reyes, Google’s chief financial officer at the time, sounded the alarm bell when he said that ad fraud was the biggest threat to the online economy.

With today’s online economy now largely funded by advertising, Reyes’ assessment of the problem in 2004 is as valid now as it was then.

Anyone working in advertising, marketing or media has every reason to be concerned.