Why Even Exposed Ad Fraud Schemes Never Completely Die

Reemergence of Known Scheme Highlights Shortcomings of Ad-Tech's Response

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When Ad Age reported on a multi-million dollar ad fraud operation late last month, those behind the scheme shut it down immediately. But now, slightly more than three weeks after the story published, the operation is back in action.

Once again video ads in nearly invisible windows are being run on legitimate websites via banner ad buys. Such video ads can be sold for 20 times as much as the banner ads, with the fraudsters pocketing the difference.

Online security firm Telemetry, which uncovered the fraud, believes around 100,000 of these bogus ad impressions are now sold each day. The number is nowhere near where the operation stood at its peak, but giant brands such as Unilever are still paying for this inventory.

The fraud's resurgence brings to light a painful reality for the digital advertising industry: Even after ad fraud operations are exposed, they rarely go away completely. "They keep operating because somebody keeps mailing them a check," Telemetry Exec. VP Geo Carncross said, putting the blame on the intermediaries that continue to pay them.

One reason this happens is that ad-tech companies often do little more than stick known fraudulent websites on blacklists, a tactic that's easily circumvented by fraudsters. "Most of the fraud we find, there's nothing about the domain names itself that says it's going to be limited to those domains," Mr. Carncross said. For around $20 dollars, one could purchase a pre-built website and a new domain name to get around a blacklist, he said.

To show the still-ongoing fraud operation in action, Ad Age recorded Mr. Carncross' computer screen as he looked for traffic running in these nearly invisible 1x1 pixel windows, and then expanded the window to reveal the ads running within it:

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