Advertising Week 2015

Can the Ad Industry Beat the Black Market in Ad Fraud?

Sophisticated Black Market Operations, Complete with Money Laundering, Will Prove Hard to Beat

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Bill Koenigsberg
Bill Koenigsberg Credit: Courtesy

The rise of digital advertising is the reason for the rampant ad fraud today, and though the exact solutions to eliminate it might not be known, everyone agrees that transparency in the buying process is critical. The problem, according to panelists during the Advertising Week Trust Forum Wednesday afternoon, is that's going to be difficult to achieve, given the sophistication of some ad fraud operations.

"There's a tremendous amount of positives coming out of programmatic, but it's been called a dark alley and a black box and there's a reason for that, because it makes it hard for buyers and sellers to understand what's happening in the marketplace," said Andrew Altersohn, CEO at AD/FIN, a market intelligence company.

The industry, he said, will need to aspire for full transparency for fraud to truly be exposed. "The world can't be half transparent -- that's like being half pregnant." He did recognize that there will likely be some grey areas and that it's nearly impossible to shed light on every detail of digital buying, but the goal should be transparency from beginning to end in the process.

"We need to regain a level of trust, and it's got to go pretty far to regain what's been lost. Everyone doesn't need to know every single part of the cost to do business, but there needs to be a big swing," added Mr. Altersohn.

Bill Koenigsberg, president, CEO and founder of Horizon Media, said that "the industry is ready" for transparency and has already made progress on transparency, but that there are two types. One is "how many bites are being taken out of the apple," which he said is a figure advertisers, publishers and agencies are trying to figure out. "In a year from now if that issue isn't put to bed I'll be surprised."

Mr. Koenigsberg said that the more complicated type of transparency is transparency on issues like fake traffic and viewability, which he said will take time to fix. "As long as everyone understands where the landmines are and we continue to work towards solutions, that's the road we want to be on."

While the industry is a ways off from solving the fraud problem, some were at least optimistic that many of the tools needed are already in place, it's just a matter of creating a proper trail from the beginning of digital ad buys to the end.

"The digitizing of media has created a trail, a digital signal for everything, " said Mr. Altersohn. "That means we can do things to analyze and solve problems with fraud….it's just a matter of connecting the dots, and we're in a good position and we understand the issues better than we did before."

Mr. Koenigsberg said that one area of focus to bring transparency is following the money trail from the beginning: "Tracing the money from point A to point Z and making sure it's going to the proper place with real traffic. That's the kind of checks and balances we need."

It should be no surprise, though, that following the money trail is easier said than done. Tamer Hassan, co-founder & chief technical officer at White Ops said that the challenge is that there are so many layers to the buying process and the fraudster's schemes that it's easy to set up what's essentially a money laundering system. It may be legit at the beginning, he said, but somewhere along the lines someone can set up a fake site with a bot running, and mid way through, fraud happens.

"Cybercrime didn't used to be like it is now. There's a real market in place now," said Mr. Hassan, adding that the market has become so sophisticated that fraudsters with big operations even have customer-service capabilities now.

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