Digital Paid Media is a fraud Part 2: Russians cost ad networks 180 million.

With the use of ad blockers on the rise, malware still rampant and Facebook constantly overstating how well its ad metric works it's a wonder more clients aren't shifting their digital budgets elsewhere.

We've already reported how just three seconds counts as a hit in Facebook's world, even if two of those seconds was spent scrolling past it. Yay auto-play! And we've already told you that programmatic advertising can place your ad on a music piracy, or sex trafficking site. Still the clients don't learn and the ethically bereft agencies keep charging them a premium for the privilege.

Perhaps it will change your mind if I mention 1983's 2016's biggest bogeyman? That's right, I'm talking about Soviet hackers! Duh-duh-duuuuuuuuuuun.

Despite what many believe about the U.S. Presidential election, zero evidence has been presented publicly that Russia hacked the election or was even behind Wikileaks email dump of John Podesta. When it comes to stealing ad revenue, following the money is a lot easier to do. However, it needs to be pointed out that the cybersecurity firm hasn't confirmed Russia to be behind it 100% yet but the idea of it being a couple of Russian hackers isn't as farfetched as say, an entire government behind it.

According to The New York Times "researchers say that a Russian cyberforgery ring has created more than half a million fake internet users and 250,000 fake websites to trick advertisers into collectively paying as much as $5 million a day for video ads that are never watched." Let that sink in. Five million dollars a day. And it's still going on. White Ops, a cubersecruity firm discovered this scheme, which one reporter likens to says "it is the largest and most profitable fraud operation yet to strike digital advertising. The company says the scam, which it believes originated in Russia, is using a so-called bot net to fake views of as many as 300 million video ads per day and trick advertisers to pay for views that were never seen by humans."
Unsurprisingly though, it should be pointed out that White Ops CEO, Michael Tiffany, believes this isn't state run but probably a criminal ring behind the scam. At least someone is objective enough to use Occam's Razor. He does however, believe someone with inside knowledge of the ad world, or media buying industry must be involved. "...someone with a deep understanding of the industry is likely behind the scam. "This shows an incredible, absolutely insider's mastery of digital advertising," he said. "It requires multiple skills."

Here's how the scam started. Did I mention it's still going on?

The criminals acquired massive blocks of IP addresses -- 500,000 of them -- from two of the world's five major internet registries. Then they configured them so that they appeared to be located all over the United States.
They built custom software so that computers (at those legitimate data centers) acted like real people viewing those ads. These "people" even appeared to have Facebook accounts (they didn't), so that premium ads were served.
Hackers fooled ad fraud blockers because they figured out how to build software that mimicked a real person who only surfed during the daytime -- using the Google Chrome web browser on a Macbook laptop.

Digital Paid Media is already a dicey prospect for real metrics. No matter what it says on the Keynote slide, if it's built on faulty assumptions, it doesn't matter. More over, consumers do not want malware, on your computers and programmatic ads are so horrible and in invasive thanks to cookies they make direct junk mail seem worthy of a Gold Lion, so they've opted to block your media. Like all online behaviour, the user has adapted. Ad views and clicks have been faked for so long that Facebook, one of the biggest companies in the world, has had to apologize twice and promise to fix it. Programmatic advertising is so sloppy in the way it places ads, that major brands like Chevrolet and American Express found their advertising on illegal pirate websites right next to mail order bride ads.
But if that isn't enough, the platform for serving up these ads across the board is so easily exploitable that a couple of adidas-clad entrepreneurial Ruskies have cost you 180 million dollars. Since September. And it's still going on.
Isn't it about time we got serious about fixing the issue?

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