Advertising now attracting the attention of organised crime (really)

After drugs digital advertising fraud is now large enough to attract the attention of the mob

The advertising business just gets more and more disrupted on an almost daily basis – goodness knows what will happen when City analysts find out…organised crime has..

From eConsultancy “Ad fraud is not a new topic, but as some U.S. Senators who are members of the powerful Senate Banking Committee see it, action is needed to prevent ad fraud from ballooning into one of organized crime’s most lucrative businesses.

Ad fraud gets the attention of organised crimeIn a letter to the Federal Trade Commission (FTC) urging the agency to look into ad fraud, the Senators suggested “It remains to be seen whether voluntary, market-based oversight is sufficient to protect consumers and advertisers from digital advertising fraud.”

The Senators are concerned that ad fraud, which is estimated to be costing advertisers billions annually, could eventually lead companies to pass the costs of fraud on to consumers in the form of higher prices.

They are also concerned that as fraudsters flood the online ad market, consumers will be at greater risk of having personal information stolen and abused.

“Here’s an amazing fact: by 2025, the digital ad market could be 2nd only to drug trafficking as largest revenue source for organized crime” – Mark Warner (@MarkWarner)

While digital ad fraud has been around in some form or another since digital ads first appeared, it appears to be becoming more lucrative and complex.

There’s more digital ad inventory than ever, and many advertisers are pouring more and more money into digital spend. At the same time, publishers and advertisers have embraced programmatic ad buying.

According to Senator Mark Warner of Virginia, this makes for a dangerous combination. He told the Wall Street Journal…

“This is a $60 billion industry, and some of the fraud numbers suggest that 10% of that is being wasted. And you’re seeing some of the same tools [we saw] in stock manipulation. This needs to be looked at.”

Warner likens the ad fraud problem to the 2008 financial crisis, and suggests that “some of the tech community has swept this under the rug,” though he admits that he and other lawmakers have a lot to learn about the subject before the possibility of legislation should be put on the table.

But is ad fraud really a problem that can legitimately be compared to drug trafficking? That isn’t so clear.

The industry is well aware of the issue, and many parties are working to mitigate it.

The good news is that digital advertising is one of the most accountable forms of advertising, so prudent advertisers have many opportunities to ensure that they’re not being taken for a ride.

So what explains the fact that advertisers are estimated to be spending billions on fraudulent ads that aren’t being seen by real people? It’s simple: in most cases, ad prices reflect advertisers’ knowledge that fraud and ad blockers will prevent 100% view ability.”…more