Fraudulent Ad Networks Will Persist, Kaiser Fung Contends

Fraudulent ad networks are unlikely to be eradicated anytime soon, Kaiser Fung, Associate Program Director for the Master of Science in Applied Analytics, contends in an article in the Harvard Business Review.

These fraudulent activities have benefitted from the proliferation of cloud services. Fung explains, “almost anyone can install a website, register it with an ad network, and start earning dollars from advertisers. The bad guys write code that generates fake websites, typically simple webpages stuffed with banner ads and then start collecting on ad impressions, most of which aren’t even real humans visiting the site. The exchanges are designed to run themselves without much intervention, so the bad guy activities often elude detection.”

Though spotting these fake ad networks is relatively easy, little has been done to tackle the problem. Fung attributes this to several factors: first, “spotting and shutting down offending site networks is a bit like playing whack-a-mole. Knock one out, another pops up...If and when the industry gets serious about combating fraud, a technological rat race will develop, similar to the one between spammers and anti-spammers. Despite the best efforts there, spam never goes away.”

Fung notes an additional “insidious” reason why there aren’t many incentives to fix the situation: “marketers have little motivation to deflate their own statistics...Also, this illicit activity generates unintended profits for everyone up and down the supply chain.”

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