Adtech Middlemen are Aiding and Abetting Criminal Activity and Terrorism

"Adtech Middlemen are Aiding and Abetting Criminal Activity and Terrorism" filed under?"something everyone knows, but rarely says aloud."

We all know there's ad fraud and bot activity; and we all know there's trillions of fake ad impressions created to siphon large sums of money from large advertisers' digital budgets. Just last week, the VASTFLUX fraud research showed that the scheme was generating 12 billion faked bid requests per day. There's been 14 cases of CTV fraud over the last 2 years, all of them large schemes involving millions of spoofed devices and billions of faked ad impressions. And there's been dozens of other examples of diverse kinds of ad fraud, all at enormous scale.

The more important question is where does the money go? Imagine walking by a pot of gold left open by the roadside and there's nobody around. Would you do the right thing and walk on by without taking any or all of it? Note that there's no one around watching (no laws against ad fraud). Note that the pot of gold in this case is worth nearly $600 billion ($189 billion spent in digital advertising in the U.S. in 2021, nearly $600 billion in digital advertising worldwide). Note that there's no lock on the pot of gold and even the lid is left open, so it wouldn't take any effort for you to take some. And if take some, there's even folks who will help you carry it away and help you hide it.

Sound too good to be true? Well, it's not too good to be true; it's happening right in front of us with our eyes open. It's happening in digital advertising, particularly in the last decade when programmatic media buying was the primary form of buying digital ads. Not only is the fraud possible, it's also trivial. Take for example, CNBC reporter Megan Graham's experiment. In 2020, she set up a fake website, populated it with plagiarized articles (her own CNBC articles), got it accepted into 7 of 8 ad exchanges, and started showing ads from major advertisers like "Kohl’s, Wayfair, Overstock and Chewy."

Given all of the above, do you think that organized crime, nation states, and terrorists will "walk on by" and NOT take as much gold from this open pot as possible? Given the amount of money involved and the paucity of risk, this is a far better option than dealing with illegal arms or illegal drugs. And you won't even have to move physical product; digital ads are all just bits and bytes so they weight very little. ;-)

"digital ad fraud is like ChatGPT to AI; it's accessible to everyone and it's fun and easy to use"

We are dealing with criminals. Their top priority is making money. Morals be damned. Laws, standards, and guidelines be damned. And indeed society be damned too. We've all seen enough movies and TV shows to know this to be true. We've had glimpses of this over the years -- Boris, Daniel, Asher, and Matt. "They [advertisers] want to pay only a little and get a lot of traffic. If they don’t like it, he adds, 'they should go buy somewhere else.' If they want all human traffic, they should go direct to the publisher and pay more." "Let's spin up some more BS to Uber." Large scale operations create hundreds of thousands of fake websites with Wordpress templates populated with 100% stolen content and tens of thousands of fake mobile apps, often just direct clones of existing fraud apps. In some cases, the content is deliberately created to spread disinformation and hate. Not only can these sites now make money from digital ads, they can scale the moneymaking with ad fraud. With all these funds, they can continue creating more divisive content which harms society, like we've seen since 2016.

Adtech middlemen make money by taking tolls, a portion of the money spent. They sit in between the advertiser spending money to buy ads and the publisher which creates content to sell ads. Adtech middlemen make more money when larger numbers of ad impressions and larger numbers of dollars flow through their platforms. Most everyone knows that these platforms are likely NOT the ones creating the botnets and committing the fraud themselves. But, as you can imagine it is easy for these middlemen to "look the other way" and let others generate the large quantities of ads using fraudulent means like bot activity. Even when confronted with evidence of fraud, the middlemen cite fraud detection reports that say fraud is always less than 1%. They do this to preserve their revenue streams and profits.

Even if concrete evidence shows that ads and dollars are still flowing through to sanctioned websites or worse, piracy, porn, and child sexual abuse websites, the adtech middlemen will disclaim responsibility and tell advertisers to pay for even more services like brand safety detection tech. Despite all of these additional costs, vast sums of dollars still flow to criminals, even if the verification tech shows low fraud. You can start to understand that these verification services are not purchased for their accuracy of detecting fraud; they were purchased to help cover up the fraud (always less than 1%) so everyone can keep making money.

This goes beyond "turning a blind eye" or disclaiming responsibility for the last ten years. Knowing there's fraud and knowing that dollars still flow to sanctioned sites or worse, the lack of aggressive action on the part of adtech middlemen is in fact "aiding and abetting." Advertisers cannot rely on these toll-takers to "do the right thing." In fact, over the years, we've seen examples of NON-transparency by design. For example, nearly 90% of the seller accounts in Google's adsystem are marked as "confidential" which makes it hard to determine who the sellers are and therefore where the money went. That's not just "looking the other way" that's making it easy for bad actors -- i.e. aiding and abetting. The 2020 ISBA study showed a famous "unknown delta" of 15%. That meant they could not determine where the money went despite the fact that they were looking at a well-lit neighborhood (big advertisers and big publishers), not the rest of the programmatic ecosystem.

After reading the above, do YOU think the adtech middlemen can claim they "didn't know" any longer? Do you think you can rely on them to "do the right thing" when "the right thing" means their voluntarily giving up substantial revenue? I think it is pretty clear that the problem goes well beyond "looking the other way" or "disclaiming responsibility" and is more akin to "aiding and abetting." Advertisers, if YOU are not taking aggressive action to reduce fraud and determine where your ads and dollars are going, you too may be aiding and abetting criminals and terrorists. The previous tools -- legacy verification vendors -- are no longer adequate. Ask for more details, and upgrade your tools, so you can see better and do better. That way you won't be inadvertently "aiding and abetting" like the adtech middlemen.

Further examples: https://www.dhirubhai.net/today/author/augustinefou