Don Marti

Thu 12 Jun 2014 05:52:09 AM PDT

Adtech fraud: you can't cheat an honest man

More news from the world of online ad fraud. Florida-Based Ad Fraudsters Skim Millions From Advertisers, Then Disappear: Some of the globe's most recognizable brands—including Oreo, GlaxoSmithKline, Burger King and Sprint—were bilked out of millions of dollars by a Florida company that used fake websites to skim from the ad-tech ecosystem.

Naturally, the industry's response to fraud is to turn up the creepy. (adtech, privacy, fraud control: pick two). Remember how they always used to say ad tracking was anonymous? Well, not so much any more. Ari Jacoby, CEO of Solve Media, writes, Fortunately, a new trend has emerged where users are ‘logged in’ to sites through existing social media accounts like Facebook or Google+. Publishers who also utilize the log-ins are then able to link the user to a logged in account, verifying humanity. In addition, social log-ins give advertisers access to a bevy of information about consumers and allow them to serve targeted ads.

Making adtech creepier makes it less vulnerable to fraud, but only by compromising privacy.

But where does adtech fraud come from in the first place? Unfortunately, the fraud we see, in examples like the Florida story, is just the mushroom on top of the fraud fungus that is inherent in the fundamental value proposition of adtech.

There has long been an understanding of reciprocity between advertisers, publishers, and the audience. Advertisers get some attention from the audience, and in exchange, they pay publishers to hire people to write articles, take photos, and all that good stuff.

If you read a collection of short stories, you're probably reading work that was originally paid for out of some company's ad budget.

Adtech is enabling advertisers to break the deal. Instead of paying for content in order to reach a user, the advertisers pay the surveillance marketing industry to track users onto increasingly skeevier, cheaper sites, and show the ads there. (And incidentally, instead of paying an ad agency 15%, they're paying 55-75% to adtech intermediaries.) As they say on the Internet, What could possibly go wrong? (Of course, not every ad impression ends up on a bottom-feeder sites, but the original sites have to lower their ad rates to compete.)

So this post is a longer way of explaining that thing I posted on Twitter yesterday. Privacy tech such as Privacy Badger can help fight fraud in a publisher-friendly way, but only by squeezing out the third-party tracking that powers adtech in the first place.

More: adtech, privacy, fraud control: pick two?