It’s a big win for online advertisers who rely on algorithms and safe networks to place their digital banners.
The FBI, in coordination with tech giants like Google, have shuttered a fake ad ring responsible for millions of dollars’ worth of false impressions. The crew, known as 3ve, used botnets, hijacked data centers and created their own websites to defraud advertisers.
Of the eight named conspirators, three are already under arrest and await extradition to the United States.
The news is part and parcel of the internet’s wider struggle to highlight authenticity and honesty—and remove manipulative, “fake” parties.
According to the DOJ, the activity, which involved more than 5,000 fake domains and 1,900 computers, occurred between September 2014 and December 2016. The defendants allegedly also leased more than 650,000 IP addresses, resulting in more than $7 million in revenue from fake advertising.
A second scheme, which involved defendants allegedly using malware-infected computers to run automated ad-fraud schemes without users’ knowledge or consent, occurred between December 2015 and October 2018, reaching more than 1.7 million computers and resulting in $29 million in payments for fake digital ads.
“As alleged in court filings, the defendants in this case used sophisticated computer programming and infrastructure around the world to exploit the digital advertising industry through fraud,” U.S. Attorney Richard Donoghue said in a statement. “This case sends a powerful message that this office, together with our law enforcement partners, will use all our available resources to target and dismantle these costly schemes and bring their perpetrators to justice, wherever they are.”
The action highlights a real problem digital marketers and advertisers face.
[FREE GUIDE: 3 essential strategic changes for email success]
Ad fraud is the world’s most lucrative yet low-risk form of criminality today. Billions are stolen every year by people and companies that exploit the complex systems used to buy and sell digital ads. But it’s rare for perpetrators of ad fraud schemes to face criminal charges or serious consequences. That’s one reason why ad fraud is on pace to be eclipsed only by the illicit drug trade in terms of annual revenue, according to the World Federation of Advertisers. An estimated $19 billion will have been stolen this year by ad fraudsters.
“Ad fraud is one of the most profitable crimes with the least amount of risk,” said Tamer Hassan, the chief technology officer of White Ops.
With today’s charges and the takedown of 3ve’s systems, the Department of Justice is sending a message that it now recognizes ad fraud for what it is: a global criminal industry that’s stealing billions with impunity and little fear of prosecution.
Despite the arrests, the threat remains for advertisers.
“I don’t pretend any single action will take care of the challenge,” [Scott Spencer, a Google product manager] said, though he is optimistic that a push from law enforcement can deter some would-be fraudsters.
In the case of 3ve, he likened the operation to a professionalized company created to steal advertising dollars.
“In many ways this was operating like a corporation or a company where they had diversified tactics where they were trying to maximize their profits and rapidly scale the way they were creating invalid traffic,” he said.
Google highlighted its leadership and commitment to eradicating ad fraud with a report it published.
The report highlighted a passion for truth and transparency—as well as collaboration between tech companies.
It read, in part:
Trust and integrity are critical to the digital advertising ecosystem. Investments in our ad traffic quality systems made it possible for us to tackle this ad fraud operation and to limit the impact it had on our clients as quickly as possible, including crediting advertisers.
3ve’s focus, like many ad fraud schemes, was not a single player or system, but rather the whole advertising ecosystem. As we worked to protect our ad systems against traffic from this threat, we identified that others also had observed this traffic, and we partnered with them to help remove the threat from the ecosystem. The working group, which included nearly 20 partners, was a key component that shaped our broader investigation into 3ve, enabling us to engage directly with each other and to work towards a mutually beneficial outcome.
Google also promised to continue to crack down on bad actors on its digital ad platform.
We’ll continue to be vigilant, working to protect marketers, publishers, and users, while continuing to collaborate with the broader industry to safeguard the integrity of the digital advertising ecosystem that powers the open web. Our work to take down 3ve is another example of our collaboration with the broader ecosystem to improve trust in digital advertising. We are committed to helping to create a better digital advertising ecosystem — one that is more valuable, transparent, and trusted for everyone.
The moves come as tech and media companies continue to struggle with the problem of fake news and transparency on their platforms. Instagram has introduced new features to eliminate fake followers and reduce the reach of unscrupulous influencers. Facebook has struggled to espouse transparency after a year of data misuse scandals and executive missteps.
How are you working to highlight transparency, PR Daily readers?