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BizReport : Internet : October 03, 2013

Study: Fraudulent impressions top $3 billion mark

A new study out from MdotLabs puts a dollar value on fraudulent traffic and fake ad impressions - and it's in the billions. Not only that but some of the biggest brands in the US are falling victim to what researchers call Pay-Per-View (PPV) fraud.

by Kristina Knight

"Fake display-ad impressions are estimated to account for about 30% of overall online traffic," says Timur Yarnall, CEO and co-founder of MdotLabs. "That puts display fraud waste at $3.6 to $4.5 billion annually in the US alone. That doesn't include video, mobile, or the rest of the world. We believe the estimate would easily top $10 billion on a global basis."

Pay-Per-View networks have cropped up all over the Internet, touting their ability to push brand messages to consumers, but according to MdotLabs' "Impression Fraud in On-line Advertising via Pay-Per-View Networks" report many of these PPV ads are never seen by consumers' eyes. Instead malware and bots are pushing many 'impressions', which cheats the advertisers paying for those same impressions.

"We conservatively estimate the number of invalid impressions that are generated from these PPV networks alone to be on the order of 15 billion per month. Assuming the modest quality level for sites that are part of PPV networks, we estimate the cost to advertisers for this fraudulent traffic to be on the order of $180 million annually," said Mdotlabs Chief Scientist and co-founder, Dr. Paul Barford.

MdotLabs researchers posed as online publishers and signed up for several services to study how the services worked.

Tags: advertising fraud, MdotLabs, online advertising, PPV advertising, PPV fraud

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