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Ad Fraud Insights

Ad Fraud

Why Ad Fraud in the Cloud Is a Serious Problem

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    Written by Richard Kahn
    on April 12, 2018

    Advertisers could lose $16.4 billion globally to ad fraud this year. While you may think your data is tucked away safely in the cloud, think again.

     

    It’s no secret bad bots love the cloud. According to Forrester, the worldwide cloud computing market is expected to grow to $191 billion by 2020. Not surprisingly, fraudsters are salivating at the opportunity to cash in.

     

    Here’s what you need to know about ad fraud in the cloud, why it’s a serious issue, and what advertisers need to do to protect themselves.

     

    How Ad Fraud in the Cloud Works

    Before the cloud, fraudsters would hijack email servers. They’d drop a rootkit to take over compromised proxy servers. But now the cloud makes it easier to commit fraud and it scales a lot faster. Cloud computing is in an expansive growth stage and fraudsters are loving it.

     

    Fraudsters can pick up U.S. IP addresses and bounce signals from their foreign country. Not only does the signal look like it’s coming from America, it also appears human. Why? Technically it’s a form of human fraud. Humans overseas are actually doing the clicks and committing the fraud. And the likelihood of getting caught is slim.  

     

    The cloud helps fraudsters hide their identity. Think of it like the Super Mario Bros. character Lakitu, an evil turtle who uses a cloud to obscure his identity.

     Super Mario Bros Villains 

    Hidden by the cloud, fraudsters find it easy to set up cheap servers to deliver bot traffic and disseminate it over the web.  

     

    Why Cloud Breaches Are Bad

    Lots of high profile brands who use the cloud have fallen victim to breaches including Adobe Creative Cloud, Slack, and LastPass, just to name a few.

     

    Amazon’s cloud service AWS has been a popular target of web traffic fraud. According to Distil Networks’ 2017 Bad Bot Report, 16.37% of bad bot traffic comes from Amazon AWS. Ouch.

    Distil Network bad bot report 2017 

    Source: Distil Networks’ 2017 Bad Bot Report

     

    For brands who are breached, the risks can be severe: loss or theft of intellectual property, compliance violations, malware infections, contractual beaches, and revenue losses.

     

    How Advertisers Can Protect Themselves

    It sounds cliche, but it’s true: Knowledge is power. Advertisers can protect themselves by knowing: 

    • What’s a Data Center. Know how to identify a data center.
    • The Characteristics of a Heuristic User. Be able to recognize patterns or characteristics that make up a human user versus a fraudulent user.
    • Which Websites Are Compromised. Stay aware of websites compromised by fraud, so  you can avoid their traffic.

    Also consider subscribing to a service. A service like Anura offers protection against ad fraud. It’s a cheaper and more efficient solution for advertisers than building a system to protect themselves. And Anura has client feedback and time invested in collecting data to back up accuracy.

     

    There’s a common denominator with fraud: Someone is getting paid. As long as there’s a way to make money, fraudsters will continue to rip off advertisers. The cloud is just one more example of crooks cashing in. By knowing what to look for, you can help stave the bleeding, until of course, they move onto the next scheme. 

     

    This article was originally posted in June 2017 and has been republished with new information.

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