Steve has a website which sells carpets in London.
Steve’s carpet business has been doing really well and Peter has recently noticed just how well. Peter decides to get into the same business and decides to build a website too.
Peter’s website is soon complete and he has a little stock to get started.. but nobody visits his website. So he decides to take out some online ads.
He is not quite sure what keywords he should target for his ads, so he visits Steve’s website to use his keywords. After all, Steve is doing so well.
A few hours later, Peter now has ads and they start appearing right above Steve’s organic search results, he’s very impressed and soon after starts receiving quite a few online queries for his carpets.
Meanwhile, Steve’s online traffic had started slowing down. He’s beginning to lose valuable online business.
Steve solves the problem
He starts investigating why and soon realises it’s because of Peter’s ads! He decides to take action and starts clicking on Peter’s ads himself, slowly using up all Peter’s advertising budget.
But that doesn’t really work because the ads company sees this as fraudulent due to a single computer doing the same task over and over in the reports.
Steve decides to hire a company that “specialises” in clicking on ads, which he sources via an unlisted website, and pays them a small sum.
This company has a way to click the ads from many IP addresses and fakes the appearance of different people (browsers).
Soon Peter’s ad budget is all gone and he doesn’t have enough money to replenish, because he never actually got any real leads..
Steve can breath easily once more, as he watches the online traffic come flooding back to his online store.
Sadly, while this seems a bit far fetched, it is infact not that far from the truth.
The Q3 earnings for the ad company included the consistent growth from the multiple “specialist” companies over the time and now even if they could create an algorithm to detect and block future equivalents, that would mean a drop in Q4 earnings and this would not make the ad company’s board or shareholders very happy.
Meaning that as long as the report looked legitimate, it would be better to let this continue.
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Edelman (2009) was already talking about this in 2009 at https://hbr.org/2009/11/dark-underbelly-of-online-ads.html
Nakagawa (2018) covered this in some detail with the Ad Fraud talk at https://www3.nhk.or.jp/nhkworld/en/tv/closeup/20180908/4002714/
Perkins (2016) wrote an about this too at https://www.computerworld.com/article/3066656/internet/online-advertising-has-a-dark-side-but-it-can-shed-some-light.html
Del Grano (2017) has a very interesting article on the mobile side of this dark secret at https://medium.com/swlh/fraud-traffic-the-dark-side-of-mobile-digital-advertising-ead808e054d0
It is clear that while there are many businesses surviving off their online advertising budgets bringing in new customers each month, there are an equal amount of click fraud businesses making money off the flip side of online competition and the inevitable push to rid markets from competition.