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Internet Fake Out: The Clickbait and Ad Fraud Explosion

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Do you ever log on the Internet and think: Wow, there's a lot of crap in here? You're not alone.

Millions of salesmen are competing for your time — and there are many tricks to the clicks. In fact, the Great Fake Internet is growing as ad fraud and clickbait metastasize.

Don't Waste My Time

First there's ad fraud. Studies show ad fraud is a growing problem. AdWeek recently tabulated the cost at $6 billion. That's criminal — literally. Then there are the lesser but similarly vexing problems, such as the explosion of social click-bait media designed to lure you into the latest story on the "Top Ten Most Beautiful Olympians who Have Married Other Beautiful Olympians."

Clickbait and ad fraud — it's become a way of life, wasting your time on the Internet. It's no wonder the bottom has dropped out of click-through rates and CPM pricing on ads. In media, competition for your time has become more intense than ever — because it's a house of illusions.

"There is a downward spiral, there is a ton of ad fraud and it gets worse and worse," said Joe Marchese, founder and CEO of true[X] Media, an video advertising firm in New York City. He says much of the ad volume on the Internet has become fraudulent because the industry has allowed to become that way. He recently penned a piece in MediaPost on why big TV ad dollars refuse to go online for this reason.

Marchese says the entire advertising industry is complicit in the problem because it buys into the volume concept and regularly uses ad networks known to game numbers with fake impressions or bots. Everybody has bought into the wrong business model, he said — one predicated on click volume or click-through rates, which isn't an accurate measures of audience engagement. He said:

The only way that they can generate the volume is through fraud. The pricing and buying are based on reach frequency modeling from an old system, it can be faked in the new system, and we're in a downward spiral."

Open for Debate

Marchese recently engaged in on online debate on this topic on Twitter, where there was wide agreement. In fact, Marc Andreessen, the entrepreneur and Venture Capitalist for Andreessen Horowitz, called it a "race to the bottom."

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True enough. When's the last time you clicked on an ad? It's as if the Internet has become an unregulated stock-market bucket-shop. Everybody needs big numbers. Everybody's selling something to somebody and promising eyeballs in return. Are the eyeballs real? Just like a stock certificate, sometimes there's something real behind it, sometimes not. But there's no SEC on the Internet. And whether you are a media consumer or ad buyer, you don't always get what you invested in.

Here are some more stats and figures on "Internet trash" trends I see unfolding:

  • Ad Networks: Ad networks are the chief offenders of the "downward spiral" of Internet advertising, commoditizing the product and placing ads basically anywhere to get a click. Worse yet, they could be generating numbers via computers and robots and nobody seems to really known what's real and what's not. There are stories of multi-millionaires laughing their way to the bank, as described in the AdWeek report.
  • Ad evaluation firm Integral's studies show that 40 percent of in-banner video impressions on ad exchanges have "suspicious" characteristics of being fraudulent. Measures of potential fraud in other ad exchanges have improved recently, dropping from 30 percent in a 2012 study to 20 percent in 2013, but that still seems quite high. 
  • "As our report indicates, ad buyers and sellers cannot effectively improve issues like low viewability and fraud, especially across exchanges, unless they leverage key actionable information about media quality before they bid,” said Scott Knoll, CEO of Integral.
  • E-commerce and payment fraud. Be careful where you buy stuff. Accounting and auditing firm Deloitte has issued a brief saying the e-commerce fraud, phishing and other online scams are on the rise.
  • Astroturfing: Fake news is everywhere. You know that weird friend of yours in Santa Cruz, Calif. that's always on social media passing on those over-the-top disaster "news" stories like "Fukushima Likely to Nuke California Within 24 hours" or "Obama's Life as a Kenyan Drug Dealer." It's everywhere, right?

All of this lead me to the big question: Has the Internet become too fake?

 

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