Friday, July 22, 2016

Home-Tracking is Killing Advertising


"Today we live in a Blade Runner world, with ad robots posing as people, and Deckard-like figures trying to expose them by digging ever deeper into our browsers, implementing Voight-Kampff machines in Javascript to decide who is human. We're the ones caught in the middle.

The ad networks' name for this robotic deception is 'ad fraud' or 'click fraud'. (Advertisers like to use moralizing language when their money starts to flow in the wrong direction. Tricking people into watching ads is good; being tricked into showing ads to automated traffic is evil.)

Ad fraud works because the market for ads is so highly automated. Like algorithmic trading, decisions happen in fractions of a second, and matchmaking between publishers and advertisers is outside human control. It's a confusing world of demand side platforms, supply-side platforms, retargeting, pre-targeting, behavioral modeling, real-time bidding, ad exchanges, ad agency trading desks and a thousand other bits of jargon.

Because the payment systems are also automated, it's easy to cash out of the game. And that's how the robots thrive.

It boils down to this: fake websites serving real ads to fake traffic for real money.

And it's costing advertisers a fortune.

Just how much money robot traffic absorbs is hard to track. The robots actually notice when they're being monitored and scale down their activity accordingly.

Depending on estimates, ad fraud consumes from 10-50% of your ad budget. In some documented cases, over 90% of the ad traffic being monitored was non-human.

So those profits to advertisers from mass surveillance—the fifteen to thirty percent boost in sales I mentioned—are an illusion. The gains are lost, like tears in the rain, to automated ad fraud.

Advertisers end up right back where they started,still not knowing which half of their advertising budget is being wasted. Except in the process they've destroyed our privacy.


The winners in this game are the ones running the casino: big advertising networks, surveillance companies, and the whole brand-new industry known as "adtech".

The losers are small publishers and small advertisers. Universal click fraud drives down the value of all advertising, making it harder for niche publishers to make ends meet. And it ensures that any advertiser who doesn't invest heavily in countermeasures and tracking will get eaten alive.

But the biggest losers are you and me.

Advertising-related surveillance has destroyed our privacy and made the web a much more dangerous place for everyone. The practice of serving unvetted third-party content chosen at the last minute, with no human oversight, creates ideal conditions for malware to spread. The need for robots that can emulate human web users drives a market for hacked home computers.

It's no accident how much the ad racket resembles high-frequency trading. A small number of sophisticated players are making a killing at the expense of everybody else. The biggest profits go to the most ruthless, encouraging a race to the bottom.

The ad companies' solution to click fraud is to increase tracking. And they're trying to convince browser vendors to play along. If they could get away with it, they would demand that you have webcam turned on, to make sure you are human. And to track your eye movements, and your facial expression, and round and round we go.

I don't believe there's a technology bubble, but there is absolutely an advertising bubble. When it bursts, companies are going to be more desperate and will unload all the personal data they have on us to absolutely any willing buyer. And then we'll see if all these dire warnings about the dangers of surveillance were right."

-Maciej Cegłowski, What Happens Next Will Amaze You, Idle Words/Lecture

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