The Alleged $7.5 Billion Fraud in Online Advertising (Moz)

The Alleged $7.5 Billion Fraud in Online Advertising (Moz)

My latest essay has been published today on Moz:

So wrote Ad Contrarian Bob Hoffman, the retired CEO and chairman of Hoffman/Lewis Advertising, in June 2013 on a $7.5 billion scandal that has been developing under the digital radar in the advertising world for the past few years. The three main allegations, according to those who are making them:

  1. Half or more of the paid online display advertisements that ad networks, media buyers, and ad agencies have knowingly been selling to clients over the years have never appeared in front of live human beings.
  2. Agencies have been receiving kickbacks and indirect payments from ad networks under the guise of “volume discounts” for serving as the middlemen between the networks and the clients who were knowingly sold the fraudulent ad impressions.
  3. Ad networks knowingly sell bot traffic to publishers and publishers knowingly buy the bot traffic because the resulting ad impressions earn both of them money—at the expense of the clients who are paying for the impressions.

These charges have not seen much discussion within the online marketing community. But the allegations have the potential to affect everyone involved in online advertising—ad agencies, in-house departments, agency and in-house digital marketers, online publishers, media buyers, and ad networks. An entire industry—billions of dollars and thousands of jobs—is at stake.

And it all starts with a single impression.

Read the rest at Moz!

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