According to Adform, the fraudsters behind the Hyphbot scheme created more than 34,000 different domain names and more than a million different URLs, many designed to attempt to fool advertisers into thinking they were buying ad inventory from big-name publishers such as the Economist, the Financial Times, The Wall Street Journal and CNN. It is a tactic known in the industry as "domain spoofing."
Google issued big refunds to advertisers whose ads ran on websites with fake traffic as the company works to create a solution to curb the industry's problem, sources familiar with the matter told the Wall Street Journal. The search engine company has contacted hundreds of marketers and ad agency partners over the past few week about the problem with fraudulent traffic, also referred to as "ad fraud." The ads, which were bought using Google's automated technology DoubleClick Bid Manager, reportedly ran on publisher sites with bogus traffic, like websites where clicks are faked by bots instead of humans. While Google has refunded the advertisers, the refunds are only a fraction of the total ad spending that ran through sites with fake traffic -- and ad buyers are not happy. The company defended its response because it says doesn't control the rest of the money, according to the Journal.
Alphabet Inc.'s GOOGL -0.38% Google is issuing refunds to advertisers for ads bought through its platform that ran on sites with fake traffic, people familiar with the situation said, as the company develops a tool to give buyers more transparency about their purchases. In the past few weeks, Google has informed hundreds of marketers and ad agency partners about the issue with invalid traffic, known in the industry as "ad fraud." The ads were bought using the company's DoubleClick Bid Manager. Google's refunds amount to only a fraction of the total ad spending served to invalid traffic, which has left some advertising executives unsatisfied, the people familiar with the situation said. Google has offered to repay its "platform fee," which ad buyers said typically ranges from about 7% to 10% of the total ad buy.
The past few weeks have been dominated by stories about consolidation. Marketers are paying close attention because much of the recent M&A chatter involves all the major companies they buy ads from. The environment is dogged by upheaval and uncertainty, and the administration is only further muddying the waters. The New York Times looks at the "tangled message" Washington is sending out about AT&T's market power. On the one hand, the Justice Department sued to block AT&T's proposed $85 billion takeover of Time Warner, arguing it would give the company too much power and lead to higher prices for programming. On the other hand, the FCC announced plans to roll back "net neutrality" rules, essentially paving the way for internet providers like AT&T to form alliances with content companies, charge higher fees to serve up webpages at faster speeds, and favor their own content.