Domain Spoofing: An Unresolved Issue

There is no level of fraud that is acceptable. Despite the recent reports that state the increase of programmatic advertising, domain spoofing is one of the threats of ad fraud rapidly damaging the Industry. It is said to be the largest threat to the Digital Ad economy. The increasing fraudulent scenario in programmatic advertising space is not hidden from the publishers and creates a hassle in the ecosystem of buying and selling ads. 

What is Domain Spoofing?

Publisher’s inventory purchases are going down the drain because of the increasing number of cybercriminals that are practicing illicit means of diverting clicks to fake URLs. Domain spoofing floods programmatic buys with junk inventory, and throws off KPIs violating the security and steals the marketer’s budget. Since a distributor makes the stock space, he has the ability to characterize the URL, content category and location placed through the supply-side platforms (SSPs).

How it is a threat and what is the damage?

Experts say that the industry is wasting marketing budget on an organized crime. Few experts peg the number of fraud in the scenario of domain spoofing to cost an annual loss of 6 billion to 16 billion dollars. The Financial Times did an investigation on the scale of domain spoofing occurring on their site. They analysed shocking results where the display ads were disguising consumers to FT.com. 10 isolate promotion trades and 15 trades on video advertisements were observed to be phony. 300 fraud accounts were offering misleading inventory selling on Financial Time’s website. They found 1 to 1.3 million dollars of fraud on advertisement each month.  A similar scenario was faced by the advertisers of Mathbot. They experienced misrepresentation of 3 million to 5 million dollars for over a month. Experts and top-tier fraud detection companies are considering domain spoofing as a serious issue to the programmatic industry and face extreme difficulties in stopping scammers who use domain spoofing tactics.

Upside for the publishers

Studies and research have resulted in the initiation of Ads.txt which is created by Trustworthy Accountability Group (TAG) to help the publishers against the biggest threat. Ads.txt creates a coordination between publishers and resellers of their inventory. This helps the marketers to know who is authorized to sell any given ad space. More than 95,000 sites have implemented ads.txt, but only 22% of the top 1000 websites are in sync with anti-fraud measures. TAG certified 17 companies in December 2016, which was its first batch. The number has increased to 49, with 120 companies still in the process of approval.

In September 2017, Google announced that they won’t work with any publishers not using Ads.txt. Even after this announcement, less than half of the publishers have opted for anti-ad fraud measures. The Industry needs to be serious about stopping this type of threat or inventory misrepresentation and the wisest option is to adopt ads.txt.

In the long run, we need to consider new conventions to prevent fraud, rather than tracking it in the act. The publishers need to identify these cybercriminals by tracking the exchanges to see where they are and are not selling and check the credibility. According to an analysis by OpenX, ads.txt was adopted by 7% publishers and now the number has gone high. More than 1000 publishers have adopted ads.txt since August 2017. Programmatic experts are focussing on reducing the effect of domain spoofing and have analysed the adoption of ads.txt to be a slow process. The problem of domain spoofing continues to be an uncertain and unresolved issue in the business and should be mended through industry coordinated effort and positive activities.