Ad fraud has become so rampant in the recent years but the good news is that many people have opened their eyes to these kind of fraud and activist are not getting tired of calling out these fraudsters either. One stern short activist, Sahm Adrangi , early this year had an amazing presentation on the same at the Kase Learning during a conference on short selling.
So how does ad fraud occur? Sam explains that hackers manipulate computers to click on your ad displays to create a substantial amount of clicks, impressions, and conversations instead of having actual humans who are the targeted customers click on your ads. This means that there is no actual ROI for a company investing in online ads. According to Sahm Adrangi,the more the ad frauds occur the less the advertising buyers are going to spend on online ads thus missing out on revenue from legitimate publishers.
So what is making it slow for all the interested parties to act? Sahm believes that all these parties that are supposed to be fighting against ad fraud do benefit and that is why they are slow. The ad agencies, ad exchanges, and the advertising companies all do benefit in a way, he insists.
This ad fraud takes so many forms, Sam adds, there is click fraud that occurs in paper click, there is click online ads and then there are fake websites with no content but have lots of traffic. All they do is use the same traffic for different ads. There is also ad tagging and stuffing where an ad is hidden behind a certain ad which the clients don’t see but see the video only but once they click, it reflects as an ad click.
In all these ad frauds, the ultimate loser is the ad buyer, concludes Sahm. Therefore it is high time that they work together with the activists to put all these frauds to an end. Otherwise, they will never really realize the economic value of online advertising.
About Sahm Adrangi
Sahm Adrangi is the Founder and CIO of Kerrisdale Capital Management which was launched in 2009. Sahm’s highest achievement has been exposing the fraudulent Chinese companies and has since been keen on short seller activism