The phone call that changed my digital marketing life
I first learned about digital ad fraud 13 years ago, but most of AdLand is still in denial.
In the spring of 2012, I got an urgent phone call from my friend and client Lori Norian.
She had just heard a speaker at an ANA (Association of National Advertisers) conference, and dashed out of the ballroom to call me. “You won’t believe what I just heard about ad fraud. We need to get this guy into Protagonist next week and hear more.” (Protagonist was my New York ad agency, and Lori was our VP of marketing at Zicam Cold Remedy.)
All news to me—and truly shocking
The speaker was Augustine Fou, today’s leading expert on digital advertising fraud, and the story was hard to believe at first.
Yet ten years later, it was 10 times worse.
Dr. Fou’s 2022 digital ad fraud study showed a fast-accelerating debacle: 75% of digital ads on the open web were never seen by a human being (that’s the “unknown” in red, below).
“Wait—that means $141 billion was wasted in 2022?”
Yup. $141 billion of digital ads were clicked on by “bots” created to act like human shoppers.
Last I checked, “bots” don’t buy anything, so that means $141 billion was siphoned off by criminal enterprises and the entire “digital advertising industrial complex.”
“OK, that was 13 years ago—what about today?”
The 2025 U.S. digital ad spend should reach $300 billion. While Dr. Fou’s models show that the industry has brought fraud down from 75% to 50%, you can do the math: the 2025 bonfire of ad money will be a cool $150 billion.
That’s a lot of toasted marshmallows.
Let’s rewind to our 2012 wake-up call.
Augustine’s warning was too late for our 2012 Zicam campaign. The brand had already committed $2 million to a major digital media shop in “programmatic” digital ads.
“Programmatic” platforms were the hot new thing, enabling automated bidding and ad buying, often through multiple layers of middlemen that make ad quality and verification opaque. That also makes fraud and hidden fees hard to track down.
We couldn’t back out of it the buy, so we monitored the campaign as best we could.
A year later, after a contentious run with that new media shop, they reported the campaign’s results and couldn’t hide the fact that more than half of the ads likely never reached a human being.
Lori demanded a 50% “make-good” (refund), they waved her off, she fired them, and we hired a “better” media shop for a smaller buy the next year.
A little better…but not much
This time around we also created in-house media team to handle half of Lori’s ad money ourselves. Protagonist only placed ads inside the “walled gardens” of Facebook and Google, along with direct buys with reputable publishers, where we could buy directly, reach actual humans, and get a more direct read on the effectiveness of our ads.
The new digital media agency did perform a bit better than the previous shop, but in apples-to-apples results comparisons, we kicked their asses.
Lori fired them, and Protagonist never spent another dollar of client money on ads we could not buy directly, track and measure ourselves.
“Wait—what’s a ‘walled garden’?”
Any digital destination that’s gated—that is, any media entity you have to log into, and therefore confirm you are a person—is a “walled garden” where advertisers have controlled access to a well-defined human audience. This is in contrast to “the open web”…
…a chaotic, spammy wasteland that fraudsters can easily sell fake ads through.
“So how do the fraudsters actually pull this off?”
Here’s a metaphor I use to explain ad fraud: Imagine you live in a house with a mailbox at the curb, and one day you go out and notice that your mail carrier has put your favorite magazine (assuming you still get the print version) on the ground next to the mailbox.
It’s outside the mailbox because it’s taller than Mt. Everest.
That’s because it’s actually a stack of millions of cloned, lookalike digital copies of the issue that fraudsters created and distributed globally to sell their fake ads through.
How is that distribution possible?
Flooding the market with fake ad inventory WORKS because it meets the ever-growing demand for digital inventory by advertisers big and small around the world.
The “programmatic” buying and selling platforms serve and feed the demand, making it too easy for marketers to “set it and forget it.” And forget it—and trust it—most do.
From lone wolves in parents’ basements to state-financed larceny
It all started with young digital rogues in Eastern Europe working from home. Word quickly spread on how easy it was to pull in $millions with one laptop and no overhead.
Today it’s a massive global industry, often state sponsored and financed by “an axis of digital evil” with the profit-fuel to also to warp social media and meddle in elections.
Duped media, duped ads, duped clients, but real money
As you read this, millions of fake, cloned sites are selling billions of fake ads every second that someone is paying good money for. And the fraudsters “prove” the ads were viewed by “humans” (“bots” again) thanks to fancy ad verification tricks.
“So why do the bad guys keep winning?”
While the good guys work hard to counter the crooks, the bad guys keep winning the digital arms race because they’re printing mountains of money, and have the cash to keep innovating new ways to cheat.
The ad and media industries—whether aware or unaware of the extent of the problem—profit from all this. Personally, I believe the biggest reason for the ad industry’s slow response has been the embarrassment that this has been happening for decades under their noses—or worse.
“So where are the cops on this beat?”
Good question. Twenty years have passed, and the $billions keep growing.
The good news is the ANA has started paying more attention. They published a 100-page report at the end of 2023 that estimated ad fraud rate at about 20%. I give them credit for putting more focus on the problem, but their 20% estimate, as you’ve seen above, was a major undercount of the problem.
I also give the ANA credit for having Augustine speak way back at their 2012 conference. I just wish they’d invited him back to every conference to keep sounding the alarm.
Ad fraud is still avoided in polite marketing and advertising conversation.
Here’s a typical recent example in the March 17, 2025, issue of AdAge:
The closest the article gets to ad fraud is talking about “made for advertising websites,” a barely-perceptible nod toward the problem.
It outlines how marketers are trying to address “flaws” in programmatic advertising and get “closer” to the publishers, reducing the power of the programmatic middle-men. (Translation: buying ads directly with the media who actually run real ads.)
“This shift…has accelerated recently as flaws in the old programmatic system—such as low-quality ad placements, hidden fees, complex supply chains and faulty targeting—have become more pronounced.”
Features—not bugs—of a still-growing problem
The “hidden fees” issue alone should be a major scandal: Those hidden layers in the “ad stack” may double the cost of every ad sold—fake or legit—right off the top.
The AdAge article provided this blazing insight:
“One way to improve the ad inventory was for agencies to have closer ties to the supply [publisher] side to know exactly what they’re buying” [italics are mine.]
Wow. So after 20 years of ad fraud, the advice to agencies is that maybe they should better understand what they’re actually buying, and then selling to their clients?
Ya think?!
This has to stop, folks
It’s high time the ad and media industry gets serious about this.
Meanwhile, I’m grateful to Augustine for taking this on, and to Lori for listening way back when. The Zicam business benefited, my practice is the better for it, and Augustine’s FouAnalytics Practitioners is now helping clients around the world stay out of the digital swamplands.
By the way, you’ll be shocked—SHOCKED—to hear that Augustine has ticked off a LOT of people in Adland. I’m proud to call him a friend and ally.
I hope my ad fraud story has been helpful to you—and that you’ll reach out if you’d like to learn more. Meanwhile…
