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Online advertisers being scammed by advertising fraud

Now here's a story that strikes at the heart of the modern Internet: a report just released suggests that online advertising firms lack the tekkie expertise to detect when they're being defrauded.

According to Professor Benjamin Edelman, a Harvard Assistant Professor and security specialist, online marketers simply lack the technical sophistication to tell when they're being robbed.

Edelman says that, whilst the online ad industry has moved to CPA (Cost-Per-Action) advertising instead of CPC (Cost-Per-Click), CPA needs careful packet monitoring and HTML code analysis to check they're not being ripped off.

In his report, Edelman said that CPA enforcement requires fact-intensive technical investigation - examining HTML code and packet logs to uncover infractions.

"The required skills have little overlap with the relationship-building and communication that otherwise drive affiliate marketing," he says in the research.

The problem with CPA, he asserts, is that advertisers typically pay affiliates a commission when a customer browses an affiliate's Web site, clicks on a Web link with an embedded affiliate code, and then purchases a product that corresponds to that code.

The system is reasonably secure against fraud, says Edelman, but using a process called cookie stuffing allows fraudsters to register as an affiliate and then "tweak" merchants' affiliate-tracking systems to get credit for purchases they had nothing to do with.

And the bad news, says Edelman, is that there is no ready solution to the problem of cookie stuffing...