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Killing 3ve: How The FBI And Tech Industry Took Down A Massive Ad Fraud Scheme

61 points by tysone 8y ago

ryan-c 8y ago
The actual indictment is here: https://www.justice.gov/usao-edny/press-release/file/1114576/download https://www.justice.gov/usao-edny/press-release/file/1114576...
Ibethewalrus 8y ago
Wow, at least 2x larger than Methbot. Great article.
alasdair_ 8y ago
So now that this is out in the open, Google will be issuing refunds to all advertisers who bought fake "advertising" from them, right?
- kenhwang 8y ago
  From the article: Google, for example, let 3ve’s counterfeit websites earn revenue through its ad systems and later refunded its partners for ads that ran. “We actually lose money in this process because we do have to pay out,” Spencer said. (He declined to say how much the company paid out in refunds to partners or to the fraudsters directly.) Partners, in this context, would refer to the advertisers. We also work with WhiteOps, standard operating procedure is to refund/rerun the traffic WhiteOps flags as fraudulent.
- mpeg 8y ago
  Fraud is priced in on the industry. Advertisers assume a percentage of their money is going to be wasted on bots, networks (like Google) assume they will misidentify a percentage of impressions and have to reconciliate the numbers, but also that they'll miss some. It's very easy to demonise Google and think they stand to benefit from this all, but in reality they are hurt by it as much as anyone else, and if there was guaranteed zero fraud in their network they could raise prices and increase profit.
  - ehsankia 8y ago
    The fact that they put so much money and effort into unraveling this extremely complex fraud says all that you need to know.
    - nindalf 8y ago
      Apparently not for some people, like the current top comment.
      - ehsankia 8y ago
        Right, my point was that no matter how hard you try, no matter what you do or what you say, there will always be people who assume malice from it all.
  - wu-ikkyu 8y ago
    >It's very easy to demonise Google and think they stand to benefit from this all, but in reality they are hurt by it as much as anyone else False if bot traffic > estimated bot traffic For others like FB and Twitter, it's a fact their active user counts are inflated by bots and that they are disincentivized to accurately account for it.
    - mpeg 8y ago
      This article and research is talking about third party advertising, where an ad network is used to serve ads on third party sites (greatly simplified, as in reality there could be lots of other players in the chain) What you're talking about is a completely different scenario, where the publisher is also the ad network (FB, Twitter) so inflated user activity could be beneficial for them. That's also arguable as they provide excellent metrics and different pricing models (CPM, CPC, CPA) so if their numbers were as bad as you think more advertisers would just drop FAN. In the case of 3ve, methbot and the like, the process for the fraudsters is different and has nothing to do with bots in social networks: 1. In online advertising, it's very difficult to know who is authorised to serve ads for a given domain. Some domains have hundreds of ad suppliers and they can change all the time. This is alleviated by ads.txt, an IAB initiative to list all your adtech partners in a machine-readable file on your web root. 2. Since it's hard to know what inventory a player in the middle of the chain really has access to. So you can make a deal with an ad player to serve ads on the new york times, but actually be delivering shit inventory. This happens a lot at a smaller scale with dodgy ad vendors that simply deliver lower quality inventory; and added to this, until recently there was no way of cryptographically signing bid requests on OpenRTB protocol (v3 adds this feature) 3. If you have access to lots of consumer IP addresses (3ve uses a large botnet) you can essentially create a hosts entry for publisher.com pointing to localhost, serve a site with fake content loaded with real ads, open a real browser to it and collect on the money from the partnerships and accounts you opened. The advertisers think they're buying real inventory and these users pass every check (browser, network...) PS. I do understand the apprehension though, I spent 10 years in adtech and at times the ecosystem is a total clusterfuck, but it is slowly getting better.
- deleted 8y ago
  [deleted]
aaaaaaaaaab 8y ago
I have no sympathy for the ad industry whatsoever. At this point I’m rooting for anyone making their business model less viable.
- FiveSquared 8y ago
  But there is only one benefit, free website. Those are a godsend to the poor.
- throwaway7312 8y ago
  "I have no sympathy for people who want to make a living by making things who then rent space in existing channels to tell users said things are for sale. At this point I'm rooting for anyone making bootstrapping and entrepreneurship less viable."
  - aaaaaaaaaab 8y ago
    I don’t care. You can thank the adtech industry for making every other business model inviable, except for exploiting your users, disregarding their privacy and selling their eyeballs to be flooded with manipulative crap.
  - meowface 8y ago
    You're strawmanning. They were saying they have no sympathy for the ad and ad tech industry - not that they have no sympathy for people who want to advertise their businesses.
deleted 8y ago
[deleted]

61 points by tysone 8y ago

The actual indictment is here: https://www.justice.gov/usao-edny/press-release/file/1114576/download https://www.justice.gov/usao-edny/press-release/file/1114576...

Ibethewalrus 8y ago

Wow, at least 2x larger than Methbot. Great article.

alasdair_ 8y ago

So now that this is out in the open, Google will be issuing refunds to all advertisers who bought fake "advertising" from them, right?

kenhwang 8y ago
From the article: Google, for example, let 3ve’s counterfeit websites earn revenue through its ad systems and later refunded its partners for ads that ran. “We actually lose money in this process because we do have to pay out,” Spencer said. (He declined to say how much the company paid out in refunds to partners or to the fraudsters directly.) Partners, in this context, would refer to the advertisers. We also work with WhiteOps, standard operating procedure is to refund/rerun the traffic WhiteOps flags as fraudulent.
mpeg 8y ago
Fraud is priced in on the industry. Advertisers assume a percentage of their money is going to be wasted on bots, networks (like Google) assume they will misidentify a percentage of impressions and have to reconciliate the numbers, but also that they'll miss some. It's very easy to demonise Google and think they stand to benefit from this all, but in reality they are hurt by it as much as anyone else, and if there was guaranteed zero fraud in their network they could raise prices and increase profit.
- ehsankia 8y ago
  The fact that they put so much money and effort into unraveling this extremely complex fraud says all that you need to know.
  - nindalf 8y ago
    Apparently not for some people, like the current top comment.
    - ehsankia 8y ago
      Right, my point was that no matter how hard you try, no matter what you do or what you say, there will always be people who assume malice from it all.
- wu-ikkyu 8y ago
  >It's very easy to demonise Google and think they stand to benefit from this all, but in reality they are hurt by it as much as anyone else False if bot traffic > estimated bot traffic For others like FB and Twitter, it's a fact their active user counts are inflated by bots and that they are disincentivized to accurately account for it.
  - mpeg 8y ago
    This article and research is talking about third party advertising, where an ad network is used to serve ads on third party sites (greatly simplified, as in reality there could be lots of other players in the chain) What you're talking about is a completely different scenario, where the publisher is also the ad network (FB, Twitter) so inflated user activity could be beneficial for them. That's also arguable as they provide excellent metrics and different pricing models (CPM, CPC, CPA) so if their numbers were as bad as you think more advertisers would just drop FAN. In the case of 3ve, methbot and the like, the process for the fraudsters is different and has nothing to do with bots in social networks: 1. In online advertising, it's very difficult to know who is authorised to serve ads for a given domain. Some domains have hundreds of ad suppliers and they can change all the time. This is alleviated by ads.txt, an IAB initiative to list all your adtech partners in a machine-readable file on your web root. 2. Since it's hard to know what inventory a player in the middle of the chain really has access to. So you can make a deal with an ad player to serve ads on the new york times, but actually be delivering shit inventory. This happens a lot at a smaller scale with dodgy ad vendors that simply deliver lower quality inventory; and added to this, until recently there was no way of cryptographically signing bid requests on OpenRTB protocol (v3 adds this feature) 3. If you have access to lots of consumer IP addresses (3ve uses a large botnet) you can essentially create a hosts entry for publisher.com pointing to localhost, serve a site with fake content loaded with real ads, open a real browser to it and collect on the money from the partnerships and accounts you opened. The advertisers think they're buying real inventory and these users pass every check (browser, network...) PS. I do understand the apprehension though, I spent 10 years in adtech and at times the ecosystem is a total clusterfuck, but it is slowly getting better.
deleted 8y ago
[deleted]

aaaaaaaaaab 8y ago

I have no sympathy for the ad industry whatsoever. At this point I’m rooting for anyone making their business model less viable.

FiveSquared 8y ago
But there is only one benefit, free website. Those are a godsend to the poor.
throwaway7312 8y ago
"I have no sympathy for people who want to make a living by making things who then rent space in existing channels to tell users said things are for sale. At this point I'm rooting for anyone making bootstrapping and entrepreneurship less viable."
- aaaaaaaaaab 8y ago
  I don’t care. You can thank the adtech industry for making every other business model inviable, except for exploiting your users, disregarding their privacy and selling their eyeballs to be flooded with manipulative crap.
- meowface 8y ago
  You're strawmanning. They were saying they have no sympathy for the ad and ad tech industry - not that they have no sympathy for people who want to advertise their businesses.

deleted 8y ago

[deleted]