“Robots” are buying ads generated by other “robots” visiting sites, and the buying bots are unable to distinguish the shady bots from legitimate human traffic.,,,,oops….
36% Of All Web Traffic Is Fake
by Dylan Love
Just over one-third of Web traffic is fraudulent, the Wall Street Journal reports, and robots are to blame.
The fake traffic comes from botnets that click on shady sites which have been created solely to generate false page view impressions, gathering advertising dollars for site owners in the process. The scheme works because advertisers only pay for their ads to appear on a site, and not specifically for their ads to be seen by real people.
From the WSJ:
The fraudsters erect sites with phony traffic and collect payments from advertisers through the middlemen who aggregate space across many sites and resell the space for most Web publishers. The identities of the fraudsters are murky, and they often operate from far-flung places such as Eastern Europe, security experts say.
Advertisers are aware of the problem but the Internet is too powerful a means of distribution for them to cut back on their spending, even if one-third of it ultimately goes nowhere. As people are spending more time with mobile and Internet-connected devices, digital ad buys are expected to rise in the US by 17% this year to a total of $50 billion.
At the Interactive Advertising Bureau’s annual conference last month, Chairman Vivek Shah said that Internet advertising is facing a “crisis,” while Roxanne Barretto, assistant vice president for U.S. digital marketing at L’Oréal, said ”slowing down [spending] represents a missed opportunity to connect with our core audience.”
Part of the problem is that the legit ad industry itself is dependent on bot-like technology. Today, most ads are bought “programmatically,” or via buying software that automatically places ads on sites that fit the media plan. The ads are bought in bulk and at tremendous speeds. Eighty percent of all ads are expected to be placed programmatically within the next 10 years.
What that means is that “robots” are buying ads generated by other “robots” visiting sites, and the buying bots are unable to distinguish the shady bots from legitimate human traffic.
Tech companies have risen to the challenge of building software designed to such distinctions. Google recently acquired Spider.io, a company that offers a number of services to help ensure that online advertisements are being seen by real people.
High Speed Click Fraud: Over One Third Of All Internet “Traffic” Is Fake
“When you bundle bots, clicks fraud, viewability and the lack of transparency [in automated ad buying], the total digital-media value equation is being questioned and totally challenged,” warns one advertising group executive as the WSJ reports about 36% of all Web traffic is considered fake, the product of computers hijacked by viruses and programmed to visit sites. This means, simply put, that marketers, who are pouring billion of dollars into online advertising, are confronting an uncomfortable reality: rampant fraud… and the fraud is only going to get worse…
Billions of dollars are flowing into online advertising. But marketers also are confronting an uncomfortable reality: rampant fraud.
About 36% of all Web traffic is considered fake, the product of computers hijacked by viruses and programmed to visit sites, according to estimates cited recently by the Interactive Advertising Bureau trade group.
So-called bot traffic cheats advertisers because marketers typically pay for ads whenever they are loaded in response to users visiting Web pages—regardless of whether the users are actual people.
The fraudsters erect sites with phony traffic and collect payments from advertisers through the middlemen who aggregate space across many sites and resell the space for most Web publishers. The identities of the fraudsters are murky, and they often operate from far-flung places such as Eastern Europe, security experts say.
One wonders just how “valuable” all those social media companies really are if the bots and fraud was removed? This isn’t the first time we have discussed this, but it seems even the advertisers are now doubting the new word order of “social” and “mobile” as the panacea for ad spend.
How Microsoft, Amazon, gave birth to a bevy of cloud startups
by Emily Parkhurst
In April 2007, about 200 startup entrepreneurs filed into an old warehouse in Seattle’s Capitol Hill neighborhood for a wine and cheese party hosted by Amazon and Seattle venture capital firm Madrona Venture Group.
The founders of a new company called Smartsheet gave a quick presentation to explain how they were using a new service called Amazon Web Services to grow their business.
“That was the first public event evangelizing AWS, and it was right here in Seattle,” said Matt McIlwain, the managing director of Madrona who arranged the event. It was also the first sign that Seattle was the place where cloud innovation would grow into a multibillion-dollar industry.
Now, seven years later, Seattle is Cloud City.
It’s a fitting metaphor for a region already associated with cloudy weather. This new industry also presents Seattle with a chance to brand itself as the place where the world’s most innovative cloud companies are located.
Most consumers see “the cloud” as a place where they might store documents or photos. But it’s much more than that, especially for businesses. More and more, companies are looking to move their applications off of in-house servers or private data centers and into a public cloud infrastructure. On a public cloud, millions of servers can be available instantly to spin up when the company needs more space, and then spin down and become available to others when that company no longer needs them.
It’s called infrastructure as a service, and it could be compared to the way we consume and buy electricity: You pay for what you use when you use it.
The cloud has major upsides in that it’s cheaper than buying servers yourself, and IT departments don’t have to worry about managing the systems themselves.
The big downside is that when cloud infrastructure goes down, it often takes entire companies with it. That happened on Christmas Eve 2012, when Amazon’s service went down and took Netflix and a number of other services with it.
Business IT departments have dealt with server downtime for decades — “the server is down” is a common enough refrain in most offices — but in the past, the IT departments were the ones responsible for fixing it. Now, as more and more companies shift to the cloud, the responsibility of managing and monitoring those systems has shifted as well. And for Seattle companies, that has presented an enormous opportunity.
Why Seattle?
It’s easy to say that Amazon started it all when the company realized that other companies might be able to use the system it built to handle the massive increase in server space that Amazon.com needed during the holidays and the decrease in demand after presents were unwrapped.
Amazon Web Services was launched in 2006 and grew quickly as startups flocked to the cheap, pay-as-you-go service.
But some have suggested that Seattle’s cloud history goes back further, to the early days of Microsoft, when the idea that an operating system — Windows — could be separated from the hardware it was running on led to the concept of virtualization, making it seem to the user that the software is right there on her machine when it is actually running elsewhere.
“Virtualization enabled the cloud,” McIlwain said.
It was then, McIlwain said, that people began realizing they could take every piece of software and sell it individually as a service. That eventually led to selling infrastructure as a service and the shift that is happening as enterprise-level companies move their enormous applications with thousands of users to the cloud.
In October 2008, Microsoft launched an AWS competitor, Azure, which it initially pegged as an operating system in the cloud. That was a difficult sell at first, as Microsoft’s biggest customers — large companies — weren’t ready to shift all of their applications to the public cloud, a place they perceived as fraught with security issues.
But now, cloud infrastructure has been shown to be quite secure, and the cost savings are proving irresistible. Large companies are moving hundreds of previously in-house applications to public clouds, and there’s a whole cadre of new companies lining up to help them. Many of those companies are based in the Seattle area so they can be close to the infrastructure companies with which they’re partnering.
“We’ve grown our R&D team about 300 percent in the last year and a half,” said Adriaan Van Wyk, co-founder and CEO of Bellevue, Wahington-based K2, a company that started out in South Africa helping its clients customize applications on their local servers. But when the cloud started taking off, K2 moved its headquarters to Bellevue and built its system to work on AWS, Azure and other cloud infrastructure. Recently, K2 has zeroed in on Azure because it sees a huge opportunity for Microsoft’s cloud services to take off. The fact that Microsoft just promoted its head of cloud and enterprise services, Satya Nadella, to CEO is evidence that Microsoft sees Azure as a big market opportunity.
Most of K2’s customers don’t need to know — don’t even want to know — whether it’s Amazon or Azure running in the background. They just want their applications to work. Building a system that could run on anyone’s backbone was just smart business, Van Wyk said.
“There’s an element of risk if you lock yourself too deeply in with any one vendor,” he said.
Having multiple vendors and many different cloud service companies in the Seattle region means that the world’s biggest companies see Seattle as a one-stop cloud shop.
Bellevue-based Apptio, which many believe will go public this year, is a big draw for corporate chief information officers. The company sells software that helps IT departments keep track of all the applications and services they’re using. Apptio recently started a technology business management conference that draws big businesses to the area, including the CIOs of Goldman Sachs, eBay and Cisco.
McIlwain said that recently the chief technology officer of a major beverage company — he wouldn’t say which one — was in Seattle for the Apptio conference. In addition to Apptio, that CTO met with 2nd Watch, a Seattle startup that helps enterprise companies migrate and manage their cloud applications; Tableau, which helps companies take large amounts of data and turn them into interactive visuals; and AWS.
“That’s the intersection, the ecosystem of innovation,” McIlwain said. “Seattle is becoming more and more this central place where cloud is happening.”
