Issues in Advertising Fraud: What Is Fraud?
In 2010 the industry could not agree on what counted as ad fraud. That was not confusion. It was a business model.
Ask ten people in 2010 what ad fraud was and you got ten answers, most of them describing somebody else's company. The lack of a definition was not an accident. If nobody agrees what fraud is, nobody has to refund it.
What was on the table in 2010
Cookie stuffing. Dropping affiliate cookies without a click so you get paid for sales you did nothing to cause. By June 2010 this one had a clear answer: federal prosecutors charged it as wire fraud in the eBay cases against Shawn Hogan and Brian Dunning, both of whom later pleaded guilty.
Adware. Software that rides along with a free download and serves ads, often pop-ups, sometimes without real consent. The FTC's 2006 settlement with Zango, whose software had been installed more than 70 million times and served more than 6.9 billion pop-ups, required clear disclosure before install and cost Zango $3 million.
Negative-option and data-pass schemes. Free trials that never ended and checkout pages that enrolled you in clubs. Congress outlawed the worst of it with ROSCA in December 2010.
Fake antivirus. Scareware sold through ads and poisoned search results, which Google's own 2010 research found growing fast.
Click fraud. Bots and paid clickers inflating pay-per-click bills, the oldest complaint in the business and the one the platforms most wanted to describe as small.
How it aged
The definition finally arrived, and it arrived from a courtroom, not a trade association. Fraud moved from affiliate tricks to industrial bots. The Methbot operation spoofed more than 6,000 publishers between 2014 and 2016 and took more than $7 million. Its operator, Aleksandr Zhukov, was convicted in 2021 and sentenced to 10 years.
The question from 2010 still stands, just with more zeros: who in the chain gets paid when the fraud happens, and why do they keep getting paid after it is found?
This page rebuilds a July 2010 IndustryPace post, cited by Ben Edelman, whose original text is not available. Facts come from DOJ releases, the FTC's Zango settlement, the 2010 ROSCA legislation and the Eastern District of New York's Methbot case. The author ran an ad network in this period and published fraud reports on it.