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TheStreet Open House

#Digitalskeptic: Malware and Bots Are Murdering Web Advertising

Jacoby says that the chief marketing officers for these brand advertisers began to dig into the Web data spinning from emerging brand Web media purchases -- and noticed a significant problem with shrinkage.

"They wanted to know 'Where was all my traffic,'" Jacoby said.

This interest sparked a round of industry disclosures about the deep and stubborn problem of sophisticated advertising malware. In May 2012, it fell to Philippe Beaudette, director for community advocacy at San Francisco's Wikimedia Foundation -- which operates Wikipedia -- to 'fess up publicly that brand advertising fraud was a serious issue for the online encyclopedia.

"If you're seeing advertisements for a for-profit industry," he wrote, "then your Web browser has likely been infected with malware."

The feeble state of Web advertising security is also not limited to the traditional Web. Lookout, the San Francisco online security firm, reported in August that not only are sophisticated fraudulent mobile ads routinely delivered to Android mobile devices; they are delivered by a series of "easy-bake" automated Web ad fraud kits sold to independent fraudsters by a large, centralized malware franchiser branded as Malware Headquarters.

"Like any other large business, Malware Headquarters provides customer support, posts regular newsletters, reports downtime or new features," said the Lookout report. "And even run regular contests to keep their affiliates engaged and motivated."

The $9.3 billion problem
What really sends Jacoby over the edge is the pounds of flesh that advertising zombies will eat out of the Web marketing industry: He estimates that a cool $9.3 billion dollars will be stolen this year. And that almost 46% of all ad impressions will be from bots.

"It would be incomprehensible to have these kinds of metrics in any other industry," Jacoby said. But such is the sad state modern Web advertising.

To be fair, Jacoby makes the case that his firm and others are creating the tools advertisers can use to ward off the Web's advertising undead. And certainly there are impressive features in the products sold by Solve Media. But at least to these tired eyes, something is terribly wrong with a Web marketing business that needs a decade and a half to figure that its products are deeply flawed -- and probably no more secure or efficient than its analog predecessors.

Pretending otherwise not only is the biggest mistake Web marketers can make -- it only brings the coming Zombie web ad apocalypse closer to hand.

Be afraid, advertisers. Be very afraid.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
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