December 7, 2018
What online marketers and ad fraud criminals do and don’t have in common

The recent news about the Department of Justice’s takedown of the code-named 3ve and Methbot ad fraud schemes, including the arrest of three individuals and the indictment of five more, is cause for celebration.

A coordinated effort over several years from the FBI, White Ops, Google and many others shut down a hefty chunk of the $19 billion that Juniper Research estimates will be stolen this year by digital ad fraudsters. Not only did this operation save advertisers millions in useless spending, the criminal indictment could deter smart, creative individuals from getting into the fraud business in the first place. U.S. law enforcement now has the chops to take down these white collar criminals operating in faraway places like Russia, Bulgaria, and perhaps living it up in Malaysia, where Sergey Osyannikov, one of the defendants in this case, was arrested.

Fraud makes life difficult for everyone.

In a recent survey of 1,100 advertisers by Singular, we asked: “What are the impacts of not having good marketing intelligence about your ad campaigns?”

The #1 answer?

Poor quality traffic, mentioned by 57% of advertisers. The #2 answer was high fraud, mentioned by 50% of advertisers. What we don’t know is how much of poor quality traffic is attributable to fraud, but I’m guessing a good chunk of it is.

Reading the official indictment document (pictured above) as well as the White Ops whitepaper and news coverage offers insight into the practices and mindset of these persistent and creative individuals who managed to collect an estimated $29 million from one scheme and $7 million from another.

As someone new to Singular, which offers built-in fraud protection for marketers, and who’s spent the last 6 years covering HR and recruiting topics for Simply Hired, Glassdoor, and Lever, I couldn’t help but look at the human side of how these people operated, and consider what we can learn from them.

Fraudsters are perhaps the most successful growth managers—that is, until they get caught.

Here’s an assessment of what marketers and fraudsters do and don’t have in common.

Similarity #1: Think broadly and creatively

These criminals took a comprehensive approach to create their fraudulent networks, looking at every parameter of cybersecurity requirements in order to build networks that would go undetected.

The malware they created that was installed on 700,000 computers at any given time opened hidden windows on hidden desktops in order to go undetected by users. Their bots simulated mouse moves across on tens of thousands of spoofed domains and sent fake audiences to real domains. They also make sure that the malware was installed on computers in countries that were in demand. In short, they considered everything.

Marketers today have to think broadly about their campaigns: what money is being spent where, which creatives are working and why, and consider the marketplace dynamics at play. They use their creativity to find new sources, adjust campaigns, and relentlessly pursue growth.

Similarity #2: Collaborate and assign clear roles

The investigation revealed the roles and responsibilities of each of the eight men. There were several programmers, and several who ran the business side and controlled the funds. Whether you’re a legitimate marketer or a fraudster, it takes a village of specialists to scale an operation.

From the press release:

“3ve was remarkably sophisticated,” added Tamer Hassan, CTO of White Ops. “It showed every indication of a well-organized engineering operation with best practices in software development. It exhibited reliability, resilience and scale, rivaling many state-of-the-art software architectures.”

Interestingly, the collaboration tools they used were pretty similar to the ones used by marketers: spreadsheets in the cloud. (Fortunately, they will never have the benefit of a marketing intelligence platform like Singular that serves as a single source of truth around business results.)

Similarity #3: When you have a good thing, keep it going

These schemes ran for years, detected only by the investigators.

It was their Candy Crush Saga, a top-grossing app of all time that they kept optimizing—until their time was up. While it’s unfortunate that so many advertiser dollars were spent on fraudulent traffic, the law enforcement long game ensured the networks would be shut down for good and at least some of the fraudsters could be caught.

Twenty organizations, including Google, Microsoft, Amazon and Adobe donated resources to take down the scheme. Consider the ad dollars spent as donations to fighting crime.

Similarity #4: Retaliation will get you fired

ZDNet coverage of the Zhukov arrest says that “Zhukov exposed his operation during a fit of rage after a deal with a customer went wrong, and he turned up all his servers against that customer’s video inventory, generating millions of views, and indirectly catching the eye of advertising networks.”

It can be difficult to hold down a job if you have an anger management problem. But instead of just moving on to the next gig, Zhukov faces a maximum penalty of 20 years in prison.

Difference #1: You can be proud of your profession

These men have friends, families, partners, spouses—all to whom they have to lie about what they do for a living. While it may be difficult to explain your occupation to those who don’t work in the industry, it’s far less pressure than having to blatantly lie.

Not only that, as a legitimate marketer you have a wealth of resources and tools such as Singular to support you, and you don’t have to manage your business in cloud-based spreadsheets.

Difference #2: You can spend your bonuses guilt-free

The 3ve defendants were indicted on two counts of money laundering, one for each scheme. It takes a lot effort to conceal large sums of money across nations.

While you probably don’t get to reap millions for your the work you do, at least you can spend your bonus guilt-free on whatever you want, whether it’s an exotic trip or home renovation.

Difference #3: Your work creates happy users, not ad fraud victims

At the end of the day, it’s nice to know that your work to acquire more customers results in moments of joy, satisfaction, or productivity as they consume your company’s product.

The 3ve defendants left a trail of victims: thousands who work in the online industry, and millions whose computers were affected. As a marketer, it’s gratifying to read this list of victims shown in the indictment:

At Singular, we’re proud to say that by helping detect fraud, we’re doing our part to help fight crime.

If fewer advertisers spend on fraudulent sites, the less motivated individuals like these men will be to waste their talents working in fraud. After all, they just might end up in jail with Aleksandr Zhukov, Yevgeniy Timchenko, and Sergey Ovsyannikov.

Request a demo today to learn how our fraud prevention suite improves ROI by reducing spending on fraud.