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    Securing Online Advertising: Rustlers and Sheriffs in the New Wild West
    07 Oct 2008Working Paper Summaries

    Securing Online Advertising: Rustlers and Sheriffs in the New Wild West

    by Benjamin G. Edelman
    Online advertising remains a "Wild West" where users are faced with ads they ought not believe and where firms overpay for ads without getting the results they were promised. But it doesn't have to be this way. Enforcement by public agencies is starting to remind advertisers and ad networks that long-standing consumer protection rules still apply online. And as advertisers become more sophisticated, they're less likely to tolerate opaque charges for services they can't confirm they received. During the past five years, Edelman has uncovered hundreds of online advertising scams defrauding thousands of users, including all the Web's top merchants. This chapter summarizes some of what he has found and what users and advertisers can do to protect themselves. Key concepts include:
    • Advertising security gaps are widespread.
    • Many companies don't view advertising fraud as a priority. Marketers often write off advertising fraud as an unavoidable cost of doing business. But effective fraud reduction can transform "unavoidable" losses into a bigger bottom-line and a real competitive advantage.
    • Some advertisers compensate ad buyers in ways that discourage ad buyers from rooting out fraud. Furthermore, ad networks operate under mixed incentives in their supervision of partners, affiliates, and syndicators. Often, a marketer's partners and even its own staff have strong incentives to ignore problems rather than to take effective action.
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    Author Abstract

    Read the news of recent computer security guffaws, and it's striking how many problems stem from online advertising. Advertising is the bedrock of web sites that are provided without charge to end users, so advertising is everywhere. But advertising security gaps are equally widespread: from "malvertisement" banner ads pushing rogue anti-spyware software, to click fraud, to spyware and adware, the security lapses of online advertising are striking. During the past five years, I have uncovered hundreds of online advertising scams defrauding thousands of users—not to mention all the web's top merchants. This chapter summarizes some of what I've found—and what users and advertisers can do to protect themselves.

    Paper Information

    • Full Working Paper Text
    • Working Paper Publication Date: September 2008
    • HBS Working Paper Number: 09-039
    • Faculty Unit(s): Negotiation, Organizations & Markets
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