Microsoft is the first company to come across an emerging form of online advertising fraud, but after discovering and christening it, the software giant moved fast to ensure that its life was short lived. Dubbed Click Laundering, the new pay-per-click (PPC) advertising fraud method involves masquerading invalid clicks as coming from legitimate users, much in the same manner as money is laundered in order to make it appear as if it has a legitimate source. In at least two cases, the Redmond company gathered sufficient evidence that advertisers leveraging Microsoft Advertising were targeted by click laundering schemes, that it debuted legal action.
The two lawsuits were filed this week in the U.S. District Court for the Western District of Washington, against yet-unknown fraudsters (John Doe), and against Web publisher RedOrbit Inc. and its President, Eric Ralls. Microsoft is alleging that both the parties mentioned above engaged in click laundering.
“Online ad fraud is evolving in sophistication all the time. Fighting it demands vigilance and dedication to an honest and secure online marketplace. We believe that a trusted marketplace is critical to Internet commerce, and Microsoft will continue to take aggressive action working with industry and law enforcement to protect our platforms, customers and advertisers,” Brad Smith, senior vice president and general counsel for Microsoft, said.
Under normal conditions, web publishers sign a deal with online advertising companies such as Microsoft, and offer content for free, along with ads from companies using the Internet for publicity campaigns. While accessing the content offered by web publishers, end users can also click on advertisements if they find something that appeals to them. Click fraud involves generating invalid clicks from either computer bots, or users that are simply clicking on ads without the intention of buying the products advertised.
Online advertisers have various mitigations in place to detect invalid clicks and not charge advertisers. However, click laundering is designed to make it very hard for automated systems to filter invalid and valid clicks.
“One form of click laundering involves computers infected with malicious software that delivers rogue search results. Without the user’s knowledge, the infected computer mimics a legitimate search engine, but returns search results adulterated with useless parked domains – i.e., Web addresses that appear to be relevant search results, but contain no meaningful content. The unwitting user opens one of the parked domains, clicks a link or two, realizes it’s not what he or she is looking for and closes the window. What seems like a harmless digital dead end is, in fact, a laundered ad click that appears legitimate to an ad platform provider such as Microsoft but offers no value to the advertiser who would be charged for it,”
Tim Cranton, associate general counsel, Microsoft Digital Crimes Unit, revealed.
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