This isn’t new news, but I came across this post the other day on Hacker News and was pretty shocked by the numbers purported to have been generated through this rather elaborate advertising scam. Without going into too much technical detail (although if you’re interested, do check out the full post), the following illustrates how a single man went about this while bagging himself hundreds of thousands of dollars each month.
In a nutshell from the illustration above, the scammer would buy traffic and send it to his site, HQTubeVideos. When a visitor click a link, parked domains with innocent sounding names are loaded in invisible iframes which serve up ads from various networks. The ads within the parked domains get clicked on which sends useless/fraudulent traffic to the legitimate publishers.
The people who are affected negatively by this are the big brands who lose out by paying the publishers to display their advertising only to receive invisible traffic and also the publishers who pay out to the ad networks and to the scammer.
According to the post and working based on conservative figures:
- The site gets 500K-1M visitors per month
- The cost of this traffic is approximately $1.5K to $3K per month
- Each unique visit loads 7 sites, which then generate clicks. Let’s assume that there is no reload of the invisible sites, to keep the estimates low.
- Assuming 500K visitors and that just one click out of the seven sites goes through, this is 500K clicks per month (low estimate)
- Assuming 1M visitors and that all clicks, in all 7 sites, go through, this is 7M clicks per month (high estimate)
- The a low-end estimate for CPC click costs is 30 cents, out of which we can assume that the scammer gets, say, 10 cents.
- This generates a total income of \$50K to \$700K per month
- The scheme is running for 8 months now, generating total revenue of $400K to $5M so far.
To read the full article: http://www.behind-the-enemy-lines.com/2011/03/uncovering-advertising-fraud-scheme.html