Law enforcement activity and improved security has forced criminals to look for easier targets, so they've zeroed in on advertising networks — and advertisers are stuck paying the bill.
Criminals are hacking into the advertising networks themselves to plant malicious ads, hacking into websites to replace legitimate ads with their own, and using botnets to artificially inflate ad views and click-through rates.
The advertising networks themselves aren't doing enough to police the situation, said Jalal Nasir, CEO of Pixalate.
"The traffic that is coming through malware-ridden websites or machines is up almost three times in 2015 compared to what we've seen in 2014," he said. "Seventy percent of the sellers have been exposed to malware-driven ad fraud. Last year, it was half of that number."
Pixalate recently analyzed over 400 advertising networks and rated them for security, tracking more than 100 billion ad impressions and 350 million different IP addresses.
Google's AdExchange platform, normally in first place for security, slipped to second place in the security rankings because of a particularly nasty malware attack on one of its resellers, Engagelab.com.
"It was hacked, and it made Google's AdExchange vulnerable to malware in their infrastructure," said Nasir.
OpenX moved up a spot, to first place, and the Rubicon advertising network retained its third place position.
Overall, however, the big US networks are doing a reasonable job, he said — especially compared to some international networks.
"At the bottom of the list were a lot of the ones based in India and Asia-Pacific," he said.
The absolute worst three in this month's report were Matomy Media and Xertive, both based in Tel Aviv, and San Francisco-based Adadyn.
It's a difficult problem to solve, said Nasir.
"Companies like Google are making strides," he said, "But the other networks don't have a robust system to ensure that their infrastructure doesn't get hacked. The criminals are getting much more sophisticated — the defenders are way behind."
For example, he said, advertising networks could be more careful about the publishers they partner with.
"There are certain publishers that get hijacked more often than others," he said.
Some industries also do worse than others. For example, more than 30 percent of malvertising appeared on technology-related websites. According to Nasir, tech sites are a good place to trick users into downloading malware by offering them free downloads of legitimate-seeming software.
There are also some steps that advertisers can take to protect themselves, he added.
"The first thing the buyers should do is ask the ad networks what systems they have in place to prevent fraud," he said. "Has the ad network taken any precautions? Are they using any independent third party to take care of that?"
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