Malvertising Blog Image computer screenIn our last blog we talked about various problems with programmatic ad buying, automated buying of banner ads that are delivered via third-party ad networks. A mere 55% viewability rate, impression delivery fraud and brand safety were three major troubles we discussed. The fourth issue that we mentioned is becoming more and more serious, so it is worth taking a closer look. It is malvertising, short for malicious advertising, which is the delivery of damaging code to websites via seemingly normal looking online ads. No advertising network is immune. Google, Microsoft, Yahoo and AOL’s ad networks have all recently been infected.

According to eMarketer statistics, US advertisers will spend almost $15 billion dollars on programmatic ad buys this year. That is a whopping $5 billion dollars more than 2014, with the practice continuing to grow in 2016 and beyond. Clearly, this technical method of ad buying is booming and transforming the way the online advertising industry does business. Efficiency and the ability to target audiences by demographics, time of day, and geography across a network of publishers, rather than negotiating ad buys one publisher at a time, are excellent benefits. Plus, advertisers can change direction of their campaigns at any time rather than locking into contracted advertising campaigns and seeing them through to their agreed upon end dates. Taking it a step further, advertisers can bid on advertising spots in real time, called Real Time Bidding (RTB), which is when advertising inventory is bought and sold on a per-impression basis, via instantaneous auction.

It was just a matter of time before the digital advertising industry embraced the advantages that technology offers. Unfortunately, as programmatic grows, so do the number of victims of malvertising. According to an article that net-security.org posted last week, “Researchers found that malvertising campaigns carried out by hackers increased 325 percent in the past year.” Malvertising, like other forms of cyber-attacks, are very difficult to detect and stop. According to research revealed in Cisco’s semi-annual report on internet security, four out of ten cyber-attacks succeed! The report also found that, “online ads were the second-most common source of Web malware encounters, accounting for 16% of incidents.”

So how does malvertising work?

Basically, an ad appears on a web page and the computer is infected. Site visitors do not have to click on the ads to become victims. The malicious software routes the computer browser to a different server that hosts the malware. These types of infected ads served via ad networks can remain dormant and undetected for a long time.

What does malvertising do?

Once computers are infected, their users become victims of identity theft and cyberfraud, which is the stealing of credit card and financial information. Malvertising can also expose web surfers to ransomware, which is malicious software that is designed to block access to computers unless a ransom is paid. According to stats published by Norton, ransomware is on the rise and 3% of victims are paying up. That amounts to approximately $5 million dollars per year in earnings for these criminals! According to a findings by Intel Corporation, “high-tech extortion attacks” [aka ransomware] surged 165 percent in the first quarter of 2015.”

How can we stop it?

There is no way to unlock infected computers once the malicious software does its damage, but here are some obvious tips. Install ad blocking software, limit blindly surfing the web into the unknown, and back up all important files.  Let’s hope the ad network universe joins together and figures out a better way to stop the bad guys.