What does digital ad fraud mean?

Digital ad fraud is often described as intentionally jumbling and misrepresenting ad engagement metrics. This fraud is committed by fake traffic from both humans and bots- that generate fake impressions and, in turn, affect the click-through rate (CTR). This invalid clicks from bots drain the resources spent on the ad and significantly affect the publisher’s effort to grow a quality ad inventory. This non-human traffic also distorts the analytics of the webpage and affects the overall marketing campaign.

Additionally, publishers’ brand reputations are always hurt due to this invalid traffic. Verification reports and quality scores of the website are also impacted negatively. Currently, most security measures to filter bot activities from human activities could be more optimal. 

How Serious Is Ad Fraud?

In 2015, Google decided to take steps to combat ad fraud; their backlist filter removed 8.9% of invalid clicks in the double-click campaign alone. From that time to this present moment, the fraud problem has significantly increased. Reports suggest that the sale of programmatic ad buys is about 37% of click fraud.

According to research by Juniper, as of 2022, advertisers lost up to $68 billion on ad fraud around the globe. This statistic shows that this issue is not going away soon enough; instead, fraudsters are becoming more upgraded and sophisticated in their approach. Big brands such as Unilever, Financial Times, and New UK have taken steps to reduce their budget on ads and monitor fraud. P&G (Proctor and Gamble) have reportedly reduced the amount they spend on advertisement by about $700 million and cut off half of the agencies they work with to minimize ad fraud’s effect.

One of the biggest targets of digital ad fraud will be video ads because of its streaming media services. Much ad fraud happens over the programmed marketplace, especially display ads, but the truth is that ad fraud exists on all digital platforms whether we know it or not. One primary industry that remains vulnerable to ad fraud is app stores because they offer a more sophisticated audience feature, unlike Google, Facebook, etc. It has become effortless for fraudsters to manipulate the proposition of most of these apps because they mostly use CPI (cost per install).

Ad fraud affects everyone and cuts off trust across the entire advertisement chain. For publishers, their customer retention rate is lowered due to poor performance; for advertisers, they get ad blockers; and the website suffers because genuine users look for alternative platforms because of their bad experience. Overall, ad fraud has a substantial negative impact on all sides.

Types Of Ad Fraud

While most people think that ad fraud is committed by bots alone, several ad frauds are committed by ad publishers and agencies. Most ad fraud is achieved by:

• Bot clicks and impressions
• Ads that real users do not view
• Ad publishers who buy traffic or deliberately use the platform to misrepresent performance and data

Ad fraud that real people commit is the most difficult to detect because while the impression and clicks may be fake, it is carried out by actual users. Unfortunately, most ad verification software won’t notice or blacklist them because they are technically ‘real users’.

Let’s talk about the various type of digital ad fraud:

Ghost sites

Fraudsters create fake websites to stand as the host on ad platforms and programmatic exchanges. When you post an ad on a ghost site, the fraudulent bot comes to play and performs click fraud, generating fake clicks or impressions, which then pay the fraudster based on cost per click.

Traffic sourcing

These fraudsters have developed a bot that can pretend to be an actual human and generate human traffic. This fake traffic is sold in bulk to publishers who are unaware at a very cheap rate.

Domain spoofing

In this type of fraud, a poor-quality or irrelevant website is intentionally misinterpreted as a high-value website. This way, fraudsters gain far more than the unrelated site commands typically. The fraudster will then flood the low-quality website with bots and divert the revenue.

Ad stacking

This method generates various impressions from a single web page by stocking (as the name implies) multiple ads on each other. While only the top ad can be seen, the other unseen ad is also counted as an impression.

Pixel stuffing

For this type of fraud, the number of ads that can be on the website is multiplied vastly. The ads are stuffed into a single pixel, making them invisible to humans.

Ad injection

Here fraudsters inject ads into a site unknown to the publisher or without the publisher’s approval. This injected ad can pop up anywhere. It can pop up under, over, or even replace the existing ad (similarly to ad stacking). This kind of ad fraud affects the publisher’s viewability score and brand.

Ways To Combat Ad Fraud

You can employ various ways to fight ad fraud and its overall effect on your website. Here are some of them:

Employ Tools For Ad Verification  

If you have decided to use a private network, employing a third-party audit provider is essential. Sometimes, advertisers use multiple third-party verifiers to audit those private platforms. So third-party providers make their analytics research and performance available for ad agencies that indicate accurate results instead of fake ones. They also provide a filter to pick out fraudulent activities in real time before draining your ad budget.

Measure Conversions, Not Just Clicks

Consider switching your focus to more actionable metrics; instead of focusing on clicks, focus on conversions or lead forms. This doesn’t mean you should be extra paranoid about clicks but be vigilant because bot activities can easily manipulate clicks. This method should be used for open marketplace primarily, but it can also be considered for other platforms like Instagram.

Use Trusted Platform Only 

Most people focus on traditional advertising platforms like Facebook, but platforms like this should be used at your discretion. Until these platforms can fix the general ad fraud issues, it is crucial to be proactive by tracking and blocking ad fraud before they drain your ad.

Don’t Rely On Machines and Agencies

Take control of your campaigns by implementing your policies for manual review. If you are working with a third party, it is crucial to demand transparency on their processes to ensure that you both share the same values regarding ad fraud. It is never wholly or compelling enough to manually review your website performance without employing third-party ad trackers, but implementing your manual review helps create a repeatable process and ensures that your chances of being subjected to ad fraud are reduced drastically.

Take Advantage Of Big Data Analytics 

When you compare your fake traffic to that of other campaign analytics, you get a better understanding of how ad fraud works. Taking advantage of these big analytics, you get to know how to tailor your ad so that chances of being hit by invalid clicks are reduced. This way, you can learn to implement more vital ad fraud prevention practices that, in turn, strengthen your ad and allows you to have a better result for your clients.

Ultimately every advertiser and internet user is prone to be a victim of the scourge of ad fraud flying around. While new technologies are available to combat ad fraud, it is still the ultimate responsibility of advertisers to protect themselves and their interests. Without duly educating yourself on this issue of ad fraud, you have opened yourself widely to be a target of ad fraud, which means that you will suffer the effects of ad fraud.

Conclusion 

Digital ad fraud remains a significant challenge in the online advertising industry. The prevalence of fraudulent activities, such as bot traffic, click fraud, and ad stacking, poses a severe threat to advertisers’ investments and the overall trust in digital advertising. While industry stakeholders and technology advancements have made strides in combating ad fraud, it continues to evolve and adapt, requiring ongoing vigilance and innovative solutions.

To mitigate the risks of digital ad fraud, advertisers must prioritize implementing robust fraud detection and prevention measures. This includes leveraging sophisticated fraud detection tools, employing third-party verification services, and establishing transparent partnerships with reputable publishers and ad networks. Additionally, industry collaborations and information sharing among advertisers, publishers, and ad tech providers are essential to staying ahead of fraudulent practices. 

By collectively addressing this issue, the digital advertising ecosystem can work towards creating a safer and more trustworthy environment for advertisers and ensuring that ad spend generates genuine engagement and delivers real value.