Navigating ad fraud can be tricky and costly. In 2018, ad fraud cost advertisers an estimated $19 billion, and that number is anticipated to climb to $44 billion within the next three years. It’s critical for advertisers and publishers to know what is ad fraud, the signs of fraud, and how to protect themselves.
- What Is Ad Fraud & How It Works
- Ad Fraud Signs
- Types of Ad Fraud
- Ad Fraud Laws
- How to Solve the Ad Fraud Problem
- Ad Fraud Glossary: Terms and Definitions
What Is Ad Fraud & How It Works
There are many definitions of ad fraud. Ad fraud is the practice of viewing, clicking, converting or generating false interactions with any web asset for the sole purpose of earning money directly or indirectly. And it isn’t just bots doing bad stuff on the web. Fraud can also be conducted by humans (e.g. click farms), too.
Fraudsters use a variety of methods to trick unsuspecting advertisers into doing business with them. On the surface, these forms of fraud appear legitimate to an unsuspecting user, but a closer look says otherwise.
Ad Fraud Signs
Detecting the signs of ad fraud can be tricky, especially if data analysis isn’t your strongest skill. Here are some simple metrics you can track to gauge your click campaign’s security.
Lots of Clicks but Low Conversions. If you’re experiencing abnormally high numbers of clicks with little conversions, you might be an ad fraud target. Fraudsters aren’t trying to convert; their goal is to eat away at your ad budget. There is also conversion fraud which is harder to recognize. In this scenario, fraudsters “convert” by filling out a form after clicking on your ad. But once they complete the action, the bot or human, exits your site.
High Bounce Rates. A bounce is a single-page session on your website. High bounces rates aren’t usually a good thing, but not all instances are ad fraud-related. To tell the difference, look for a high click-through rate paired with a high bounce rate. Bots or human fraudsters will click-through your ad, arrive at your landing page, then immediately leave. And you’re left paying for bogus clicks.
Strange Traffic Sources. Traffic data can reveal small, critical details that there’s an underlying fraud problem. Look for traffic coming from outdated browsers or unpopular devices. Another red flag is multiple clicks coming from the same IP address, or surges of traffic coming from random countries outside of your target parameters.
Types of Ad Fraud
Now that you know the signs of ad fraud, watch out for these types of fraud:
Click Fraud. This common form of fraud occurs through automated clicking by bots or click farms. It’s used to create fake impressions, making it look like an ad has drawn more traffic than it really has.
Lead Generation Fraud. Bot and humans can easily generate ad impressions and fill out forms. They trick advertisers into thinking they’ve gained a new lead’s contact information, but really it’s just a fraudster.
Traffic Fraud. Similar to lead fraud but the publishers are the victims. To increase traffic numbers, some publishers will purchase additional traffic so they can charge more for advertising. However, most purchased traffic comes from unreliable third-party sites which are crawling with bot traffic.
Retargeting Fraud. Scammers program bots to act like humans to interact with ad and trigger a retargeting campaign.
Search Ad Fraud. Fraudsters use keyword stuffing to make their phony websites appear higher on search engine results. Advertisers then buy ads on these fake sites with the false hope that their ads will be seen.
Affiliate Ad Fraud. Also known as “cookie stuffing.” Fraudsters target the commissions affiliates make by driving consumers to a brand’s website where consumers make a purchase. How it works: scammers track the traffic by using cookies. Then when a tracked consumer makes a purchase, the fraudster drains part or all of the affiliate’s commission.
Ad Stacking. Sketchy publishers superimpose a number of ads on top of each other, but only the top ad is visible. Meanwhile all of the ads are registering false impressions.
Pixel Stuffing. This scheme involves shrinking an ad to a one-by-one pixel size on a page. These ads are invisible to the human eye, but they’ll still register an impression if there is traffic on the page.
Domain Spoofing. Fraudsters misrepresent their sites as legitimate by making the URL appear to be a trusted domain when it’s not. For instance, they might swap a lowercase “l” for a capital “I” and create a domain that looks like that of a credible company.
Ad Injection. Malware infects a web page and makes it vulnerable to unwanted ads. Brands like Target and Walmart have fallen victim to ad injection. When an ad is injected onto a site by a fraudster, that ad space is never paid for. And most of the time, the ad will be inappropriate for the site they’re on, or take anyone that engages with them to a questionable site.
Ad Fraud Laws
With ad fraud putting such a drain on advertising revenue, it begs the question: why aren’t advertisers taking any legal recourse?
Well, there aren’t any laws to stop ad fraud. Here are three reasons why.
Legal Resources Are Expensive. Going after scammers isn’t cheap, and your legal team might not even be able to collect enough evidence to hold the attackers accountable.
Fraud Is Easy to Commit and Hide the Tracks. For scammers, fraud is easy to commit, and even easier to hide the tracks. For instance, simply masking an IP address can obscure the origins of fraudulent traffic. But who has time to unearth the real IP address?
There Are Too Many Fraudsters. Ad fraud is a low cost, high reward environment that attracts lots of bad actors. No one has the time or resources to track all of them down.
How to Solve the Ad Fraud Problem
So, with no laws against ad fraud, how do we solve the ad fraud problem?
A.I. Fraud Detection. By using A.I. and machine learning, companies can potentially strengthen their anti-fraud arsenal. They can fight money laundering with real-time analysis of transactions, safeguard cloud storage, reduce false positives, and protect company logos.
Media Buyers Need to Ask Questions. While they can’t stop click fraud, media buyers can help mitigate it by asking questions to avoid worthless traffic. Questions need to include: “what makes a click fraudulent,” “where is the traffic coming from,” “is there a third-party validation system in place,” “what’s your traffic filtration score,” and “is your traffic filtered in real-time.”
Use an Ad Fraud Solution. There’s one metric fraudsters can’t beat: validated lead conversions. And to validate leads, brands need to have an ad fraud solution in place. Specifically, it needs to be a solution that detects the real users from malware, bots, and human fraud.
Ad Fraud Glossary: Terms and Definitions
There’s a lot of terminology in the word of ad fraud. And it’s always evolving. Cut through the jargon and fix your fraud problems with our glossary of ad fraud terms and definitions.
Want more in-depth info? Download our free eBook: Ad Fraud 101: The Complete Beginner's Guide here.