How Much Click Fraud Is Acceptable in Your Ad Campaigns?

Risk management is an important part of any business operation—especially since no business workflow is absolutely risk-free. Ad campaigns are no exception to this rule. Every online ad campaign is subject to some risk of ad fraud—whether it takes the form of affiliate fraud, PPC fraud, domain spoofing, or any of the other forms of digital fraud.

Knowing how to mitigate these risks down to an acceptable level is a crucial skill for modern marketing departments. But what is an acceptable risk level for online advertising? How much fraud risk does the average ad campaign face? Most importantly, how can you minimize your risk of being a victim of fraud in your ad campaigns?

How Much Click Fraud Does the Average Ad Campaign Face?

So, what’s the average risk of fraudulent clicks, CPC fraud, or other forms of fraud affecting your online ad campaigns? While the specific level of risk that you face will vary depending on a wide variety of variables, the average ad campaign experiences a 25% fraud rate.

In other words, 1 out of every 4 interactions with your ad campaigns is likely to be from fraudulent sources. This is an insanely high failure rate. Imagine if you were to go to a car dealership to purchase a high-end luxury car, but there was a 25% that the car they give you the keys to was actually a rusted-out Edsel—a car infamous for being a massive waste of money.

Would you still keep buying cars from that dealer? It’s safe to say that you wouldn’t. In fact, you’d probably demand a refund and some other concessions from the dealership to compensate you for your wasted time.

Fraud can take many forms.

Some examples of the types of ad fraud your online campaigns could encounter include:

1. Domain Spoofing

This is the practice of disguising one website as a different one that is more valuable to trick you into spending more on impressions and clicks than you normally would. For example, a fraudster might copy the design of a popular news website, create a website with a near-identical domain name, and then charge a cost-per-click (CPC) advertising rate based on what the other site would normally be worth.

This form of click fraud can be especially bad if the fraudster also used bots or click farms to artificially inflate the number of clicks your ads on the site get.

2. Click Farms

Some fraudsters hire (or operate) entities known as click farms to produce as many clicks as possible on your ad campaigns so they can claim credit for them. These human fraud farms often have scores of workers operating in sweatshop conditions as they alternate between using desktops, laptops, and mobile devices to repeatedly click on ads for hours on end.

3. Bot Fraud/Click Bots

To make the process of committing click fraud even easier, some fraudsters decide to automate their fraud and use large botnets composed of many zombie bots to click on your ads.

Just how big a risk are bots for clicking on your ads? According to Help Net Security, “bad” bots account for 39% of all traffic on the web! That’s more than human users, which account for 36% of web traffic. The remaining 25% of traffic comes from benign bot programs like Google’s web crawlers.

Now, not all “bad” bots are specifically made to be click bots—some are even worse than that! These bots can be programmed to do all kinds of things, like filling out forms to access your gated content or enable a lead generation fraud scheme, conducting DDoS attacks, or even mining sensitive information from your business’ network.

Also, when a bot is tasked with clicking on your ads over and over as part of a PPC fraud scheme, a single bot program could conceivably click on an ad hundreds of times in a minute—and fraudsters often employ botnets with dozens or hundreds of bots in them at once.

In short, once a click bot is targeting your pay-per-click ad campaigns, you can be sure that you will see a large amount of money going towards fraudulent clicks.

How Much Click Fraud Is “Acceptable” for Your Ad Campaigns?

So, just how much fraud would be considered an “acceptable risk” in your own ad campaigns? While we would love to say “0% fraud is the only acceptable level of fraud risk,” in reality, it is nearly impossible to guarantee that all fraud is stopped. There are simply too many fraudsters operating too many kinds of fraud schemes

Also, the answer to the question of “what level of fraud is acceptable for your business?” might vary depending on your business’ resources and priorities. For example, losing $1 million to fraud in a month might not impact a large multinational corporation very much, but it would be a crippling loss for many small to midsize businesses.

One way to assess how much fraud is “acceptable” for your company is to ask yourself at what point does click fraud:

1. Begin to actively interfere with your customer lead generation efforts?
2. Start to cost your business more than the price of any ad fraud mitigation tools?
3. Allow your competitors to get ahead while your ads are down because you’ve already spent your whole ad budget?

If click fraud gets so bad that any of the above statements become true, then you’re facing too much fraud!

Of course, it’s often difficult to spot click fraud when it happens. Manually reviewing ad campaign data to find patterns indicating fraud takes both time and considerable expertise. So, by the time you can positively identify the fraud, the fraudster is long gone—having already completed their objective. This is why it’s important to look for an ad fraud solution that provides real-time detection.

How Ad Fraud Solutions Help You Mitigate Risk to Save Time and Money

Although there is no way to guarantee that you catch 100% of all the fraud that targets your ad campaigns—there are simply too many fraudsters using a variety of fraud strategies to catch absolutely everything—you can significantly reduce your risk to a tiny percentage of what it would normally be by using the right ad fraud solution.

How does an ad fraud solution help you mitigate your ad fraud risk to save time and money?

1. By Speeding Up Fraud Detection

An ad fraud solution with real time detection helps you greatly speed up the process of discovering fraud. For example, Anura’s ad fraud solution checks your website visitors in real time—comparing hundreds of data points about each one to a massive database spanning over a decade of real conversions.

The benefit of detecting fraud as it happens is that it allows you to deny payments to fraudsters. So, instead of having to go through the authorities and the banks to try to reclaim stolen money, you can avoid having to pay for fraudulent clicks in the first place.

Even advertising platforms can benefit from using ad fraud solutions with real-time detection capabilities. By protecting the PPC campaigns they run with real-time ad fraud solutions, they can promote the reliability of the leads they generate for their customers. This helps to make their click-based campaigns more reliable (and valuable) than the competition—which helps to both retain existing PPC customers and attract new ones who are tired of spending money on clicks that don’t convert into new business opportunities.

2. By Automating the Detection Process

Manually checking for signs of ad fraud by sifting through all of your campaign data is a long and tedious process that requires a high degree of expertise. This often means hiring a dedicated expert to work many hours to analyze your data for signs of fraud.

Even working on a contract, per-check basis, you can expect to spend a lot of money if you want to protect every online ad campaign you run from fraud, as it can take an expert dozens of hours to manually review the data from each campaign to positively identify even a fraction of the fraud that occurs.

By using an ad fraud solution, you can reduce the hours of time and expensive labor spent on manual detection into a simple report that you can review yourself in a few minutes. This greatly streamlines the process of finding fraud while eliminating a large variable expense from your operations budget.

3. Providing Reports Detailing Why Activity Is Flagged as Fraud

Ad fraud solutions like Anura can provide reports showing exactly why each flagged interaction was labeled as fraud. This empowers you to confront the fraudsters yourself if you need to—and helps keep you from having to pay for fake clicks.

With an ad fraud solution like Anura, you don’t have to guess or just take our word for it. You get to see the evidence and use it as you see fit. This also helps you proactively protect yourself from fraudsters by giving you the insights you need to identify fraudulent advertising partners or networks and remove them from your ad campaigns.

These are just a few of the ways that an ad fraud solution like Anura can help protect your online ad campaigns from fraud while saving you time, money, and headaches. Why wait to protect your ad campaigns from fraudsters? Start checking your traffic right now!