In 2019, advertisers lost a whopping $42 billion to ad fraud, and the problem is only getting worse. According to Juniper Research, that number will more than double to $100 billion by 2023. More granularly, research suggests that as many as 25 percent of all ad clicks are fraudulent, which is a nice way of saying that bad actors put one out of every four dollars you spend on advertising in their own pockets.
Add it all up, and it comes as no surprise that more than one-third of marketers agree that ad fraud is becoming a bigger and bigger problem every day—a number we suspect will only continue to increase over time. Already, 37 percent of advertisers say that fraud is one of the major downsides to programmatic ad buying.
Why Ad Fraud Matters to Businesses Like Yours
The goal of any business is to make money, so of course losing money to ad fraudsters is a serious problem. At the same time, though, it’s important to keep in mind that ad fraud damages more than your bottom line. Beyond costing you a lot of money, ad fraud has several other disadvantages.
Performance campaigns struggle due to skewed metrics
In the age of data, it can be easier than ever to make the best and smartest decisions. But that’s only possible if you can trust that your data is telling you the truth and answering the actual questions you’re asking. Because ad fraud skews your metrics, your campaigns won’t perform at their highest levels.
You don’t really know what’s working and what isn’t
Fraudulent clicks mean you won’t know what’s working and what isn’t. You might have a ton of data on hand, but all of that data isn’t clean. It becomes guesswork to figure out the next move for your business.
Future campaigns become harder to plan
In a world without ad fraud, you are constantly generating trustworthy data and using that data to inform your future campaigns. This way, you can continuously optimize your campaigns and get better and better results over time. When you don’t know what’s working and what isn’t, planning future campaigns and getting the results you’re hoping for becomes that much harder.
What Are the Most Common Types of Ad Fraud?
Ad fraud comes in many shapes and sizes. As technology evolves, new types of ad fraud continue to emerge. With that in mind, let’s take a look at 10 of the most common methods of ad fraud.
1. Domain spoofing
Domain spoofing occurs when hackers and fraudsters create websites and email addresses that look legitimate but are actually fake. When users arrive at the fake website, it appears to be the real thing, so they interact with it as they normally would. The goal is to trick users into handing over sensitive information (e.g., credit card numbers or other personal information).
2. Cookie stuffing
Cookie stuffing is a kind of affiliate marketing fraud that occurs when a user visits a website, and that website unsuspectingly drops a fraudulent cookie on their browser. The hope is that the user will ultimately end up completing a transaction that results in the fraudster earning attribution for the sale, even though they didn’t drive it in the first place.
3. Influencer marketing fraud
In the age of social media, influencers are becoming more and more important to many businesses’ digital sales strategies. Unfortunately, not every influencer is the same. Influencer marketing fraud occurs when an influencer is either using bots to inflate their engagement or the influencer isn’t even a real person.
4. Click bots
Many advertisers get paid when someone clicks on their ads. This payment scenario has led to the rise of click bots, which are automated scripts that repeatedly click on the same ad over and over again. By inflating the number of times an ad was clicked, fraudsters can get away with a hefty payday.
5. Click farms
Why build a bot to perform click fraud on your behalf when you can enlist real-world human beings to evade bot detection techniques, pay them cheaply, and get a better end result? Click farms are operations where a high number of low-paid workers spend their days surfing the web, filling out forms, clicking on ads, and more—all to generate ill-gotten income for their employer.
6. Ad stacking
Ad stacking is the process of placing several different ads on top of one another with only the top ad visible to the reader. When the user visits the page, every advertiser is charged for an impression even though that individual only saw a single ad, and the fraudsters make out well.
7. Cost per acquisition (CPA) fraud
CPA fraud is an affiliate marketing fraud activity where the bad actor steals referral credits that are rightly due to affiliates, thereby taking a chunk out of their earnings. Affiliates generally get rewarded when they promote products and send people to a brand’s website in hopes that those users will ultimately end up converting into customers.
8. Impression fraud
Some marketers are willing to pay a certain fee for one thousand ad impressions, buying them on a cost per mille basis. Using a variety of techniques—including ad stacking and pixel stuffing—it’s possible to game the CPM metric by telling advertisers they’ve had one thousand impressions when the true number is much lower.
9. Lead generation fraud
Fraudsters commit CPL fraud when they use bots to fill out forms and create fake leads—or do the dirty work by hand. In this type of fraud, a bad actor might even populate forms with real-world information when in fact those individuals never agreed to send you their info in the first place.
10. Click fraud
Click fraud happens when a bad actor clicks on a link that pays out on a cost-per-click basis. In some instances, they will enlist the services of a click farm to do the clicking on their behalf. In other instances, they might use bots for the same purposes.
As you can see, there is a seemingly endless amount of different ad fraud tactics bad actors can employ to take more and more of your revenue. Unfortunately, preventing all of these forms of fraud can be incredibly difficult and time-consuming.
The good news is that there are solutions to this problem. For example, by investing in an ad fraud detection and prevention solution like Anura, you get the peace of mind that comes with knowing that fraudsters’ attempts won’t yield the easy payday they are hoping for, no matter how many different methods they try.
How Much Are You Losing to Ad Fraud?
If you don’t have an ad fraud detection and prevention solution in place, your marketing campaign performance is almost certainly being affected by fraudsters—and not in a good way.
We created Anura to help advertisers like you maximize their marketing campaign performance and keep more of their hard-earned money. Our comprehensive ad fraud detection solution can protect your company from all kinds of fraudulent activities, including those discussed in this post.
With Anura, you can save money while increasing your marketing campaign performance. Curious how much money that might be? Check out our free ad fraud calculator to get a better idea of how big of a slice fraudsters are taking out of your bottom line.