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What Is Ad Fraud?

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Since it was first detected in 1999, ad fraud has been an ongoing issue, increasing at a fast rate alongside digital ad budgets. In 2016, advertisers spent $72.5 billion on digital advertising, with roughly 10% or $7.2 billion of ad spend lost to fraud that year. Last year, marketers spent $567.49 billion in digital advertising, with a projected loss of approximately $100 billion, almost 12%, due to ad fraud in both mobile and desktop platforms. What is digital ad fraud? How does ad fraud work? And what have we learned in the past six years?

It’s obvious that online advertising fraud has a negative impact on budgets, but there are hidden costs as well: fewer genuine leads coming into your pipeline, lower employee morale, damaged brand reputation, and financial losses due to TCPA non-compliance. You can’t beat ad fraud if you don’t know what it is or what to look for, so let’s start with the basics.

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Uncover the Truth About Ad Fraud and How to Stop It

At Anura, we define ad fraud as the practice of viewing, clicking, converting, or generating false interactions with any web asset for the sole purpose of earning money directly or indirectly. Fraud can involve bots, malware, humans, or a combination, depending on the end goals of the fraudsters.

Given all the players in the digital advertising space, it’s not surprising that ad fraud can happen anywhere in the digital advertising chain. Available ad inventory may be inflated so that advertisers are buying space that doesn’t exist. Ads may be placed but merely stacked on one page where they’re unlikely to be seen. Invalid traffic—whether by bots or humans, intentional or accidental—inflates the number of impressions or clicks advertisers pay for.

Not only can ad fraud happen almost anywhere in the digital advertising loop,  but it also occurs in many forms. Many are similar and may even overlap; all of them increase advertising costs while lowering campaign performance.

Learn about the true cost of ad fraud and its impact on generating revenue with  our new eBook! 

Types of Ad Fraud

There are a few ad fraud types that happen differently, but the result is the same: you’re not getting the impressions you’re paying for.

These are common forms of impression fraud, but they don’t impress us much:

Ad Stacking

Ad stacking occurs when unethical publishers stack ads on top of each other so that only one ad is visible, rather than creating a vertical column of ads, as the term implies. Whether your ad is buried under other advertisers’ ads where it’s never seen, or all the ads in the stack are yours, but only one is visible, you’ll be charged for the impression(s) whether your ad is seen or not.

Pixel Stuffing

In online images, one pixel is approximately 1/72 of an inch. Now imagine your ad and others placed behind a 1x1 pixel on a web page or mobile site. These ads are invisible to the human eye, but when there is traffic on the page it counts as an impression even though nobody sees them. (It might also explain some of the phantom sounds you occasionally hear with video ads playing at a size you can’t see.) Pixel stuffing most often occurs on mobile pages and apps.

Other Types of Ad Fraud

Domain Spoofing

Imagine seeing a bird that looks like a duck and quacks like a duck, but closer inspection reveals it’s an albatross in disguise. Domain spoofing is where attackers create a website that closely resembles a legitimate one. The domain name might feature a typo or change a letter to a similar character like using the numeral one instead of the letter “I”. The advertiser thinks it is a legitimate site and may even pay a premium to be on it, but it’s really a spoof created by fraudsters. Your ad won’t be seen by your target audience, assuming anyone ever visits the spoofed site to see any ads at all.

Geo Masking

One of the top five ad fraud types in 2022, geo masking spoofs the IP addresses of lead traffic. Why does this matter? Advertisers are willing to pay more to target certain geographic regions where they know there are more prospective buyers for their products or services. Fraudsters can mask the actual location of the lead to charge a premium, diluting the advertiser’s ROI while lining the fraudster’s pockets.

Cookie Stuffing

Hold on to your Oreos! Cookie stuffing has nothing to do with extra cream filling, but it does stuff third-party tracking cookies that can attribute online sales credit to bad actors instead of the rightful publisher or affiliate marketer. This can affect your relationships with affiliates who aren’t getting their fair share of revenue.

Click Fraud

The most common type of ad fraud involves automated clicking by bots or human click farms. Fraudsters generate fake impressions and clicks that make it look like an ad has drawn more traffic than it really has. 

What’s New in Ad Fraud?

One form of ad fraud that is getting a lot of attention is connected TV (CTV) ad fraud. CTV fraud, which seems to be driven mainly by bots, has increased as more streaming services accept ads to lower consumer costs and increase revenue. In some cases, fraudsters use screensavers that generate impressions even when the screen is turned off. Fraudsters have also created false CTV traffic by impersonating other connected devices, including smart refrigerators.

How to Protect Yourself

Ad fraud affects advertisers, publishers, and consumers. It is illegal, and when caught and prosecuted, fraudsters face imprisonment. The challenge is that these fraudsters are hard to catch, so the best defense is to know what to look for and take action to detect ad fraud and prevent it from happening to you. Some strategies to consider:

Be Informed

Stay up to date on the latest fraud trends and tactics that fraudsters are using, as well as the best ways to detect and prevent fraud from happening to you.

Monitor Traffic Quality

Watch for unusual patterns or suspicious activity in your campaigns and on your website. 

Know Your Publishers

Programmatic advertising offers a convenient way to buy ads, get them in front of your intended audience, and measure campaign results. But it’s also rife with ad fraud; we’ve seen as much as half of programmatic ad spend lost to fraud. When possible, place your ads with reputable publishers and ad networks, preferably those that are TAG Certified or accredited by the Media Rating Council (MRC).

Implement an Ad Fraud Solution

An ad fraud detection and prevention platform can not only detect and block fraudulent traffic, but it also should identify where your good traffic is coming from so you can invest more of your advertising dollars in those channels. 

While no ad fraud solutions are 100% fail-proof, Anura marks fraud with 99.999% accuracy. When it comes to evaluating traffic, we don’t rely on any one data point but instead examine and assess hundreds of data points to learn about your site’s visitors. Our tools for ad fraud protection enable you to analyze traffic in real time and provide valuable insight so we can work together to identify fraud and develop an action plan to prevent invalid traffic.

Anura’s accuracy, thoroughness, and analytics set us apart from other ad fraud detection solutions. Sign up for our fully functional 15-day trial and see for yourself why more and more companies are switching to Anura as their ad fraud prevention partner.

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