By 2025, $500 billion per year will be spent on digital advertising. With all that money being spent by companies trying to grab a few milliseconds of attention, the costs of ad fraud can add up quickly. It’s estimated that in 2019 that cost was $42 billion, an increase of 20% from the previous year.
What is Ad Fraud?
So what is ad fraud? Wikipedia defines it as “concerned with theory and practice of fraudulently representing online advertisement impressions, clicks, conversion or data events in order to generate revenue.”
Some examples of ad fraud below:
- The “user” who was served or clicked on the ad was not human or acted maliciously (in the case of click farms or competitors) – otherwise known as click fraud.
- The ad was not delivered as expected, as is the case with location fraud, domain spoofing, or poor viewability.
In the examples above, the advertiser’s money is wasted. And although there’s some debate over what is or isn’t ad fraud, here we’re going to consider actions that are squandering your ad campaign budget due to factors outside of your control to meet that definition.
Here’s a summary of some types of ad fraud, how they work, and why you should be concerned. This isn’t an exhaustive list, but it’s a good start to understanding some common types of advertising fraud:
Click fraud is the malicious use of clicks intended to eat up your ad budget. These clicks can involve bot traffic, malware, click injection, click farms, or even malicious clicks from competitors. When you’re paying for each click, this kind of behavior will deplete some of your budget without delivering real results.
Advertisers often pay to have ads delivered to a certain region, but fraudsters can make it appear as if ads are being served to the desired areas even when they’re not. This means your online advertising budget gets wasted on impressions that aren’t delivered to your target audience, draining your budget.
Not all ad impressions are viewable. Sometimes this is because an ad didn’t fully load on time or was only seen partially on the screen, and sometimes this is because of fraudulent behavior. When tactics like ad stacking and pixel stuffing are deployed by fraudsters, users will not actually see the ads that are “delivered.”
Domain spoofing can happen in several different ways, but essentially a fraudster sells what appears to be premium inventory but is actually space on low-quality websites. Often the placements are hit hard by bots, depleting budgets without conversions.
In addition to bots, domain spoofing can also mean that ads are shown with undesirable content that can degrade a brand, causing brand safety issues as well.
Digital ad fraud not only costs advertisers money, but it can also cause brand safety issues that damage a company’s reputation. When ads appear alongside content that could degrade consumer trust in a brand, the issues of ad fraud and brand safety intersect.
This type of placement is sometimes in violation of agreements between advertisers, media buyers, and publishers regarding the types of content the ads can be placed with.
Tools for Fighting Ad Fraud
There are several tools you can include in your ad tech ecosystem to help with ad fraud prevention. Here we’re highlighting a few of them along with a way that they add specialized expertise.
Ad Networks: Built-in Protections
Even if you’re not using an extra ad fraud tool, many ad networks and demand-side platforms have some quality controls in place to prevent fraudulent traffic. You should consider the reputation of any advertising marketplace when developing your media plan.
Google has a team of data scientists and uses both automated detection and manual review to protect the ad dollars of advertisers. The Trade Desk takes measures to ensure marketplace quality by adopting measures to reduce ad fraud.
Analytics: Leveraging Your Analytics Platforms to Detect Fraud
One of your best lines of defense will be your own analytics. This doesn’t have to be in Google Analytics, although it is one of the most common platforms used. Being a quick pattern recognizer can help you spot suspicious paid traffic on your website during regular checks.
Here are some things you can look for:
- Abnormally high ad engagement metrics, such as traffic levels and campaign click-through rates
- Poor on-site engagement metrics such as bounce rates
- An unusually high amount of paid traffic coming from one specific operating system or device, such as “Android 11” that doesn’t appear to be acting like a real user
- Poor conversion metrics (bots don’t buy!)
Build custom dashboards with Google Analytics data to make keeping track of these metrics easy for you. You can even create custom alerts to be notified of any significant changes that set off alarm bells for you.
“If it sounds too good to be true, it probably is,” applies when it comes to your campaign metrics. Before getting excited about abnormally high numbers, dig in to get a more complete picture of what’s going on.
Keep in mind that just because you don’t notice anything different in your metrics, that doesn’t mean that you’re not wasting some of your ad spend. Technology is making it easier for fake traffic activity on your site to look more like that of real users. This is why you still may want to check out other ad tech tools to help detect fraud.
Apps Flyer: Post-attribution App Download Protection
Apps Flyer offers a fraud protection product called Protect360 specifically aimed at mobile app advertising. What makes their product unique is a post-attribution layer of technology that is able to detect if fraudulent activity occurred during the download of an app.
It’s currently not always possible to detect all fraudulently-attributed mobile app downloads in real-time. However, AppsFlyer’s post-attribution reporting uncovers fraud that would have gone undetected by other attribution providers. Using the information from Apps Flyer’s report, advertisers are armed with what they need to request refunds for app downloads improperly attributed to advertisements before they even pay partners or publishers.
Cheq: Viewability in 3D
Wondering what you’re really getting from your CPM dollars? Make sure your ads appear in places that won’t negatively impact your brand and are actually viewable by the consumer. Cheq’s display and video ad verification platform offers advanced protection for brand safety and viewability.
This platform has the ability to track things like ad angle, brightness, and possible obstructions that would affect a person’s ability to see an ad. This especially comes in handy in 3D gaming where Cheq shines, offering the only viewability solution for these environments.
Integral Ad Science: 3-Pillar Approach
Integral Ad Science uses a 3-pillar approach to detecting and reporting ad fraud with its products. This includes rules-based pattern detection, AI and machine learning, and their threat lab.
The IAS Threat Lab adds a human touch with expert staff that detects and stops fraudulent activity. They even work with law enforcement and academic organizations to make strides in learning more about digital marketing fraud and identifying new and future threats.
One of the services offered through Integral Ad Science is a monthly invalid traffic (IVT) report. You can use this information to apply for refunds from the ad network you purchased ads from.
Being informed of invalid traffic is helpful, but you’ll still have to spend time chasing after refunds from ad networks, which can take time and isn’t always successful.
ClickCease: PPC Fraud
ClickCease uses technology to detect fraudulent traffic such as botnets and competitor clicks that drive up the cost of your PPC campaigns. Their platform makes it easy to block these sources and provides some pretty neat visualization tools so you can see how users are behaving on your site.
Another feature that stands out with ClickCease’s product is the ability to add custom rules to flag suspicious traffic. Sophisticated algorithms will catch some fraud, but if you have data from your site or industry on typical web traffic behavior, you can add those custom detection rules.
Location Sciences: Location Fraud
According to Location Sciences, “over 42% of all mobile ad spends include location data – but as much as 80% of location data may be inaccurate or of poor quality.” For this reason, they’ve built a product dedicated to the accuracy of location data.
They pride themselves in being an independent verifier of location data rather than being media sellers or data collectors. Although many mobile ad fraud detection products include location data, if location is particularly important to your digital campaigns, you might consider seeking out a specialty solution like Location Sciences.
Anura: Accurate Fraud Detection
Fraud detection isn’t perfect, and false negatives and positives lower the accuracy of data when it comes to identifying wasted ad impressions. Anura improves accuracy by focusing on metrics that are harder to exploit such as conversion and acquisition numbers.
Anura also gives you an extra option when evaluating the validity of traffic it flags. You can add IP addresses to a watchlist rather than straight to a blocklist while you let the platform gather more data on a traffic source to make sure you don’t block out legitimate traffic.
DoubleVerify: Thwarting CTV Fraud
While DoubleVerify’s anti-fraud solutions have a lot of safeguards built in, one of their most notable recent accomplishments involved uncovering a CTV ad fraud scam before a cent was even wasted. The ParrotTerra scheme was on track to steal up to $50 million from advertisers.
Since connected TV relies heavily on CPM as a metric, and that can be upwards of $20, this was a crucial catch. DoubleVerify prides its CTV ad fraud technology for its ability to scale and offer the same level of fraud detection as other platforms.
They also offer solutions for programmatic advertising, mobile advertising, and other platforms, backed by a lab of data scientists, analysts, and the cyber-fraud prevention community.
Building Your Ad Fraud Toolbox
Evaluate media buying and ad fraud choices just like you would any other marketing technology tool. Most importantly, you’ll want to consider the risks and rewards when choosing your ad fraud protection investment.
- Do you have a reason to believe your campaigns have been or are being significantly impacted by ad fraud?
- If your ad fraud rate is the typical average, are you throwing away hundreds of dollars or millions?
- Do you have the team to effectively take action on discoveries made through improved ad fraud detection?
If you’re using a media agency, they will be able to let you know what your options are. In fact, asking how an agency helps protect against ad fraud is a worthwhile topic of discussion.
Here at Merritt Group, we only work with reputable partners across all aspects of advertising. Learn how our performance marketing capabilities can help you make the most of your digital campaigns.