The Rise of Digital Ad Fraud

Matthew Smokowski

Lead PPC Strategist

It’s your worst nightmare. Your hard-earned dollars that are spent on an ad campaign are wasted. Rather than going to prospects, your budget is drained by hackers. While you may think that we’re past the days of click fraud, this isn’t true. Digital ad fraud is real, and it happens to marketers every day.

A recent study from ANA tracked online ad purchases from 36 major brands in the U.S. and found that 11 percent of online display ads and 23 percent of video ads aren’t shown to real people. It’s estimated that nearly $6 billion was wasted globally in 2015 to ad fraud. This means that the chances of being affected by ad fraud are somewhat high.

Does this mean that you have to throw in the towel and assume that some of your ad dollars will inevitably be wasted? No. While you can’t control everything that goes on, there are steps you can take to protect your budget.

In this article, we are going to cover what digital ad fraud is, how hackers are getting away with it and how to prevent it from happening to you.

Let’s begin.

What is Digital Ad Fraud?

The purpose of paying for online marketing is to generate quality leads for your business. When you pay for marketing, you expect that the ads that are clicked on are coming from real humans. Not just any humans, but those who are likely to become your customers one day. When you run analytics, however, it’s very possible that some of the clicks may not come from humans at all. They may come from bots.

Bots are computer programs that copy real users. Hackers build these bots with the intent of taking advantage of the paid advertising system. While they’re busy building these bots, they are stealing billions of dollars from agencies and businesses.

So who are these people? They aren’t 20-something-year-olds who are trying to make some extra cash on the side. Instead, they are organized criminals who know the full extent of what they are doing.

The cybercriminals start by building fake websites to host ads and then sell ad space to businesses, agencies and ad exchanges. After, they send out robots to make false impressions on the ads. It’s a dangerous game that some businesses fall victim to. That’s why if you plan to spend money on an advertising campaign, you need to know the risks and how to minimize them.

What are the Types of Ad Fraud?

There are two main types of digital ad fraud: impression fraud and click fraud. It’s possible to be a victim of one or both. Either way, you are wasting money.

Let’s look at these types of ad fraud in more detail.

Impression Fraud

Impressions measure the number of times an ad is displayed. Display ads and video ads are most commonly measured by impressions. When these ads are created, businesses pay a third-party website to publish them, and then they pay for every 1,000 times the ad is seen. The purpose of these ads is to get the brand seen by others.

Unfortunately, hackers have found a way to take advantage of the system. Rather than showing the ads on a real website to real customers, they are shown to bots. This means that the business ends up paying money to have their ads shown to no one.

How are hackers getting away with this? Why would anyone want to sell ads to a fake website? Since the process of buying and placing online ads is mostly automated, there’s no way to check for the legitimacy of a website.

Click Fraud

Clicks measure the number of times that your ad is clicked on. The types of ads that are measured this way include search-based ads and some mobile search ads. Search companies generally use auctions to sell the ad space based on users’ search queries. The most popular search queries are the most expensive.

When a prospect searches for one of the keywords, the search company runs an auction among the businesses that have bidded on the keywords. The ones that bid the highest are the “winners.” These companies then have their ads shown first. The search engines charge for each click the ad receives.

As with impression fraud, hackers have found a way to take advantage of the system. They create bots that make fake “mouse” movements and click on the ads. Because these bots are performing human-like motions, it’s almost impossible to detect them. Also, hackers target big PPC spenders, including insurance companies and retailers.

Yes, digital ad fraud is a dirty, dirty game.

What are Marketers Doing About It?

There are some tools available to help detect fraud. For example, if it’s determined that a website is indeed fake, that website can be blacklisted. This way, when businesses do put ads on an ad exchange, the filters will pass over blacklisted sites.

However, this in itself isn’t enough to minimize digital fraud. As you can imagine, it doesn’t take long for cyber criminals to realize that their website isn’t making money. When they figure it out, they’ll shut down the site and create a new one in its place.

The true solution relies in marketers and their ability to spot fraud. While it’s wonderful to have automated systems in place, marketers shouldn’t rely on it completely. Detailed reports on ad spending should be requested from your media agency, and you should verify these numbers with your own technologies and resources. Don’t be afraid to question numbers that don’t add up.

Another longer term solution is to engage heavily with inbound marketing tactics. Any PPC link is essentially vulnerable to click fraud. Inbound marketing forces you to question who interacted with your ad. Not just “human” or “bot” but what type of human? Where were they in the marketing funnel? What step did they take next?

When you begin to focus more on the above metrics as opposed to the number of ads shown and clicked on, you will see that there is far more room for human interaction and far less room for bots.

 

About the Author: Matthew Smokowski

Matt is a PPC Strategist for SEMGeeks. He has a background in English and Creative writing and experience managing PPC campaigns for popular local businesses. He excels at creating creative ad copy, landing page content, and progressive PPC strategy. Matt has become the resident Amazon and Instagram Marketing Expert.

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