There are various ways ad fraud can steal and damage digital advertising space. It can be in the form of click farms, automation bots, fake clicks, etc. To start with, let us first understand ad fraud.
What is Ad Fraud?
Ad fraud refers to any attempt to deceive online marketing networks for monetary gain. Scammers use various methods to mislead advertisers and ad networks in order to gain fraudulent money. One of the most common and frequently used ad scams is done by employing bots to commit ad fraud.
What is Digital Ad Fraud?
Ad fraud can be of different kinds, but the objective remains the same: earning money through scams. Ad fraud in the digital advertising industry happens through the stealing of your ad spend by redirecting fraudulent traffic to your ad campaign.
When a brand runs an online advertisement, it either directly or indirectly commits to paying the website hosting the advertisement for each time the ad gets clicked. But not all of these clicks, though, indicate a sincere interest that could lead to conversion. Scammers target this ad traffic to earn money. They redirect fraudulent traffic to your ad campaigns.
Any illegitimate web traffic associated with the placement of digital ads is considered digital ad fraud. This traffic has no possibility of conversion. It is effectively leveraging the advertisement to increase expenses for the underlying scam business.
Therefore, it is very important that you have quality traffic to your website and campaigns. To know more about this, read our blog on "Traffic Volume vs Traffic Quality: The Ultimate Growth Guide".
Ad fraud is nothing new; it was highly discussed during the early 2000s and has become smarter and trickier with the passing years.
Common Types of Ad Fraud
As I said, there are different kinds of ad fraud happening all around, and it is only reforming and increasing day by day. Here I have listed the most common ad frauds that are encountered in the digital advertising world.
Click Fraud
Click fraud is about the active targeting of pay-per-click advertisements and is usually executed by bots. Advertisers' money is wasted by bots that mimic real users clicking on those advertisements. Sometimes the bots may also mimic ad clicks to improve the ranks of a webpage, social media post, or particular advertising campaign.
This kind of digital ad fraud aims to fool an advertising platform into thinking that particular amounts of activity are coming from real users. This makes advertisers assume that an advertisement, webpage, or campaign is gaining more attention than it actually is. It is important to understand that most click fraud occurs on a massive scale, with numerous fraudulent clicks occurring simultaneously across multiple links or advertisements.
Installing Fake Apps
You might have seen that these days, a lot of mobile applications have advertisements along the bottom or sides of the screen. It follows that the frequent manual installation of programs by click farms and other shady advertisers is not surprising. After that, they engage with the advertisements in those apps by taking the required steps to record an ad click.
The largest click farms go so far as to automate this process; simulated mobile devices handle app installations and continuously generate clicks. This has a big effect on the advertiser's stats and gives the impression that in-app installs or ads are more active than they actually are. It's one of the main issues that advertising companies and app developers need to be aware of.
Click Injection
Click injection is about the installation of a free app that has a virus or a bot hidden in it. The installed free app may or may not function as advertised, but it does perform its primary operation of injecting a virus or bot.
The scammers keep an eye on the apps that use click injection fraud on their devices for "install broadcasts" on app stores. Once the app is active, they send a message with a registration for an ad click to an attribution provider. A marketing campaign is then notified of that click.
It basically involves taking over user apps in order to mimic fraudulent consumer behaviour, and is most commonly encountered in mobile apps, such as in-app ads and shopping displays. This kind of ad fraud is particularly dangerous for a lot of online or app-based games.
Cookie Stuffing
Cookie stuffing ad fraud happens when affiliate marketers employ cookies to track multiple affiliates. Cookies are little files used by web browsers to store text. They enable affiliate marketers to identify which affiliates are responsible for referring website visitors and customers to their companies. It is a crucial component of what makes affiliate marketing successful.
However, illegal activities through ad fraud can have an impact on affiliate marketing. A fraudster uses cookie stuffing to deliver several affiliate tracking cookies to the browser of a target website visitor. These cookies are all sent simultaneously.
When a website visitor visits the affiliate website, all of the tracking cookies ping at the same time. Even though the fraudster never actively advertised the website, the affiliate marketing program then awards them a lot of credit all at once.
Over time, cookie stuffing can cost affiliate marketers a lot of money on advertisements. In this instance, the fraudster takes credit for leads and sales.
Domain Spoofing
Domain spoofing is another widespread type of ad fraud in which harmful scammers play the role of legitimate publishers by offering hazardous and low-quality websites. This approach is intended to conceal the actual site from marketers and fool them into paying more for ad space. When the extra cash arrives from marketers via text-to-pay systems, bank transfers, and other means, the scammers pocket the extra money and send the rest to the real publisher account.
However, advertisers can detect domain spoofing by keeping an eye out for a number of indicators: the amount of traffic, measuring cost per mile (CPM), possibly no running ads in the domain space, and the domain user's email address.
Ad Injection
Ad injection is the practice of placing advertisements where they shouldn't be by using browser extensions, plug-ins, and malware. The scammers replace certain real ads with fraudulent advertisements on the websites. Even though the scammers have no control over the websites, they receive credit for every click that customers make on the misplaced advertisements.
Since it adds fake advertisements and websites without the site owner's consent, ad injection is one of the riskiest legal frauds. Both the publishers and advertisers are at a loss as their preferred ads are being substituted with fake ones, resulting in miscalculated revenue.
Viewer fraud
Viewer fraud is about creating automated bots to view video advertisements on platforms such as YouTube, social media, etc, thereby generating fake impressions for advertisers. Of course, those view counts are incorrect because the videos are watched by bots rather than users.
Viewer fraud turned out to be costly to advertisers, as all of that advertising money is wasted if the video ads aren't visible to real users. This increases only the view count with no chances of conversions.
Pixel stuffing
Pixel stuffing is a type of ad fraud when a fraudster creates a small 1x1 pixel space for an ad to appear. However, within that space, fraudsters can post hundreds of advertisements on a single webpage. When users view the small pixel region, the fraudster receives credit for ad impressions.
It's important to note that these one-pixel advertisements don't provide any outcomes because visitors don't notice them. This form of ad fraud only works with marketing programs that base their advertising budgets on impressions, which is one of the reasons why the CPM model is becoming less appealing.
Geo-Masking
Advertising campaigns with varying ad spend quantities for different locations may be impacted by geo-masking ad fraud. For example, a business may launch a marketing campaign that pays more for leads from the United States and less for prospects from other nations.
Fraudsters use geo-masking to conceal the geolocation of leads they produce for their advertisers. In order to make them appear more valuable than they actually are, they usually spoof IP addresses. Then they create an illegitimate bill and charge the advertisers.
Ad Stacking
The primary method of ad stacking is stacking several advertisements on top of one another in a single ad location. Therefore, when a user clicks on one advertisement, he inadvertently clicks on multiple ads that are layered beneath it in addition to the one that is now displayed.
How to Protect Your Brand from AD Fraud?
The following are the key strategies to protect your brand from AD fraud:
Use Verification Tools: It is advisable to collaborate with specialised security platforms such as IAS or Secutec's AdChain to instantly identify and stop fraudulent activities, including incorrect ad placement and non-human traffic (bots).
Make use of Transparency Standards: Look for sellers.json and SupplyChain objects to trace the ad inventory path, and use ads.txt to make sure your ads are only sold through authorised merchants.
Prioritise Performance Metrics: Turn attention to CPA campaigns, which measure success by significant actions (such as app installs) and not just clicks, which are easy to fake.
Set Pre-Bid Targeting into Practice: Before a bid is placed, use Demand-Side Platforms (DSPs) to implement pre-bid limits that stop advertisements from showing up in dangerous areas.
Conduct Frequent Audits: Keep an eye out for abrupt increases in engagement or low-quality traffic, which may be signs of fraud.
Wrapping Up
With the evolution of the digital marketing space, the compliance practices, fraudulent restriction activities, and brand safety standards are all getting reformed. Prevention has always been the best way out. Therefore, it is very crucial for both advertisers and publishers to be able to identify ad fraud before they attack.
The different types of ad fraud mentioned above will help to understand and identify the scams beforehand.
For brands, relying on outdated, passive security solutions is no longer an option. Marketers may safeguard their finances and brand reputation against smart automated threats by combining the latest innovations with stringent partner responsibility.
To drive the right kind of traffic to your ad campaigns and gain maximum revenue out of it, get connected to the experts of 3Mads to guide you best.