The many problems caused by Ad Fraud

Ad fraud is so common nowadays that it is easy to overlook the true scale of the problem. Because it is hard to identify and define, numbers vary considerably, from the World Federation of Advertisers’ estimate that up to 30% of all advertising could be fraudulent to studies by Dr Augustine Fou hinting at rates above 50% for programmatic ads.

The scale of the problem is huge and it is only getting worse, as direct costs to advertisers are expected to rise to $26bn in 2020, up from $23bn this year, according to cybersecurity company Cheq.

But why is it a problem to start with? At its most basic, ad fraud represents activity that inflates impressions and clicks for ads that are never seen by consumers, forcing brands to constantly increase their ad budgets, with no actual hope of reaching and subsequently converting customers. This situation disproportionately affects small firms, because they don’t have large budgets and have fewer resources available to combat ad fraud.

The problem is not limited to ghost clicks and impressions though. The Uber lawsuit about fake app installs by bots, which played a role in the company’s valuation for its IPO, shows that fraud can take many different forms and scammers will exploit any opportunity to make money from ads and promotional incentives. Another recent case uncovered by Buzzfeed involved using YouTube and LinkedIn to create pop-under ads that redirect traffic to make fake visits look legitimate.

One of the most infuriating aspects is that, in most cases, ad fraud is extremely hard to prevent and prosecute. Recent research calculates much of it now comes from China and goes un-checked. Meanwhile, in other jurisdictions like the US, ad fraud is not covered by specific legislation, meaning it must be prosecuted under broader crimes such as mail fraud or computer crime, making it harder to prove and resulting in few prosecutions.

So what can be done about it? Although it is a game of whack-a-mole, ad fraud can be mitigated through a range of measures. These include auditing ad exchange platforms (especially programmatic networks), implementing ad fraud anomaly detection systems or switching how campaigns are measured, moving from vanity metrics (such as impressions and clicks) to actionable ones (such as conversions or leads).

Last but not least, brands need to make use of their analytics tools and resources to identify potential fraud and take act to protect themselves. This involves understanding where visits to their websites are coming from, monitoring traffic patterns and using large data sets to notice anomalies with specific campaigns.

If you have any questions about how to mitigate the dangers of ad fraud and ensure your digital campaign budgets are not being wasted on false clicks and impressions, drop us an email and our digital team will be ready to help.