Digital Marketing & eCommerce Innovation Blog

Digital Marketing & eCommerce Innovation Blog

Ad Fraud: What Is It?

Digital ad spend is increasing year on year, with 2017 forecast to see 29% of global ad spend dedicated to digital media. Although there have been problems with how digital advertising is regulated, most notably with regard to ad blocking, the main concern has been how to create campaigns that are relevant to the customer.

However, marketers looking to utilise online advertising are now faced with an auxiliary threat in the shape of ad fraud. The World Federation of Advertisers has described ad fraud as having the potential to become the second most profitable form of organised crime in the world within the next decade, coming in second only to cocaine and opiate trafficking. The financial statistics support this averment as ad fraud is set to cost advertisers $7.2 billion in 2016 alone, a rise of almost $1 billion from the previous year.

What Is Ad Fraud?

Simply put, ad fraud defines any activity that duplicitously sells ad space or generates impressions on a particular advert. Integral Ad Science recently released a report stating that 7.1% of all digital ad impressions are fraudulent. There are many ways in which ad fraud can be perpetrated, and here are a few of the most prevalent examples of ad fraud.

Impression Ad Fraud

Also called pixel stuffing or CPM fraud, this practice involves placing multiple ads within the same ad space on a web page. This means that despite the fact that an ad is present on a page and any impressions are recorded, the user has no chance of seeing the ad as it exists underneath a stack of other ads.

A similar practice, known as ad stacking, involves placing ads on a page in incredibly small pixels. This renders the ad impossible to see but still contributes towards the total impressions. Impression ad fraud is one of the most common forms of ad fraud online and can take place within videos as well as in ad space on text-based web pages.

More sophisticated versions of ad fraud also use bots to crawl websites and mimic user behaviour. If a pattern similar to pre-purchase behaviour is spotted, an ad campaign may then be triggered even though the behaviour was that of a bot. Similarly, traffic fraud also helps generate false impressions by purchasing fake traffic to “visit” a web page containing digital ads.

Lead Fraud

This form of ad fraud goes the extra step further from impressions fraud and not only effectuates false impressions but fills in forms on a website, giving the impressions that leads are being generated. The forms can be filled out either by people working in click farms or by bots. The latter of these raises a real cause for concern, as bots are now even capable of mimicking the movement of a cursor.

Search Ad Fraud

This form of ad fraud looks to take advantage of keywords with particularly high cost per action rates. The websites are filled with these keywords in order to create search ads. Automated bidding will then place adverts against the keywords and purchase ad space on the fraudulent websites. Bots are then used to click on the adverts and trick the advertiser into believing that the ad has a good click through rate.

This scheme can lead to the fraudulent website being affected in terms of where it appears on search pages, with these sanctions ranging from position penalties to permanent bans. Based on the SEO technique of keyword stuffing, whereby key search terms are repeatedly used on a  web page, search ad fraud is dangerous as, dependent on the efficacy of the bots, it can be very hard to detect.

Affiliate Ad Fraud

To promote certain products, companies will often look to reward affiliate advertisers by giving a commission to those who act as a referrer to their site or products. Affiliate ad fraud works by using bots to direct traffic to the sites or by attributing fraudulent cookies to a user. For this reason, the practice of affiliate ad fraud is sometimes called cookie stuffing.

When the user completes the action which will incur a commission, such as making a purchase or signing up to an emailing list, the fake cookies override the real cookies. This causes the referral path to be attributed to the fraudulent source which in turn sees the commission given to the wrong party.

Conclusion

Understanding what ad fraud is and how it is carried out is the first step in taking the right course of action to eradicate it from online advertising. However, what is clear is that the amount of ad fraud committed online is set to increase in the coming years and the most pressing issue would appear to be formulating software that can reliably detect and identify ad fraudsters.

What is clear is that digital marketers and advertisers need to be aware of the threat posed by ad fraud to the metrics informing their campaign choices. Whilst ad fraud may never be entirely eradicated from digital media, remaining wary will help minimise its reach and effects.

Have you been the victim of ad fraud in the past? Which form do you feel is the biggest threat to digital advertising? Get in touch with us on social media to tell us your thoughts.

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