Ad Fraud, Click Fraud, Bot Traffic, Fake leads, Click Stacking, Pixel Stuffing/Spamming – Fraud in digital marketing can’t be ignored or dismissed as an industry-hazard. Digital fraud affects about 60% of all advertising and will cause advertisers to lose an estimated $19 billion in 2018 (Source: Juniper Research). This figure is estimated to reach $44 billion by 2022. With so much money at stake, it is crucial to identify and fight fraud.
To give you a context to the magnitude of this problem, consider the below statistics:
- 78% of marketers cite click fraud as their top concern (Adweek, 2016)
- 75% of desktop clicks on 300 x 600 ad units are fraudulent (Pixalate, 2017)
- 50% of all online ads are never seen by a human (Google, 2014)
- Only 8% of all impressions served have the opportunity to be seen by a real person (Marketing Daily, 2014)
Types of Digital Ad Fraud
So, everyone agrees that Ad Fraud is a big problem and needs to be stopped. However, before we fight it, we should first understand more about the enemy.
Click fraud happens when fake clicks are generated using bots on a user’s device without even displaying the ad to the user. It involves the practice of repeatedly clicking on an ad with the intention of draining revenue from the advertiser.
When multiple ads are placed on top of each other and only the top ad is visible, it is called Ad-staking. Ads on the bottom of the stack are never seen by anyone but impressions and clicks are counted against it.
Similar to Ad-Staking, pixel stuffing involves placing ads or video in tiny 1x1pixels. They are practically invisible, but when a user opens a webpage, the publisher gets credit for the display of the ad.
Currently, this form of fraud only works on android but experts believe this could become one of the dominant forms of mobile fraud. Click injection occurs when malicious apps listen to other app installs and trigger clicks before the install completes. This way they get to claim credit for an app install even though they were not responsible for it.
Widespread in developing countries, click farms involve hiring workers to click on digital ads. These kind of click farms are being used for generating high volumes of web traffic, likes & followers on social media, app installs and generally boosting online presence.
Bot traffic is similar to click farms but instead of manual actions, bots are automated scripts which run to simulate a particular behavior. According to 2018 Bad Bot Report by Distil Networks, about 21.8% of all internet traffic is malicious bots. This means roughly 1 of every 4 visitors to your website is a bad bot.
There are many more types of fraud like domain spoofing, incentivized traffic and misleading ads that fraudsters use to deceive advertisers about the source of traffic.
Detect and Protect
Although tools have been developed to identify fraudulent ad activity, the activity is becoming more sophisticated and difficult to detect. For example, advanced bots are able to perform human-like movements and clicks that can be hard to recognize.
So, does this mean there is nothing that can be done to fight fraud? Of course not. It is possible to detect fraud if you pay attention to a few metrics and take a few steps to limit the impact of fraud on your campaigns:
Identify Abnormal Activity
If you notice sudden and abrupt spike in your web traffic, very high bounce rates, low engagement rates, high CTR etc. as compared to your normal traffic behavior, this could be due to bot traffic. You can choose to use bot detection tools to watch for content-scraping and ad injection.
As an advertiser, you can and should demand better transparency from your publishers or affiliates. Request publishers to identify all third-party sources of traffic and if a publisher seems reluctant to identify his traffic sources, that is an indicator of possible malicious activity and something to look out for.
Keep your blacklists updated
As and when you identify a fraudulent source, update your list with the source. Ensure this list is kept current and is communicated to your partners whenever a campaign is rolled out.
Implement third-party fraud monitoring
As fraudulent practices continuously evolve, it is very difficult to identify all types of fraud and block them in real time. Implementing a third-party detection system will allow you to identify and block fake activity. Most ad-tech providers have an in-built fraud detection algorithms that help with this.
Unliche uses a mix of proprietary algorithms and 3rd party validators to monitor a combination of factors like clicks, IPs, Click-to-install time at run-time to raise a red flag whenever it detects potential fraudulent activity allowing you to take corrective actions immediately. It has a Fraud Index mechanism that classifies the clicks into a low, medium and high fraud index so that advertisers can identify even the IPs from where the fraud is originating.
Digital Ad fraud is like a game of whack-a-mole. Once a solution is found for one type of fraud, a new one pops up. As an ongoing and complex challenge, it can only be contained with a committed effort by all the parties involved – advertisers, publisher, ad-networks etc. Technology has a huge role to play in this and has to constantly evolve to fight this menace. Artificial intelligence needs be leveraged much more to combat this threat and here again all involved should share enough data so that comprehensive technologies can be developed.