In 2022, ad fraud cost businesses worldwide $120 billion, and as cybercriminals continue to fine-tune their scams, the cost is likely to only increase.
When you pay for ad spend, you expect your ads to be seen and clicked on by real users. But how do you know these clicks are real and aren’t just a product of fraud?
Well, the good news is you can easily detect and prevent online fraud with the right tools and strategy.
This article explores everything you need to know about the common types of ad fraud in order to help you prevent it and avoid paying for non-human traffic.
What is ad fraud?
Ad fraud aims to make money by sending traffic to a website or ad and getting paid by the publisher for fake ad impressions, clicks, and installs. Digital ad fraud occurs when someone attempts to trick advertising platforms into thinking that fake activity on an ad or platform is coming from real users.
Digital advertising has become so widespread that the average person is now exposed to 6,000 to 10,000 ads every single day. With ad budgets so high and so many ad networks to choose from, there are plenty of vulnerabilities for fraudsters to expose.
Types of ad fraud
There are a lot of different types of ad fraud digital advertisers need to be aware of. Some of the most common types of ad fraud costing businesses the most money in 2023 include:
Click fraud is a type of ad fraud targeting pay-per-click (PPC) ads. Click fraud drives fake clicks to the ad, which forces advertisers to pay for clicks that didn’t come from real users.
Fraudsters commonly execute this type of ad fraud using bots programmed to spoof human users and generate fake clicks automatically.
Along with botnets and bot traffic, some fraudsters will engage in click fraud using click farms — large groups of low-paid workers hired to click on ads.
With domain spoofing, ad fraud perpetrators spoof or impersonate a high-value website and then sell display ads on the website they’ve spoofed.
Advertisers think they’re purchasing ad placements on a well-known and high-traffic website when they’re actually paying for ads on a low-authority site merely spoofing the website they thought they were working with.
With cookie stuffing, fraudsters insert cookies from other websites in order to disguise traffic sources and make it look like the traffic came from a different website than its actual source. They do this in order to manipulate the traffic’s attribution so that the website owner pays the fraudster instead of the publisher who actually sent the traffic to their website.
Click injection is a type of mobile ad fraud targeting Android devices. When the device’s user downloads a new app, the fraudsters trigger a click that allows them to take credit for the install. This means that the fraudsters take credit for the click and install rather than the publisher who actually directed the user to the new app.
Pixel stuffing involves cramming advertisements into tiny spaces on a screen — often spaces as small as 1×1 pixels. The ads are technically present on the website and generate impressions, meaning that you’ll end up paying for them just like they are real ads.
But with pixel stuffing, the ads are made so small that they are virtually invisible and won’t actually deliver any value for your company.
Like pixel stuffing, ad stacking is another method that fraudsters use to “hide” advertisements on a website. Ad stacking entails layering multiple ads on top of one another so that the top ad is the only one actually visible to website visitors. Once again, these ads generate real impressions you’re required to pay for, but no one is actually seeing them.
Ad injection occurs when fraudsters insert ads on apps and web pages without the knowledge or consent of whoever owns the platform where they’re published. Typically, they design these fraudulent ads to deliver malware to users when clicked on.
The ability to target ads to specific demographics based on their location is a powerful feature of online ad campaigns.
With geo masking, fraudsters send false location data and cause the ad to display outside its target demographic. This means that advertisers end up paying to display their ads to large numbers of users they never intended to target.
The consequences of ad fraud
If it’s not prevented, ad fraud has several costly consequences for advertisers launching ad campaigns and the publishers who are displaying those ads.
Some of the most impactful consequences of ad fraud include:
Inaccurate performance metrics
Digital advertisers use performance metrics from their campaigns to test and optimize different ads and advertising strategies. When these metrics are thrown off and made invalid due to ad fraud, they no longer offer any value, and the inaccurate performance metrics that ad fraud creates can cause advertisers to make faulty decisions based on this bad data.
The most obvious consequence of ad fraud is direct financial loss. When you’re paying for fake clicks or fraudulent traffic, you’re draining your company’s advertising budget and not receiving any value in return. An ad fraudster’s financial gain is always some other company’s financial loss.
Damage to brand reputation
There are several ways that ad fraud can damage a company’s brand reputation. For one, it commonly causes the company’s advertising efforts to underperform, making it look like the company is wasting resources without generating results. It can also harm the user experience on your website and erode consumer trust.
Loss of consumer trust
Whether it’s clicking on a fraudulent ad that infects their computer with malware, discovering that most of the engagement of a brand’s social posts is fake, or discovering a brand’s ads on irrelevant/low-quality websites, there are several ways that ad fraud can cause a consumer to lose faith in a brand.
Tips for ad fraud prevention
Ad fraud is a costly problem for advertisers and publishers alike, but there are ways to mitigate it.
Below are our top tips for preventing ad fraud and all the unwanted consequences it creates.
Verify traffic sources
Before you partner with a publisher or ad network, it’s important to verify their reputation and ensure they follow industry best practices. Do your due diligence to confirm the quality and legitimacy of a publisher’s traffic sources, and make sure they are following practices designed to mitigate the potential for ad fraud.
Implement ad fraud detection tools
One of the easiest and most effective ways to fight ad fraud is to use ad fraud detection tools. These tools use machine learning algorithms and data analysis to pinpoint and filter out fraudulent activities in your digital marketing campaigns. They can automatically detect anomalies, suspicious patterns, and non-human traffic.
Implementing ad fraud detection tools won’t directly stop ad fraud from happening, but they can provide you with valuable insights you can use to optimize your other ad fraud prevention efforts.
Set clear campaign objectives
Defining clear and measurable campaign objectives allows you to detect inconsistencies and anomalies in campaign performance. When you know exactly how you expect an ad or a campaign to perform, it’ll be a lot easier to pinpoint anomalies that could be signs of ad fraud and take appropriate action.
Use whitelists and blacklists
Whitelists and blacklists help prevent ad fraud by controlling where your online ads appear. Whitelists include trusted publishers and websites that have been thoroughly vetted and are confirmed to follow practices that mitigate ad fraud.
Blacklists, meanwhile, contain publishers and websites that are known for fraudulent activity and improper practices. Restricting where you place your ads so you prioritize whitelisted websites and block blacklisted websites can go a long way toward reducing the likelihood of ad fraud.
Monitor campaign performance
Once you set objectives and expectations for your ad campaign, it’s important to continually monitor the campaign’s performance to make sure it is performing as expected. Tracking metrics such as click-through rate (CTR), conversion rates, and engagement metrics will enable you to identify unusual spikes and patterns that could indicate fraudulent activities.
Implement ad verification tools
One of the most effective ways to prevent ad fraud is to leverage ad verification tools such as those offered by Digital Element.
With Digital Element’s innovative IP targeting solution NetAcuity, advertisers can laser target their ad campaigns while automatically verifying ad viewability, brand safety, and placement accuracy. By providing unprecedented campaign transparency and automated verifications, Digital Element empowers brands to eliminate the potential for ad fraud.
Unmatched targeting and campaign transparency is one reason why AppsFlyer — the global leader in mobile attribution and marketing analytics — chose Digital Element to improve the accuracy and reliability of their geographic data.
By using IP intelligence data from NetAcuity, AppsFlyer has improved the quality of the data they provide to their clients while also actively preventing ad fraud.
Safeguard your advertising efforts with Digital Element
Ad fraud is a costly problem for many companies. But the right ad verification tools can keep it from being prevalent.
To verify that real users genuinely interested in your brand are seeing and clicking on your ads, check out Digital Element.
Our tools can help safeguard your advertising efforts against all forms of ad fraud and give you peace of mind when you’re paying for online advertising.