Ad fraud is back in the news again as the ad metric lawsuit against Facebook continues. Publishers say Facebook inflated video ad metrics, such as view time, by up to 900%, and then tried to hide to hide their mistake from customers (which Facebook denies).
Industry observers suggest that these inaccurate figures led to advertisers and media outlets over-investing in the 'Pivot to Video,' believing the potential for reaching consumers was far higher than the reality.
Facebook has now changed its practices to avoid this happening again, but it's just a drop in the ocean: experts estimate that one-third of funds spent on online advertising ends up in the hands of fraudsters.
Any time an individual or website takes an action with the aim of receiving commissions for an advertisement that hasn't been seen by a real prospect, it's ad fraud.
These actions chip away at your revenue, damage your brand, and reduce the accuracy and usefulness of the metrics you are tracking; this inaccurate data leads to inaccurate decision-making, which increases the expense even further.
5 Types of Ad Fraud You Should Know About
Fraudsters have multiple different strategies for taking your advertising spend; here are five of the most common:
Bots are computer programs that are programmed to repeat a specific action. In the case of ad fraud, these bots are programmed to view online ads and click on them, with the intention of tricking an advertiser into believing a real person has clicked on that ad.
These bots are growing increasingly sophisticated: completing forms, viewing videos, and browsing websites as if they were a human.
And they don't just cost you the odd click or two: fraudsters deploy thousands of them, and if they can they'll use your retargeting campaigns to their advantage, charging you again and again.
Click farms are the human equivalent of bots; picture a sweatshop for ad fraud and you wouldn't be far from the truth.
These clicks come from real humans employed for low wages (normally in third-world countries) with the sole purpose of clicking ads to collect revenue fraudulently.
Although these clicks come from real people, they might as well be bots. There is no intention to purchase and no benefit to your brand.
Ad injection is when a piece of software, often a browser add-on, causes a user's browser to display other ad creatives over the top of your own, so that they don't view yours.
The main objective is to advertise pay-per-install software products for profit, rather than to sabotage or profit from your ad campaign, but the overall effect is much the same.
As advertisers and media companies pivot to video, it's no surprise that fraudsters have done the same.
Most video fraud involves either bot traffic or click farms, with the same intention of claiming commissions where none are due.
For most publishers, video fraud is where they are losing the most money because the CPM is higher than for other forms of digital advertising.
Domain spoofers sell advertising space on websites by making them appear as if they are a different website – one that is larger and more trustworthy.
Now only does this reduce the effectiveness of the ad (it isn't being seen by the audience you think it is) but it may also place your brand alongside other less reputable advertisements that may damage your image.
How to Combat Ad Fraud
Many businesses don't realize how big a problem ad fraud is. The damage it does makes investing in the tools, personnel, and resources you need to combat it more than worth the investment.
We recommend using one or more of the following strategies:
Work With Ad Verification Providers
Ad verification companies provide specialist services that help spot and prevent ad fraud directed at your digital campaigns. These services filter out fraudulent impressions and clicks so that you're not charged for them.
Study Your Analytics and Key KPIs
Less sophisticated fraud is often easy to spot using your analytics. For example, unusually high volumes of traffic from a country with low wages is indicative of a click farm campaign. You may also notice ad fraud because you'll see significant deviations in metrics from what you'd expect.
Run Campaigns With Fewer Partners
Carefully vet every publisher you work with and concentrate your ad spend on a few carefully chosen partners. Consider using Pixalate's Global Seller Trust Index to help you choose from the best options.
Follow Industry Guidelines
Organizations such as the Internet Advertising Bureau (IAB) have been set up to combat fraud through initiatives such as ads.txt which is a tool to help prevent domain spoofing.
As long as there is money to be made, fraudsters will continue to use ad fraud to steal ad spend.
Investing time and resources in protecting your advertising campaigns is essential if you want to stop fraudsters and ensure that the data you are tracking and using to make important advertising decisions is accurate.