Advertisers spent $209.7 billion on digital mediums in 2022, marking a 10.8% growth from the previous year. Online advertising continues to take up a large portion of marketing budgets with the promise of better audience targeting, improved data insights, and higher returns for every dollar spent. But it is not without drawbacks.
Ad fraud has become a widespread threat to both advertisers and ad publishers in recent years. According to one report, as much as 21% of ad spend is wasted on such scams. The repercussions are multi-faceted—advertisers waste their budgets, while publishers risk losing potential revenue and goodwill.
So, whether you are a marketer or someone earning income by publishing ads, understanding prevalent ad scams and preventative steps is important. In this article, we will get you up to speed on everything you need to know.
Common Types of Ad Fraud
Malicious actors and fraudulent ad publishers can initiate a variety of ad scams to defraud organizations. The most frequently reported schemes include the following:
● Bot-based traffic
Publishers could create websites with inferior-quality or copied content and deploy automated programs or bots to generate traffic. Mistaking it for legitimate site traffic, advertisers could place ads on these sites, ultimately gaining zero tangible results.
● Website spoofing
Spoofing involves creating websites that are identical to those of large-scale authentic ad publishers. These scams rob money from marketers by misleading them while also stealing revenue-generating opportunities from publishers.
● Ad stacking
This is when publishers stack several ads on top of each other. While the user will only see one of them, the publisher will get paid for all stacked ads.
● Geo masking
Brands often need to target audiences from specific geographies to ensure optimum results for their campaigns. Some geo-locations are more expensive than others and may require more work to attract footfall.
With geo-masking techniques, scammers could hide the exact place of origin of traffic and charge higher for traffic generated from low-value locations.
● Pixel stuffing
This is another technique that allows fraudsters to charge multiple advertisers for ads that are never seen by site visitors. Pixel stuffing techniques can make advertisements invisible so publishers can set up several ads on a page, bypassing space limitations and monetizing all of them.
● Cookie stuffing
Cookies are an essential tool for businesses to track user engagement. By manipulating them, fraudsters could mislead companies with inaccurate data, which inevitably results in wasted advertising spend.
With cookie stuffing, scammers can, for example, insert cookies from an affiliate website when you are visiting an entirely unrelated site. When you purchase a product one day from the qualifying affiliate site, these fraudulent actors could claim commissions, although your purchasing decision was not influenced by them.
● Click spamming
Dishonest publishers could also initiate clicks without your knowledge when you visit a website or use an app. This allows them to monetize advertisements by showing fake engagement.
Preventing Ad Fraud: What You Need to Know
A proactive approach to identifying and preventing ad scams will help advertisers and publishers to avoid fraudsters and their nefarious schemes.
Here are the most effective steps for you to adopt:
● Stay updated
Keeping abreast of the latest ad fraud trends, techniques, and risks is crucial for you and your team to remain alert to potential dangers. When you are aware of the possible threats, you can be better prepared to respond to them effectively.
● Track data
Data insights allow you to identify outliers that may signal something is amiss. For example, when you know the usual engagement levels for a campaign, it is easier to notice a sudden spike in traffic, click-through rates, or some other engagement measurement, which could be the result of bot-led manipulation or similar fraudulent activity.
● Reassess success metrics
Clicks, for example, are easy to recreate. So, when you rely on such measurements to assess a campaign’s success, you could be misled by distorted results.
Conversion rates are a better metric to use for determining campaign performance. If conversions are low, yet engagement is high, it could be a sign of low-value traffic and fraudulent ad techniques.
● Research online ad partners
Getting to know who you are interacting with online is a must when partnering with individuals and organizations you have not worked with before. This is especially important if you are unfamiliar with what they are doing.
Use PhoneHistory to verify those who reach out online (the internet is full of scammers), read reviews, check referrals, go through their work terms, and use your best judgment to assess their motives. Also, check their websites for signs of spoofing. These can include URL mismatches and poor-quality content.
● Have an ads.txt file
As an ad publisher, preventing fraudsters from using your company name to defraud advertisers is critical for keeping your reputation intact and safeguarding customer trust. Having an ads.txt file detailing the ad networks, sell-side platforms (SSPs), and exchanges authorized to sell ads on your behalf is essential for this.
In addition, ensure that your ad partners maintain a valid sellers.json file clarifying where the ad inventory originates from.
● Test and verify
When you are paying a publisher to display your ads, you need to ensure that they are honoring the agreed terms of advertising.
Visit their website or app from time to time and assess how your ads are displayed. If your ad criteria cover a specific audience group, get several people from the chosen customer profile to review the ads on your behalf. Any issues should be immediately escalated to the publisher.
Regular checks such as this will help you avoid ad stacking, pixel stuffing, geo masking, and similar ad fraud.
In Summary
Ad fraud costs organizations billions of dollars each year. It impacts advertisers and genuine publishers alike, preventing them from harnessing the real benefits of digital advertising.
Technological advances have made these scams highly diverse and challenging to predict. So, building awareness and taking protective measures is critical to avoid their potential threats.
At the same time, manage your expectations and be realistic about the outcomes you can achieve from your campaigns. Be cautious of any publisher who promises results that are too good to be real.
