What is ad fraud and why is it dangerous for your marketing campaign?
As a marketer or a business owner, you most probably wish to spend your advertising budget in the most efficient way. However, statistics that you see in your ad accounts do not always present the reality. If you haven't yet heard about ad fraud, stay with us to learn how to protect your campaigns from malicious attempts.
What is ad fraud?
The 2023 trends will be surely dominated by four factors:
To put it simply, ad fraud means getting financial gain from performing fraudulent activities around digital advertisements.
In case you’re not yet aware, not every activity around your ads is performed by humans. They can be clicked by visitors who are truly interested in your offer, indeed. However, in the era of more and more advanced bots, you can never be sure whether the numbers you see in your ad manager were real people.
This means that the number of ad views or clicks is not necessarily true. Some researchers estimate that even 40% of online traffic is fake traffic - and this is what advertisers pay for, and what, obviously, doesn’t bring them any sales or tangible results.
Ad fraud can be performed via both bots and humans.
- Bots are commonly used for producing fake clicks to use up the budget. They are programmed to imitate real users, which makes it difficult to detect them and distinguish them from human traffic.
- Humans can participate in ad fraud by working in click farms (teams of low-paid workers whose job is clicking on ads or links), or in a less sophisticated manner - they can be just your competitors spending their free time clicking on your ads to waste your budget.
It is already estimated that the total cost of ad fraud will reach$44 billion by the end of 2022, and 45% of total digital advertisement spend - and these numbers are expected to grow. This means that ad fraud is already a multi-billion dollar industry that is a serious threat to marketers and businesses that plan to benefit from digital advertising.
Preventing ad fraud is our mission at Travatar, and we support publishers by providing them with analytical tools that sufficiently detect fake traffic and activities. This is how we protect marketing budgets from getting drained, and increase the efficiency of digital advertising.
Types of ad fraud
There are a number of methods of performing ad fraud, with the majority of them including bots. The most popular are:
- Botnet - the way of using bots for generating fake traffic and fake visits on websites displaying ads. This method is used mostly for ads with a pay-per-view model. The main goal is to artificially improve the performance of social media posts, webpages, or other types of content to distort the statistics.
- Click fraud - the most common type of ad fraud. It is applied in pay-per-click campaigns, and its goal is to waste the advertising budget by clicking on them with no intention to purchase.
- Hidden ads - displaying ads in a way that they are not visible to users. This collects low-quality traffic and irrelevant clicks, which leads to higher spending.
- Click hijacking - the method of redirecting clicks from one ad to another (also called “stealing” clicks)
- Fake app installs - as ads are frequently displayed in the applications, click farms workers install apps multiple times to click on the ads. The other version of fraud including apps is encouraging users to install a simple, free-of-charge app that may even perform its basic functionalities, but the primary purpose of its existence is collecting clicks.
- Domain spoofing - this method involves preparing fake websites that resemble original websites and look legitimate and well-ranked in search engines. Then, scammers encourage marketers to invest in premium advertisements on their platforms.
- Ad injection or ad stacking - fraudulent ads that are displayed on the website in a way that replaces the website’s existing ads, or appears next to them to confuse the user. It is typically implemented through browser extensions and plug-ins. Ad stacking specifically means placing one ad over another, so the scammer can collect revenue multiple times from one click.
How does ad fraud affect advertisers?
Marketers may spend long hours trying to find out why their advertisements don’t work, why they are so expensive, or why there are no purchases even though the traffic and number of clicks look more than fine. They may put even more effort into improving the copy and communication, creating new visuals... but in the end, it simply turns out that most of the traffic was fake.
In fact, due to ad fraud, the clicks tracked in their ad manager or Google Analytics created a fake impression that there really was a correlation between clicks and purchases. This resulted in wasting even more resources on attempts to improve and optimize the campaign. At Travatar, we observe it frequently when we start cooperation with the client who reached out to us after draining their budget.
This is why it’s so dangerous not to prevent ad fraud. Due to the fraudulent activity of bots, a significant part of your budget can be consumed with no results in sales or brand awareness.
But wasting the marketing budget is not the only consequence of ad fraud. Another result is distorting ad statistics with artificially boosted numbers due to fake clicks and traffic. This makes marketers unable to interpret data correctly and leads them to wrong conclusions that result in inefficient actions in the campaign optimization process. This can cause severe consequences for the overall company’s advertising strategy.
The other result of ad fraud is encouraging unethical behavior in the advertising industry. Awareness about ad fraud can make advertising agencies reluctant to admit that a significant number of clicks or views in the client’s campaign were fake. Such an attitude makes the client pay for the outstanding numbers with no clue that they will never lead them toward sufficient sales results.
To sum it up shortly, the marketing-related consequences of ad fraud are:
- increased advertising costs
- lowered conversion rates
- distorted statistics
- lowered UI/UX of the websites
- brand erosion
- spreading bad practices in the digital advertising industry and loss of reputation of marketing agencies.
How to detect and prevent ad fraud?
For the reasons stated above, fighting against ad fraud has become a priority for many marketers, who are now in urgent need of controlling whether their ad budget goes to real customers or just irrelevant traffic.
Unfortunately, ad fraud might be difficult to detect. Methods used by scammers are more and more advanced and sophisticated, and this trend will surely not reverse in the following years, as we observe the digital advertising market blooming. However, there are a few ways of diminishing the risk of ad fraud in marketing campaigns:
There are a few ways of diminishing the risk of ad fraud in your campaigns:
- user-behavior monitoring, for example, with screen recording software (e.g. Hotjar)
- using click-tracking software to track unique clicks and compare them with total clicks to detect what percentage of them are not unique (probably fraudulent)
- using software blocking malicious and suspicious activity on the website
- differentiating advertising spendings by dividing them between different websites to mitigate the risk of spending all budget on fraud-affected pages.
However, all the activities above require time and effort, and installing dozens of different programs is not the most efficient solution. The best way to effectively track ad fraud is using one, complex software that would automate the entire process and provide you with reliable, fraud-free data. Such software, with Travatar as an example, is equipped with proven and efficient fraud detection tools that will secure your advertising budget.
- automatically analyzes different types of data, such as traffic IP, source, behavior on the website, actions performed on the page, and more
- generates reports picturing ad fraud and real users-related data
- delivers high-quality, ready-to-analyze data for further analysis that you will not obtain with conventional tools (such as Google Analytics)
- helps to monitor all aspects of advertisement data safety.
Reliable data reports generated by an independent tool not related to any advertising platform can lead to significant savings and increased efficiency of marketing campaigns.
If you want to learn more about ad fraud protection, feel free to contact us. We willadvise you with the best solutions, and provide you with configurated tools that will help you to eliminate fraud in your campaigns.
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