Is Ad Fraud Impacting Your Marketing Strategy?

As a business, there are certain things we can do to protect ourselves. From locks and combination codes on physical stores to backups of our website, we need to always think of the worst-case scenario even if we don’t like the consequences that would come with it.

Today, we’re here to introduce another topic that needs consideration in this day and age: ad fraud. As well as explaining what this is and the different types, you will also learn why it’s important for your business and how you can stay protected in the months and years ahead.

What’s Ad Fraud?

Just as the name suggests, this is a type of fraud seen within the advertising niche. Essentially, advertisers end up paying money on something that is fraudulent and will not yield the results expected. We’re going to look at examples in the next section, but it could be something as simple as fake traffic. Here, the advertiser pays an advertising platform for traffic to their website or social media channels only to actually get nothing in return.

Unfortunately, there are a number of problems that come with ad fraud. You spend money and waste a portion of your budget, you don’t get any results, and you inadvertently encourage fraudsters to carry on what they’re doing. The more service they get, the more incentive they have to trick even more advertisers.

Types of Ad Fraud

Search Ad Fraud — This all starts when the fraudsters launch a website and aim to boost traffic artificially with keyword stuffing. Very quickly, their position on search engine results pages improves. From here, innocent advertisers think they will get great exposure from buying ads on the fake website. They send their money, work hard on the ads, and then see very poor results because the traffic has been generated artificially. Thanks to keyword stuffing and other techniques, the advertiser has wasted their money.

Click Fraud — Next up, click fraud is a technique that people have been using for many years, but it still causes us problems. Essentially, these websites will sell traffic. As advertisers, we see traffic as a good thing and are accustomed to thinking that a certain percentage of this traffic will sign up for our newsletter or even purchase a product. Sadly, these services do one of two things:

• They hire cheap workers to generate a click farm so that you get the number of clicks expected.
• They used a so-called ‘hitbot’ to generate the fake traffic.

Of course, the problem click fraud causes is that we aren’t ever going to enjoy results. Since they’re mostly fake clicks, we don’t get growth and we don’t get brand exposure or a boost to our reputation.

Domain Spoofing — With this example, the domain where an ad will be placed is misrepresented. From the outside, it looks like a high-profile website that seems to be worth our time and effort. Publishers will often identify a domain in real-time bidding (RTB) advertising. Again, the website has been misrepresented and advertisers are fooled into spending money on marketing tactics that aren’t built to work.

Ad Stacking — As you’re starting to see, there are lots of examples of ad fraud, and this is why it is causing advertisers all sorts of problems. For a given spot, the publisher in this example will sell several ads. With every ad placed, people view the page and impressions are generated. The problem? The many different ads are actually stacked which means that only the top is visible.

Pixel Stuffing — For our last example in this guide, we want to talk about ads being placed within the page’s pixels. Technically speaking, the ads are on the page which means that a visit will lead to an impression. However, no visitor can actually see it so it will never generate a sale or future benefit for the company itself.

Impact of Ad Fraud

Is this a big problem for advertisers? Yes, research by WPP suggests that lost revenue is to reach $16.4 billion this year from fraudulent web traffic alone. As advertisers, we need to know how many people are seeing ads in order to judge performance and even plan our future campaigns. When these numbers are distorted, this affects our overall strategy. Of course, this isn’t to mention the frustration that comes with spending money for no results.

Elsewhere, we should also mention that buyers are impacted by keyword stuffing (domain spoofing), click fraud, and the other techniques. As time has gone on, customers and internet users have only been getting more frustrated with the invasive and irrelevant ads that fill their devices. Suddenly, they’re using ad blockers, and this is making everything even worse for advertisers.

Finally, we can’t forget the many honest and trustworthy digital publishers who are having their reputation tarnished by the actions of a few. Unfortunately, it seems that even premium publishers are losing customers because advertisers are growing more skeptical. If this continues, trust deteriorates, open communication falters, and the whole system could collapse.

Staying Protected from Ad Fraud

We’ve learned about the different types and why it’s still dangerous, but what can you do about the problem? First and foremost, we recommend open communication with media-buying agencies. Just because there are some people trying to ruin the reputation of this niche, don’t feel the need to blame or make assumptions. If you’re currently working with an agency, we recommend asking the following questions:

• When working with publishers, are they required to provide and identify all sources of third-party traffic?
• Do you use any third-party traffic validation tools? Which ones?
• When it comes to B2B targeting, what type of data do you prefer?
• Do you use blacklisting?
• Have you ever had breaches? Did you introduce additional security measures as a result of this problem?

Don’t forget, this is your budget and maybe even the future of your company on the line. Due to the rate at which ad fraud is growing, you shouldn’t feel bad for asking tough questions like this. In fact, most agencies are now used to receiving these questions and will do everything they can to ease your nerves and prove their positive track record.

Blockchain and Data

Is blockchain a viable solution to this problem? Although generally used in conversations regarding cryptocurrencies, the term actually describes the process of recording transactions. Once logged, they are individually sealed with a key code and this makes manipulation nearly impossible. This whole notion might seem attractive right now, especially if you’ve fallen victim to the fraudsters previously, but we don’t believe the technology is ready for B2B marketers just yet.

Are there any other solutions? Well, some are turning to data. For example, you may have heard the term ‘deterministic’ data. It’s a way to vet and verify sources for quality. In this field, it means marketers can differentiate genuine human beings from bots with their prospects. In addition to verification, deterministic data could also help to identify fraudulent and legitimate businesses, and this will be a great assistant in the digital advertising sphere.

Marketers Working Together

Often, it’s easy to play the blame game when a problem such as this arises. Should we be blaming the advertisers? Is it the demand of advertisers that is causing the issue? Should we be blaming the publishers? Are they not checking sources? No, the problem is one that belongs to the whole industry. Therefore, the best way to stamp it out is to work together and keep an open eye. Let’s not forget, ad fraud like click fraud and pixel stuffing is a problem that affects buyers, advertisers, and publishers; nobody wants this to continue.

In the years ahead, it seems ‘trust’ will be the buzzword in this industry. If ad fraud is to come to an end, it’s important for everybody to be transparent while working together, to report issues, and make the ecosystem a better place. When this happens, the fraudsters will stand out and will soon learn that there’s nothing to gain from trying to act fraudulently.

If you’re an advertiser and want to protect yourself from such problems, remember to vet any media-buying agencies with whom you work. Just by asking a few simple questions, you ensure that you’re in the best position moving forward. If you aren’t sure about a service or feel as though something might be off, just move on to an agency or marketing software that instills confidence and can offer open communication at every step of the process.

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