Understanding Ad Fraud PT1– what is it?
Did you know that 25% of all paid traffic is estimated to be fraudulent or that programmatic campaigns - where automated technology buys and sells advertising spaces online - have fraud rates of around 50%? As technology continues to evolve, fraudsters are finding innovative and deceptive ways to scam online users with ad fraud.
What is Ad Fraud?
Ad fraud refers to various practices where humans or automated technology manipulate the delivery and performance of digital advertisements. Fraudsters prioritise the number of ads in a digital space over the quality of content on a website with the aim of generating revenue through false clicks, impressions, views, and more.
In most cases, financial gain is the primary goal of advertising fraud. However, there are several reasons that you may be targeted:
- Competitive advantage
- Sabotage
- Monetary incentives
- Collecting user data
Advertising fraud doesn’t just target the individual ad; the space that the advertisement is placed on can also be fraudulent. It’s crucial that you are aware of how ad fraud can damage your business, not just in monetary value but in reputation, too.
In part one of our two-part articles, our digital marketing experts delve into examples of ad fraud to help you identify vulnerabilities in your ad strategy to enhance your campaign’s effectiveness.
Click Fraud
ClickCease by CHEQ states that “Every company using PPC networks like Google Ads or Bing Ads is either vulnerable to click fraud or has been a victim of click fraud”. Many times, we don’t realise that our ad campaign has fallen victim to it at all.
What is it?
Click fraud is an actively malicious practice in which humans or automated bots will continuously click on an advertisement, therefore tricking the advertiser into believing that their campaign is effective. This is an example of targeting the individual ad.
Implications and Motives
It can be a risk to your business, as fraudsters will ensure that you use up your entire ad spend on online ads or displays by making you pay for ads that aren’t being clicked on by genuine users. This means that you will receive no return on investment. Therefore, you will have little to nothing left to invest in the campaign going forward.
Some companies use this practice to get ahead of the competition, known as competitor click fraud. This is where a fraudster (in this case a company) will target a competing business’s ad campaign using click fraud, which results in the above, the ads will either lose visibility or withdraw due to insufficient budget. This means that the fraudster’s ads will move up in rank instead.
Domain Spoofing and Made for Advertising
A recent report from Adalytics, an ad quality and transparency platform, states that Microsoft, Disney, Ford and numerous other household names were misled into purchasing what they believed was premium ad inventory on Forbes' main site, only to have their ads placed on a secretive, ad-filled subdomain, www3.forbes.com. Experts suggested that the subdomain can be classified as Made for Advertising and involved in domain spoofing.
As businesses increasingly rely on automated bots to manage their advertising campaigns, they are becoming less aware of where their ads are being placed. Although advanced, bots are not perfect, so relying on them entirely can be risky for your business. When a bot places your advertisement on a website, it may not recognise that the website is fraudulent or is being used for fraudulent purposes. It’s crucial that you continually monitor and review your campaign to identify any suspicious activity.
What is Domain Spoofing?
Domain spoofing occurs when a person or bot creates a lookalike domain or URL of a reputable website and replicates it onto a fraudulent website to trick advertisers into placing their adverts there. The fraudulent website is of low quality and will have no value for the advertiser, who will, therefore, receive no return on their investment. If a user clicks on the website and discovers that it is ingenuine, your association with the website may damage your reputation if users believe they are being used to generate revenue.
What is Made For Advertising?
Made for Advertising (MFA) refers to websites or webpages created to generate revenue from ads. They aren’t necessarily fraudulent but can be misused for fraudulent practices and can mislead companies into believing the site is reliable.
A company will then pay to display its advertisements on the MFA website, believing it to be a legitimate advertising website, but their ad will be surrounded by low-quality, minimal content and inappropriate ads.
The primary goals of MFA sites are to attract visitors through various means, including organic search and page traffic, so visitors will click the ads and generate income for the site owner. If online users believe your business is using them for increased revenue, this can be harmful to your online reputation and affect your engagement rates in the long term.
The above demonstrates that if major brands can fall victim to advertising fraud, your business may also be vulnerable.
In part two of Understanding Ad Fraud, our digital marketing experts will delve into various effective advertising strategies to help your business reduce the risk of ad fraud for optimal results.
Are you in need of digital support? Hydra Creative is a full-service digital agency with the experience and expertise to guide you through your digital journey. Contact us today.
