Ad Fraud Cutouts
Jackie Long

Ad fraud simplified

People have been talking about ad fraud for years, but many still don't understand what it is or how it may affect them. Here's our quick guide on what you need to know.

With the rising dominance of digital advertising, ad fraud has become a hot topic of conversation. Some studies claim ad fraud is on the decline, while other studies say it has ballooned out of control. The truth is mostly unknown due to a complete lack of agreement on what exactly constitutes ad fraud and how to measure it, which is even further complicated by the convoluted nature of digital advertising as a whole.

So what do we know? Well, ad fraud was very widespread in the digital advertising sphere before tools and analytics became more advanced. Now, basic ad fraud can often be conquered with simple tools and analytics—though many companies still fail to create even this simple level of protection for themselves. Many companies consider the problem neutralized because simple tools exist in most ad networks and agencies and therefore do very little to protect themselves from more sophisticated scams.

Fraudsters take advantage of the fact that many companies don’t understand ad fraud and have no easy way to see how it’s draining their resources. Understanding the basics of what ad fraud is, how it steals money, and how to prevent it can help you protect your own business from these schemes.

Think about it like this:
You need to advertise your sports equipment in the city and know that a billboard is available in a prominent location right next to a stadium. You contact the company that owns this billboard and set up a contract to have your ad placed there for two weeks. During that two-week period, you drive by the billboard and discover that your ad is not there. Instead, it’s been placed on the side of a very controversial political figure’s office. Or it’s been placed in a city hundreds of miles from your store. Or it never got put up at all.

At this point, you’re probably pretty angry. You call up the billboard company to find out what happened. They tell you that their records indicate the subcontractor did their job and your billboard is right where it’s supposed to be. You explain that you have documentation showing your ad is not where they say it is. They calmly tell you that they only work with particular third party companies that verify their work and their partners have not found a problem. Because of that, the billboard company refuses to give you a refund or look into the matter further.

You would probably never use that company again. But this happens in digital advertising all the time. Unfortunately, it’s not as easy to see when your ads are out of place online as it is with a giant billboard. However, there are ways to determine when your advertising budget is being hijacked.

The Problem

There are a number of different types of ad fraud: click fraud, impression fraud, retargeting fraud, just to name a few. Each type of ad fraud then has different schemes associated with it. These include pixel stuffing, click farms, ad stacking, domain spoofing, and more. This variety makes it difficult to keep up and understand exactly how your money gets stolen.

But they all have the same basic idea: Fraudsters insert bots or spoofed information somewhere in your customers’ digital advertising journey to generate revenue for themselves and use up your advertising resources.

To find out when this is happening, you’ll need data and some time to explore it. You may already have software in place to track the metrics that show how well a digital advertising campaign is performing. For example, you probably see how many clicks or impressions you get on every campaign. But that number is often inflated by bad traffic. Likewise, conversions are generally known to be a reliable way to tell if your campaign is successful – unless that number includes fraudulent orders and chargebacks.

This makes finding ad fraud difficult—but not impossible.

The Solutions

There are a few ways you can seek out problems in your campaigns.

Manual

First, you could use a manual approach. Examine the analytics of past campaigns to determine where you’ve been hit by fraud by looking for patterns that indicate bots, conversion rates that don’t match traffic spikes, and unusual numbers of fraudulent orders. Then, analyze the data and determine how to set up new campaigns to avoid these things. It might help for a while, but new fraud techniques will likely just pop up and cause different problems.

Tips

  1. Check analytics for unusual patterns. Humans rarely create obvious repeated patterns in data, such as a spike in orders every day at 3 pm. If you see patterns like this, look into which campaigns are bringing in the incriminating traffic, as it is likely driven by bots.
  2. Set up customized reports for your campaigns. Include multiple factors like total traffic, conversion rates, and total revenue. Once a month, compare your best campaigns against chargebacks and fraudulent orders to ensure that no campaigns are being overpowered by bad traffic.
  3. Ask questions of any digital ad agencies and programmatic companies that you use for your campaigns. Find out how they handle ad fraud, what protections they already have in place, and if they provide refunds when fraud is found. Talk to them about how they vet publishing sites and how much control you have if you find a problem. If they can’t answer your questions, it may be time to look for a new company.

Automated

If you don’t have the time or resources for a manual solution, you can also utilize available technology. Solutions exist that can score your traffic, help you pinpoint fraud using behavioral analytics, or sometimes even block bots from campaigns entirely. With the right software, you can see when campaigns are reaching real customers and even use additional metrics to determine which campaigns are most successful at converting real sales. There are multiple fraud prevention companies that offer a variety of options. Finding the right fit for your company will depend on your budget and pain points.

Tips
Look for fraud prevention systems that include:

  • Easy customization of fields and KPIs, as well as custom reports
  • Analysis that includes multiple factors, like behavioral analytics, payment attributes, and device fingerprinting
  • Integration with major ad services
  • Flexibility in adjusting campaigns and making changes
  • Bot-blocking technology


While ad fraud is a complicated topic that will continue to plague digital advertising, you don’t need to be a subject matter expert to protect your campaigns. Start small and test out different options to find what really works for your company and stop letting fraud steal from you.

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