Published October 20, 2017

Advertising fraud is incredibly profitable. Fraudsters can employ thousands of bots for pennies on the dollar, tasking them with clicking away on your ads and chewing up your advertising spend. It doesn’t take long for bots to eat through a business’s advertising budget, and then they can move onto another and another, raking in millions for some fraudsters.

The reason this works is because most online advertisements charge the ad buyer for every view (sometimes known as an impression) or click that they receive. The general idea behind these types of ads is that buyers pay more for every person that interacts with their advertising space, but the main problem is that ad buyers have no way of knowing if these interactions are being performed by real people.

This is why advertising fraud can be incredibly profitable for fraudsters. A main source of income for them is eCommerce merchants, and using technology designed to deceive the advertising ecosphere, ad impressions can be stolen without the ad buyers even knowing. In fact, according to one source, about one-third of the money spent on online advertising is stolen by fraudsters:

“Ad fraud takes $1 for every $3 spent on digital ads.” 1

There are many different tricks that fraudsters use to steal a buyer’s advertising budget. One of the most common is where fraudsters use bot traffic to rapidly view or click on ads that buyers are paying to display. Bots are computer programs that are designed to mimic human traffic, and for a small investment on the fraudster's part, these bots can chew up advertising budgets quickly by racking up hundreds of fraudulent impressions.

Traffic for Sale

Another popular method of abusing online advertising are click farms, which is when real users are hired to emulate the actions of a real customer, even when they have no intention to make use of a business’s goods or services. These users are paid to generate impressions and click on ads at a high rate of speed. Click farms can be harder to detect than bots, because real people are performing some, or all, of the user activity.

One other scheme used by fraudsters is to sell an impression where the ad is never even visible to the website visitor. For instance, pixel stuffing is a technique where an ad is stuffed into a very small space. In these cases, a 1-by-1-pixel ad is displayed on a website, and even though the ad is not visible, it still counts as an impression.

A similar technique to this is ad stacking, which is where many ads are layered on top of each other and many impressions are counted, but only the top ad is visible to the website visitor. This appears as human traffic to the advertiser, but the impression is wasted because the target audience cannot view the ads.

Businesses are not powerless in the battle to defeat fraudsters from employing these techniques. With the right tools and analytics, ad buyers can direct resources away from poorly performing ad campaigns and block bots from being tagged in their remarketing efforts. NS8 Protect and NS8 TrueStats can help identify these low-quality ad impressions and score ad campaigns based on the presence of bot traffic, helping ad buyers to focus their budgets on the real users.

References

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