Online advertising is essential for brands and businesses looking to reach their target audience. However, the rise of digital advertising has created an equally sophisticated problem: ad fraud. Understanding Ad Fraud is critical to your campaign’s success.
Ad fraud siphons billions of dollars from advertisers each year, making it one of the biggest challenges for marketers and businesses.
In this blog, we’ll explore ad fraud, its impact on advertising campaigns, and actionable steps you can take to protect your ad spend.
What Is Ad Fraud?
Ad fraud is malicious activities that generate fake impressions, clicks, and conversions in online advertising campaigns. These actions aim to deceive advertisers into paying for non-human traffic or invalid interactions.
Ad fraud can take various forms, such as:
- Click Fraud: Automated bots or fraudulent actors generate fake clicks on ads, depleting the advertiser’s budget without delivering real engagement.
- Impression Fraud: Fake impressions are generated, leading advertisers to believe their ads are being viewed by real people, when in fact, they are not.
- Install Fraud: Malicious apps simulate installs of mobile apps without genuine user engagement, tricking advertisers into paying for fake downloads.
- Domain Spoofing: Fraudsters pretend to be premium publishers and sell low-quality inventory at premium prices.
- Pixel Stuffing and Ad Stacking: Ads are crammed into tiny, invisible spaces or stacked on top of one another, making them impossible for real users to see.
The Impact of Ad Fraud
Ad fraud can have significant negative impacts on advertising campaigns:
- Wasted Budget: When fraudulent traffic consumes your advertising dollars, the return on investment (ROI) from those ads diminishes, leaving you with less to spend on actual opportunities.
- Skewed Analytics: Fraudulent activity distorts key performance metrics, making it difficult to measure the true impact of your campaigns.
- Damaged Brand Trust: Showing ads to bots or on inappropriate websites can harm your brand’s image and credibility.
- Loss of Genuine Opportunities: By directing your budget toward fraudulent traffic, you may miss out on genuine clicks, impressions, and conversions from real customers.
How to Combat Ad Fraud
While ad fraud is a constant threat, there are several strategies you can implement to mitigate its impact on your campaigns:
1.Work with Trusted Partners
Ensure that you’re working with established and transparent advertising networks and demand-side platforms (DSPs). Reputable partners often have their own measures to detect and prevent fraud. Always look for platforms that are certified by organizations like the Trustworthy Accountability Group (TAG) or the IAB’s Ads.txt initiative.
2. Implement Ad Verification Tools
Ad verification tools like Integral Ad Science (IAS), Moat, and DoubleVerify help advertisers monitor their campaigns for signs of fraud. These tools analyze traffic patterns, verify the authenticity of impressions, and ensure that your ads are served to the right audience.
3. Use an Inclusion and Exclusion List
To reduce the risk of domain spoofing and low-quality traffic, create an Inclusion List of trusted websites where you want your ads to appear. Conversely, an Exclusion List of known fraudulent websites can block your ads from being shown on potentially harmful or irrelevant domains.
An analytics tool like the one we use at Thrive Advertising cuts down on significant ad fraud. The primary tool our Media Buyers use utilizes on-site website tags to measure bots and human activity so marketers can make better business decisions using analytics.
4. Monitor Campaign Metrics Closely
Look for unusual patterns in your data. High click-through rates (CTR) combined with low conversion rates could signal click fraud. Similarly, if traffic suddenly spikes from unfamiliar sources or regions, it may be worth investigating further. Regularly auditing your analytics will help you identify anomalies and act quickly.
5. Leverage Machine Learning and AI Solutions
Advanced machine learning (ML) and artificial intelligence (AI) tools can help identify and block fraudulent traffic in real-time. These systems analyze large amounts of data to detect abnormal behavior, such as irregular patterns of ad engagement or discrepancies in user actions.
6. Collaborate with Industry Organizations
Engage with industry groups such as the Interactive Advertising Bureau (IAB), TAG, or Media Rating Council (MRC), which provide best practices and resources for detecting and preventing ad fraud. These organizations are at the forefront of combating fraud and often offer certification programs that help advertisers verify the authenticity of their partners.
Real-World Examples
A Fictional Anecdote: Jason and His Outdoor Apparel Brand
Jason, an entrepreneur who had recently launched an outdoor apparel brand, was eager to invest in online advertising. His brand’s products were top-notch, but he had limited marketing dollars to spend like any startup. Determined to grow the business, Jason decided to run a programmatic advertising campaign to drive traffic to his website.
However, after his first month, the results were disappointing. Despite having a high click-through rate (CTR), sales conversions were abysmal. It didn’t take long for Jason to suspect that not all clicks were genuine. That’s when he decided to hire a seasoned media buyer, Monica, to manage his campaigns.
Monica explained to Jason that a high CTR coupled with low conversions was a classic red flag for click fraud. She immediately implemented a two-pronged strategy: using trusted ad networks and credible DSP and integrating advanced ad verification tools. Within days, Monica identified that a significant portion of Jason’s traffic was coming from low-quality websites, where bots were inflating his click metrics.
Monica quickly reallocated the ad spend to verified, premium ad exchanges and used real-time monitoring software to track fraudulent activity. By the end of the next quarter, Jason’s sales had increased dramatically—his advertising dollars were finally reaching genuine outdoor enthusiasts rather than bots. Thanks to Monica’s expertise, Jason managed to save his budget and put it to better use, proving that partnering with the right media buyer can protect a business from ad fraud.
How to Combat Ad Fraud (And More Stories)
Stories like Jason’s are becoming increasingly common, as more businesses face the challenges posed by ad fraud. Here are some proven strategies to mitigate ad fraud, inspired by the approaches successful advertisers have taken.
Work with Trusted Partners
Reputable advertising networks are a crucial first line of defense against fraud. Let’s take the example of Sarah, the marketing director at a global skincare brand. After falling victim to domain spoofing—where her ads were being shown on low-quality sites that falsely presented themselves as premium publishers—Sarah enlisted the help of an experienced media buyer, Greg.
Greg, who had a robust understanding of ad fraud, immediately switched her brand’s advertising to a trusted Demand-Side Platform (DSP) that utilized ads.txt to ensure only authorized sellers could offer ad space. This reduced fraudulent activity and increased the overall transparency of her campaigns. In a matter of weeks, Sarah saw a much healthier return on her ad spend, and her ads were reaching real, engaged customers across legitimate websites.
Implement Ad Verification Tools
Advanced verification tools can monitor your campaigns in real-time and detect suspicious activity. John, a seasoned e-commerce entrepreneur, invested heavily in mobile app installs. However, he soon found that many of these installs weren’t translating into active users. Suspecting install fraud, John turned to a media buying agency with expertise in fraud prevention.
His new team introduced him to tools like DoubleVerify, Fou Analytics, and Moat, which helped them analyze traffic sources and user behaviors. They uncovered a network of apps generating fake installs by simulating downloads in the background, with no real user interaction. By blocking fraudulent traffic and optimizing his app install campaigns, John was able to increase his genuine user base while cutting out fraudulent activity that had been draining his budget.
Use an Inclusion and Exclusion List
Understanding Ad Fraud is the key to successful advertising. Advertisers can create Inclusion Lists of trusted websites where their ads are allowed to appear and Exclusion Lists of sites known for fraudulent activity. Amelia, the owner of a growing SaaS company, worked closely with a media buyer who understood the intricacies of programmatic advertising. After losing a portion of her budget to pixel stuffing—where her ads were being displayed in invisible pixels—Amelia’s media buyer implemented a stringent Inclusion List of high-quality sites.
In addition, they blocked suspicious domains that were known to host fraudulent activity. The result? Amelia’s campaigns became more efficient, with her ads only being served on relevant, high-traffic sites. Her click-through and conversion rates skyrocketed, and she no longer had to worry about paying for invisible ads.
Leverage Machine Learning and AI Solutions
AI and machine learning (ML) can help prevent fraud by identifying abnormal patterns in user behavior. Robert, the CMO of a leading fitness app, had always been a tech-savvy marketer. When he noticed discrepancies in user engagement metrics, he invested in AI-driven fraud detection software. Working with a media buyer who specialized in AI tools, Robert was able to automatically detect fraudulent activities and block them before they impacted his budget.
The ML system flagged unusual behavior because of its deep understanding of ad fraud. It knew that short session durations from certain IP addresses and traffic spikes during odd hours helped Robert weed out bots from genuine users. As a result, his app’s user acquisition costs dropped, and his ads started reaching the fitness enthusiasts he was targeting all along.
Expert Media Buyers are Necessary to Protect Your Ad $$$
Ad fraud remains one of the biggest challenges in digital advertising today, but as the stories above illustrate, advertisers can take proactive steps to protect themselves. By staying vigilant and working with trusted partners, you can ensure that your advertising campaigns deliver results without falling prey to fraud. Hiring a seasoned media buyer, like the team at Thrive Advertising, where they implement cutting-edge ad verification tools to ensure your ad budget is spent on reaching real people, is critical to your success. Call our team today to discuss how we can improve your digital advertising ROAS (Return on Ad Spend). Your results will depend on whether or not your Media Buyer has experience understanding ad fraud. Thrive’s team is imperative to your campaign.