Digital marketing is, by far the most popular advertising strategy for millions of businesses worldwide. With billions being spent every year on banner ads, pay per click campaigns, and social media influencers, digital marketing spend is only expected to increase over the next few years.

But with businesses spending billions on digital ads, are they really getting their money’s worth?

In 2016, marketers lost $7.2 billion to digital ad fraud and fraudulent activity. Not only is this an incredibly high figure, but many advertisers didn’t even realise they had been defrauded before it was too late.

With digital ad fraud only on the rise, it’s now more important than ever that advertisers understand the risks that come with advertising online.

What Is Ad Fraud?

Ad fraud can be defined as the practice of fraudulently representing online advertisement impressions, clicks or conversions, in order to generate revenue. Since the rise of digital advertising, there have been various types of fraudulent schemes developed over the years.

One of the most common types of ad fraud which affects millions of businesses every year is click fraud. This fraudulent activity involves users repeatedly clicking on businesses pay per click adverts to waste their budget. The individuals behind this fraudulent activity can range from competitors to sophisticated criminal gangs who own large click farms and make a living from this type of fraud.

But it’s not just fraudulent pay per click activity businesses have to look out for. Social media advertising also has its share of ad fraud which can leave advertisers greatly out of pocket. One of the hottest digital advertising trends in recent years is sponsoring influencers to promote products and services in exchange for a fee. The strategy sounds solid, but in order to get a
return on investment, their audience must be real. In recent years there has been a big increase in fake social media followings where companies pay large sums of money to influencers, only to find out most of their followers are fake.

The Recent Explosion Of Ad Fraud

As technology has evolved over the years, so has the different types of ad fraud schemes.

Recently, many large scale fraud schemes have been discovered in the digital marketing world, ranging from click farms and botnets to fraudulent mobile apps.

Just at the start of 2020, Google announced that it had recently removed nearly 600 apps from its play store for violating its ads policy. And this isn’t the first time Google has had to remove apps. Since 2016, Google has been regularly removing apps and banning publishers from its play store for violating their terms of service. Some apps with more than 250 million downloads
have even felt the wrath of Google, which only goes to show the scale of ad fraud in today’s industry.

Upon closer inspection, all of these apps engaged in ad fraud in some shape or form. From click injection, ad stacking, click spamming, and background ad activity, these apps have taken a huge chunk of advertiser’s money fraudulently. With thousands of apps being added to the play store every week, how can advertisers ensure they are not falling victim to such scams?

How Advertisers Can Fight Back

Originally, advertising networks such as Google were the only line of defence when it came to fighting ad fraud. But thanks to the advancements in AI, many third-party solutions are now available to monitor digital ad campaigns.

These services track various user metrics to ensure the traffic advertisers are receiving are legitimate and not fraudulent. If any invalid traffic is detected, then the software will automatically report back to the advertiser and can even block future visits from users via the ad network.

Another way advertisers can fight back against ad fraud is to employ new technologies being introduced to tackle this rise in ad fraud. One of the latest additions to the digital marketing industry is the ads.txt file which helps increase transparency between advertisers and publishers. By keeping a transparent log of the authorized ad sellers, this massively helps decrease the chances that fraudsters will be able to sell counterfeit inventory.

Reducing ad fraud in campaigns also relies on the advertiser to do their own due diligence. Limiting and stopping ad spend in the most fraudulent ad channels is a sure way to reduce the overall risks of ad fraud. With in-app advertising currently having the highest levels of fraud in the industry due to the rise in malware apps, just cutting ad spend on in-app advertising is a sure-fire way to reduce fraud.

By Sam Carr, CMO, PPC Protect

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