What is ad fraud and how does it work?
The last ten plus years have seen of the rise of a new, and (seemingly) unstoppable, industry – digital advertising. In a world where mobile screens have all but substituted television ones, and tech savvy generations grow up in perfect symbioses with their phones, mobile marketing quickly became the most relevant medium to reach potential new users.
As of 2018, the digital ad space reached the $90 billion mark in the US alone, followed by China ($50), UK ($16), Japan ($13), and Germany ($8). These are staggering numbers for a business still in its teen years. Therefore, it is no surprise that such a fast, uncontrolled, and unruly upsurge of a brand-new business ecosystem, becomes the perfect environment for fraud. And if digital advertising in going through puberty, ad fraud is its growing pains.
But what exactly is ad fraud? At its most basic definition:
Ad fraud is a type of scam in which the perpetrator tricks advertisers into paying for something that is worthless to them, such as fake traffic, fake leads or misrepresented and ineffective ad placements.
Let us break this concept down and give you a few tips on how to prevent ad fraud in digital advertising.
What are the most common ad fraudulent practices?
Here’s a list of the most used forms of ad fraud. At the pace at which the industry is expanding, and new creative methods of fraud continue to pop up, it will be interesting to see how this list shifts in the near future.
- Click Fraud, including:
- “Zero-Clicking” with browser scripts
- Click Injection / Ad Injection
- Click Spamming / Click Flooding
- iFraming (over/under-laying the landing page)
- Malware Apps
- Proxy Traffic
- Bot Traffic
- Incentivized Traffic
- Stolen MSIDN Lists
- Re-opening of old Subscriptions
- Multi-Subscription / Double Opt-in
- Duplicate Conversions
- Mobile SDK Overlap
Why is traffic fraud so menacing to my business?
Recent reports state that fraudulent practices comprise as much as one-third of all paid impressions. The colossal mobile in-app fraud scandal uncovered late last year serves as a reminder that ad fraud is at its prime and still evolving.
It’s a virtual certainty that the advertising market will never be without it, with an approximate $20 billion estimated to be lost to ad fraud a year.
With fraudsters coming up with new methods to fake clicks and installs on almost a daily basis, handling traffic fraud can be a daunting task. Channels and ad formats, such as mobile or video, are today’s new breeding grounds for fraudulent practices. The increase of programmatic buying (and the blind inventory available through RTB exchanges) has also propelled ad fraud to new heights.
It’s a virtual certainty that the advertising market will never be without it, with an approximate $20 billion estimated to be currently lost to ad fraud a year. This to say that, if ad fraud is not properly understood, detected, and avoided, it will harm your business, including brand reputation, viability and performance. Advertisers must stay on top of their games when it comes to awareness of existing fraud methods, as well as ways these can be mitigated.
What can I do to prevent fraud?
You might think that ad fraud will never affect you but it can truly affect anyone. From having millions invested in user acquisition campaigns, to just browsing the web – being online is all you need to be at risk. So, the more you know about fraud, the better you’ll be able to tackle it. To help you kick start your anti-fraud strategy, we enlist a few simple first steps that can be added to your advertising strategy to prevent fraud.
Pay attention to your running times
Bot fraud is more active during certain times of the day, such as from midnight to early morning, or during working times. Avoid peak time for bot activity to minimize their risk.
Constant Campaign optimization
Keep an on-going eye on your campaign performance to see where the best clicks are coming from and stop bad sources.
Use third-party monitoring
Prevent fraudsters from clicking in your ads by checking the traffic sent to your campaigns in real-time.
Select a bullet-proof ad fraud software
Another great way to minimize your exposure to fraud is by selecting an anti-fraud software that can help you detect and eliminate fraudulent practices.
Which fraud protection tool should I be using?
The industry experts at freenet digital have experienced every trick in the book applied by third parties trying to misuse our products and trick our customers. With a lack of software options being offered, we took matters into our own hands and built vene overwatch, a two-folded fraud protection solution.
vene overwatch can be used as a standalone solution, catered to the needs of Mobile Carriers and Billing Providers, or as a premium feature offered by vene dash, our ad tracking solution. By enabling the vene overwatch fraud prevention tool, you’ll have a proactive approach towards risky traffic. Our in-house built enhanced algorithms and 24/7 monitoring assure that you only get high-quality traffic.
Check our blog post on Performance Marketing Made Simple to get a full overview of the vene group of products and learn how we can take your profits to the next level.
vene is a performance marketing and compliance platform, quality built in Berlin by industry leaders. vene tracking, fraud protection and RTB solutions enable digital advertisers to expand their businesses in an uncomplicated, secure and profitable way.