Much like newspapers, radio and television that went before it, advertising built the internet we know today. Search engines, social media platforms, and news publishers all have one thing in common: they wouldn’t exist without digital advertising dollars.
And for as long as internet advertising has been around, “ad fraud” has existed alongside digital ads. While ad fraud is a somewhat well-known issue facing the online marketing world, it’s estimated that for every dollar marketers spend on online advertising, almost half of the value is lost due to ad fraud. And while ad fraud can be committed by malicious software and human actions, the majority of ad fraud is carried out by automated bots.
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Some marketers are already cognizant of the issue as many rank click fraud and bot traffic to be among the highest concerns for digital ad buying. To get a better perspective on what havoc these bots are having, here are a few statistics to take a look at:
$7.2 billion: The estimated cost of ad fraud in 2016 ( ANA)
Half of all online ads are never seen by a human being ( Google)
Only 8% of all impressions have the opportunity to be seen by a real person ( Mediapost)
Because of the fraud committed by these bots, marketers must deal with the fact that the issue will not go away and that action must eventually be taken since it affects SEM, SEO, and affiliate marketing efforts.
Common Ad Fraud Types
Third parties who either want to drive click costs or fabricate impressions on their sites to reap the benefits of ads have multiple ways by which they can operate.
Using malware, clickjacking involves hidden software on an unwitting user’s computer and sends them to websites they never planned to visit. Malicious coding is hidden beneath what appears to be legitimate buttons or other clickable content. A similar method is to create a network of bots to simulate real users and click hundreds of times on a digital ad or repeatedly loading a single page.
Content farms are sites that are typically created by fraudsters to scour and scrape the web for content hosted elsewhere and then distribute bots to make non-existent, "qualified audiences" appear. They’ll then try to get listed on one of the ad exchanges, and while they’ll be blocked by most, will become successful and still receive ad revenue.
For programmatic ad buying, fraudsters can cloak the URL of where an ad will eventually be served. So when the bid is made, marketers will essentially have no idea what type of site their ad will be displayed, so placement quality and relevance are essentially thrown out the window.
Pixel stuffing is a systematic way of cramming one or multiple advertisements into a 1 by 1 pixel unit at the bottom of a page. Indecipherable to the average human eye, there’s just no way that ads held hostage like this are ever seen by an actual person.
How Fraudulent Bots Impact Marketing Dollars
So ad fraud has been around for awhile now, what effect is it having on marketers and their budget dollars?
According to veteran ad executive Bob Hoffman, “Nobody knows the exact number, but probably about 50 percent of what you’re spending online is being stolen from you.” Hoffman is a well-known critic of the advertising industry, and he’s not far off.
Online Ads Are Easy Targets
Committing fraud in online advertising is both the Wild West and a fraudster’s paradise. Marketers know this still goes on and millions are still lost every month to this seemingly lawless frontier.
One reason why online ads are such easy targets is that advertisers often have no idea fraud has even occurred until some time after. In many cases, standard reporting metrics such as cost-per-lead and conversion rates fail to offer insights if something “fishy” is going on. Because the cost of fraud is a part of the cost in obtaining real business and leads, there’s very little in the way of detecting ad fraud.
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Up until recently, ad networks didn’t really have much in place to help prevent fraudsters from applying to become part of these networks. Normally, an ad network will only ask for a publisher’s basic traffic, engagement, and demographic data for consideration when applying to their program.
Once they get approval, a publisher then can use their ad network credentials to present ads. Ostensibly, ad networks have very little to lose in the case of ad fraud because if the publisher generates traffic, everyone wins. If they fail to generate traffic or clicks, then fewer ads will be displayed, and those sites fall out of favor.
The truth is that because clicks are what drives an ad network’s ability to collect revenue, eliminating or reducing ad fraud would eventually have a negative impact on their bottom line.
What Advertisers Can Do About Ad Fraud
Fraud, particularly when it comes to bots and digital advertising, can often be misunderstood, confusing and frustrating. Because CMOs and others are afraid of making the wrong decision, they’ll often procrastinate, leaving the issue ignored and eventually underestimated regarding its impact.
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One solution is to use ad fraud detection software that implements several approaches to prevent botinvasion on your site. Some hosting providers and content delivery platforms have solutions embedded in their software suites, but there is no guarantee your service provider has you covered against the latest attack bots.
If you do find yourself out there on your own, exposed to the billions of bots on the web, make sure the solution you implement takes a multi-step approach to preventing bad bots from comprising your advertising campaign results.
Some key features your solution needs to have included are:
The ability to compare user traffic patterns with historical user behavior
The ability to unmask proxies
The ability to identify and verify devices
The ability to recognize attempts at manipulation
How will you know the solution you are considering can do these things? If it’s algorithm can determine a bot’s legitimacy through its behavior on your site. Leading bot detection software compares the way users interact with your site (say, Coupons.com) against the behaviors of how a larger pool of users interacts with similar sites (RetailMeNot, redplum, GroupOn, etc.). With tools like this in place, advertisers can then analyze this data and help to make a decision on whether the quality of visits from one of their publishers needs to be examined more closely.
As you prepare to embark on a fight against ad fraud, here are three action items you need to keep in mind as you move forward.
1. Always Measure, Always Monitor
Benchmark where you are today and try to get a real understanding of your site’s inbound traffic from all of your advertising channels. Then take a look at the quality of leads or business you’re getting from your ad efforts.
Make sure to take note of things like:
What does a typical user visit look like?
How do your best visits (for instance, ones that result in a service inquiry or transaction) compare to that “typical” visit?
Are you getting a lot of engaged visitors, qualified leads and sales from your ad traffic, or is there almost no engagement?
There are certainly a variety of factors on your site that could cause these issues, but before you can definitively call out ad fraud, you need to know how people engage with your site.
If the behavior and engagement metrics on your site are already low, simply pointing out an advertising source as a sender of fraudulent traffic will not cut it.
2. Take Control - Manage It
According to one study done by White Ops and Digital Content Next, researchers concluded overall that publishers have the greatest control over fraudulent bot traffic since most bot traffic originates from questionable traffic sourcing policies. But this doesn’t mean that sites will always exercise this control and thus give you the quality traffic your ad dollars are paying for.
If traffic to your site looks even the least bit questionable, clean it up or figure out what’s skewing your data since this is one definitive way you can take control.You’ll always want to start with creating custom filters if your site relies on traffic data from Google Analytics.
Every couple months, you may notice an uptick in overall traffic from referral sources to your site. The list of bot spam increases all the time, but the good news is that creating the appropriate filters and segments in Google Analytics can be applied to any traffic source.
3. Finding a Trustworthy Solution Sooner Than Later
Even if you can’t stop it completely, fighting back is all about making a fraudster’s life miserable. The most important thing you can do to stand up against bot fraud is finding some kind of bot mitigation solution that you can trust.
There are two ways that bot mitigation solutions can be implemented: at the site level or at the CDN.
Solutions which are deployed at the CDN level essentially inspect each HTTP request as it happens. On the surface, these solutions are very proactive in detecting and protecting your site against bots, but they require a massive amount of resources to deploy as you will need to involve your technology staff and dev ops teams
No matter how your solution is implemented, detection and mitigation are ultimately the definitive way of shutting down fraudsters.
The fight rages on, but fraudsters are only developing more complex methods every day.
Unfortunately, there will probably never be a one punch knockout solution to address the issue of ad fraud. Acknowledging its presence is the first step, but overall, you need to disrupt the model fraudsters are used to and then take action to insulate you and your advertising budget from fraud.
No matter how much you can invest, there are ways to fight back against ad fraud and these questionable bots. The thing to keep in mind is that fraud will never end, so do what you can to protect yourself.