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Understanding and Preventing Digital Ad Fraud

Written By: Augustine Fou | Comments Off on Understanding and Preventing Digital Ad Fraud

One element that makes digital advertising attractive to brands is the ability to track impressions, views and clicks. This gives brands an increased ability to oversee return on investment (ROI) and adjust advertising/marketing campaigns accordingly. However, the very nature of digital also enables hackers and fraudsters to drain your ad budget and compromise your efforts.

What is Digital Ad Fraud?

Digital ad fraud is a form of fraud that doesn’t happen with other types of advertising and marketing. In TV advertising, there are a limited number of available spots due to time constraints. In magazines and newspapers, ads are limited because of physical space. But online fraudsters can create an infinite number of fake websites to drain your ad budgets into their own pockets. 

It’s cheap and relatively easy to set up websites. Fraudsters can copy and paste some code, and start selling digital ad impressions. And while these fake websites have no humans visiting them, they get the traffic needed to generate ad revenue by purchasing traffic. Just Google the term “buy traffic” and you will see thousands of websites selling all sorts of traffic. This is exactly the same as fake followers, fake clicks, fake YouTube views, etc. All of the traffic – or website visits – are generated by bots (software designed to repeatedly load webpages). But often advertisers mistakenly assume their ads are being shown on legitimate websites, and that humans see their ads.. 

The Impact on Small Business

Given how lucrative ad fraud is for criminals, there’s a lot of it going around. Estimates vary wildly, but even the most conservative estimates put the money involved worldwide well into the billions annually. Recent estimates vary from $6.5 billion to as high as $19 billion, a range that points to the difficulty in measuring fraud’s true impact.

There are also problems in accurately trying to gauge the impact of ad fraud on your own business. It’s extremely difficult to know if you’re catching all the add fraud, since the bad guys are highly skilled at hiding their criminal activity and all the fake traffic and fake clicks are being recorded faithfully in your analytics. 

If your traffic numbers and click-through rates (CTRs) are artificially inflated from fake sites, you could be misled into thinking those sites are “performing better” for you. Often this has you allocating more budget to those fake sites. But if your ads are being shown on fake websites to fake users, none of those ad impressions or clicks will lead to sales or a positive outcome for your business. Essentially,, you are just wasting money.

Combating Ad Fraud

As a small business owner, you can’t afford to spend the next $50, if the first $50 didn’t yield new business. This is the mentality you should have when looking at digital analytics about your ad spend. Even if you got a lot of clicks and traffic, you need to look at other metrics (conversions, revenue) to see if all those “eyeballs” actually drove business for you.

If the answer is no, you should seriously reconsider spending the ad budget in other ways. Perhaps, creating content for your site that would be useful for your customers, or help turn prospective customers into buyers. After all, having additional content on your site provides longer-term value when it comes to helping your search rankings. And, if you’re doing digital advertising to drive people to your site, but you have no useful content on your site, you may end up turning people off for good. 

Assuming your digital marketing is working, you need a solid handle on your analytics to see if ad fraud is affecting your campaigns. Start with common sense. If you see a source of traffic is driving visitors to your site, but all of them are “bouncing” (leaving right away), then something is wrong. They are likely bot visitors. On the flip side, if you see all the visitors are staying all the time (a 0% bounce rate)  that is also suspicious. Let’s say you see a bunch of traffic coming to your site in the overnight hours, when most people in your target demographic (the US, for example) humans are asleep, you must look into that more carefully. 

Here are some more tips and examples, from two small business owners who looked at their own analytics with a skeptical and detailed eye. They found the ad fraud and mitigated it, to improve their own business outcome.

Article written by
Dr. Augustine Fou is an independent cybersecurity and ad fraud researcher who helps clients identify and remove fraud impacting their marketing campaigns. He is an industry-recognized thought leader in digital strategy and integrated marketing. Dr. Fou was the former Chief Digital Officer of Omnicom’s Healthcare Consultancy Group, a $100 million agency group serving pharma, medical device, and healthcare clients and served as SVP, digital strategy lead, at McCann Worldgroup/MRM Worldwide. Dr. Fou taught digital strategy at NYU's School of Continuing and Professional Studies and Rutgers University's Center for Management Development. He started his career in New York City with McKinsey & Company.