The Prevention of Ad Fraud

The digital environment is the largest segment of the advertising market. For many advertisers, the channel is one of the most important ways of communicating with users.

In the Internet world, we can increasingly come across the concept of ad fraud. According to AppsFlyer, in 2022, app install fraud remained a significant concern, resulting in a substantial global financial risk of $5.4 billion. This staggering figure represents the potential monetary loss without adequate fraud protection measures in place. And the numbers are getting bigger; when comparing the average fraud rate in H1 2022 vs. H2 2022, we see a 40% increase in iOS and a 46% rise in Android. Moreover, the World Federation of Advertisers predicts ad fraud worldwide will cause up to $50 billion in damage by 2027.

What is ad fraud?

Ad fraud is the practice of deliberately delivering ad impressions that the real person cannot see. Most ad fraud is generated by bots, software designed to perform automated, repetitive tasks online. However, not all bots are bad. Search engines, for example, use bots to explore millions of pages and apps every day in order to understand what content they are offering. They use this information, so as to perform better in searches.

Some examples of how fraud is carried out:

There are many ad scam tactics – here are just a couple of examples:

1. Bots are quietly installed on consumers’ PCs and provoke impressions the user does not see.
2. A compromised computer network (“botnet”) creates fake consumer traffic. Virtual machines that mimic consumer computers generate thousands of views.
3. Videos that automatically play but are either too few or even invisible on the page.
4. Software that emulates many clicks every time a consumer makes a real click.

How common is ad fraud?

Extensive research conducted by ad fraud experts reveals that a considerable chunk of web traffic is compromised by fraudulent activities. Through meticulous studies, AppsFlyer has unveiled the alarming reality that bots contribute to more than 70% of fraud across various regions. The State of Fake Traffic report for 2022 exposes the prevalence of falsified web activity, indicating that 11.2% of total web traffic was deemed fake. Shockingly, 1 in 10 website visitors were identified as inauthentic, leading to a wastage of $35.7 billion in ad spend. Furthermore, eMarketer projects a global digital advertising fraud forecast of $100 billion by 2023. These findings underscore the pressing need for robust measures to combat ad fraud and safeguard advertising investments.

Ad fraud warning signs

Thankfully, there are ways to detect ad fraud and cut it off before it makes too big of an impact on your bottom line. Knowledge is half the battle, so be sure to keep an eye out for the following:

• Low Viewability: Viewability determines whether your ad had the chance to be seen by an actual human. And while 100% viewability isn’t feasible, yours should be around 40-60%. If it is lower, that means there’s a chance your traffic, visits, and clicks are coming from fraudulent sources since the ads couldn’t be seen by actual people. 
• High Click Through Rates: While not always an indication of ad fraud, it could be a piece of the puzzle. Be sure to keep an eye on the time between clicks and conversion; if it’s unusually quick, it could be a cause for suspicion (to be able to see this, you’ll need log-level data). 
• Strange Traffic Sources: Good news: you’re getting a lot of traffic from your latest campaign. Bad news: it’s from outdated browsers and unpopular devices. Traffic from unusual sources such as these can be indicative of fraud; also keep an eye out for repeated visits from the same IP addresses, as well as random countries outside of your targeting parameters.
• Straying Too Far From Your Benchmarks: You know your performance benchmarks (or at least, you should know them), and if your campaign performance starts to stray too far from those there’s a chance you’re dealing with fraud. Be sure you have established benchmarks for clicks, CTR, page views, and conversions to be able to know when things look off.
• A Lot of Visits, But Little Added Revenue:  If you’re seeing a big spike in visits but no movement on revenue-driving conversions, you could be getting fraudulent traffic. 

With these warning signs, you have a good chance of safeguarding your campaigns. But always remember to get proactive with protecting your performance.

10 ways to prevent ad fraud

1. Know Your Traffic Source

Before you really do anything to fight affiliate fraud, you need to know where your ads are running. In that regard, conduct your research and make sure to screen and pick the right ad network that you can trust (and also know the difference between ad network vs ad exchange). The lack of transparency opens up the door for fraud, so it’s paramount to set your sights on a transparent and strict platform that can detect and prevent it.

2. Keep An Eye On Data

Watch out for changes in traffic that don’t match the performance you’re used to. For instance, sudden spikes in traffic for no real reason or an abnormally high CTR (higher than the industry standard) without any relevance to your offer. In addition, keep a watchful eye on different geos. If traffic is targeting US customers and it’s coming from Southeast Asia (one of the usual suspects), that could very well indicate fraud, particularly if conversions or other important metrics are nowhere or barely to be found.

3. Use Ads.txt

This buying method confirms that each webpage uploads a file to its root domain detailing which SSP (Sell Side Platform – a tool that manages the programmatic advertising of a website) offers its inventory, its Placement ID and its relationship with that SSP. In this way, it is ensured that the information passed from SSP and the publisher ID is accurate. The Publishers publicly indicate who is actually authorized to market their advertising space, thereby eliminating inventory fraud.

4. Target High-quality Traffic

Low-quality websites are, more often than not, breeding grounds for click fraud. Affiliates see a chance to score some cheap traffic and risk having bots clicking on their ad to boost the other side’s PPC revenue. It’s not a bad idea to limit your exposure by targeting a few specific high-value websites instead of placing your ads on just about any website relevant to your keywords.

5. Target Specific Countries

We’ve mentioned this earlier – some countries and regions are labelled as click fraud zones. Some areas are more prone to having bots, people, or even click farms whose sole purpose is clicking on advertisements. These are real people, a fact that makes it that harder to spot fraud without a close look into their activity. That doesn’t mean you should blindly stick to a US market as the best of the bunch. Rather, you should be more refined regarding the geos you advertise to and avoid those with a high risk of fraud.

6. Have a Sensible CPC

Another move you can employ for click fraud prevention is to have a reasonable cost per click. We hate to say it but a low CPC usually gets low traffic quality, which, in turn, is far more susceptible to click fraud. Spend your money where it makes the most sense for you, even if it’s not the cheapest option. There’s still good traffic to be found on a low CPC but keep in mind that you can’t expect big results on a small budget.

7. Keep an Eye on Your Competitors

It pays to know who your competitors are for various reasons, and click fraud is one of them. It’s not unheard of that affiliates competing on the same keywords click on each other’s ads to drive their own business. You can use tools such as Adplexity, AdWatcher, and WhatRunsWhere to either filter them out of your affiliate campaigns or report their fraudulent activities.

8. Work with Your Traffic Source

Maintaining a close relationship with your traffic vendor is key to understanding the type of traffic that is coming in. Look at it this way: a company’s in-house fraud detection and prevention system is not only for learning and keeping up with the ongoing click fraud trends, but it can also allow you to analyze and understand the traffic originating from their network. Not every network will be that open or user-friendly, so once again, much of this depends on your initial decision to partner up with a respectable and proven company.

9. Be Informed

It is strongly recommended that you look to be in the loop when it comes to new trends in affiliate fraud. That way, you will ensure you’re up to date with the latest news on fraudsters, fraudulent affiliates, affiliate sites, activities, locations, and so on. Online forums like Warrior Forum, Affilorama, DigitalPoint are great resources for gleaning information while also communicating with your peers and exchanging different tactics and experiences.

10. Use Affiliate Fraud Tools

Affiliate fraud is a serious issue as well as a large business, so you’re not alone in this fight. While built-in anti-fraud tools and features in ad and affiliate networks are often enough, beefing more on third-party presence will never hurt. There are plenty of standalone tools, such as BrandVerity, CPA Detective, Fraudlogix, Improvely, and Scrubkit that can aid you in keeping your affiliate campaigns fraud-free.

Summary

Ad fraud is a major problem that affects Advertisers in all industries, and it doesn’t appear to be going away any time soon. As such, you simply can’t afford to ignore the issue. The question isn’t whether you’ve been affected by ad fraud. It’s a matter of how much you’ve been affected by ad fraud. That is why it is so important to invest in ad fraud prevention.