Ad Fraud: How it’s Impacting Online Brands and How to Prevent It

Digital advertising is emerging as the preferred marketing strategy for marketers looking for customers’ attention. In fact, the estimated spending on digital ads will cross $500 billion as of 2022. Though sadly, not all of this would end up being used for directing targeted advertisements towards the customers. When such staggering amounts of money are at stake, it is not a surprise that several fraudsters want to leverage the situation for their benefit.

The first digital ad fraud was reported in 2001, and now, after two decades, the scale of online ad fraud has touched an unbelievable magnitude. But what is ad fraud? What are its implications for small businesses? Read on to learn more about this serious issue that is derailing the digital marketing campaigns of many brands.

What is ad fraud?

Ad fraud is a term used to describe online activities that involve fudging the data related to the number of times an advertisement has been displayed or clicked on by visitors. As the number of clicks increases gradually, so does the revenue of the advertiser, and the publisher is able to generate revenue in the form of an advertising fee. But there are many scammers who take advantage of the fake clicks and lack of transparency on most prominent advertising networks. These scammers spoof high-value websites and then engage bots to inflate the number of clicks by visitors, leading to money being siphoned from the advertisement budgets.

Ad fraud deceives the advertising platforms and makes them believe that the fraud network activity generated through bots is, in turn, actual activity from users. Start-ups and small businesses are the major targets of ad fraud as they have a keen desire to drive their brand growth through an improvement in website engagement. The fraudsters cheat these brands by promising an increase in website traffic and engagement.

Marketing Technology News: MarTech Interview with Gautam Mehandru, CMO at Illumio

Impact of ad fraud on brands

Ad fraud can have some serious implications for brands and their growth in the market. Some of the most serious effects of ad fraud are: –

1. Wastage of budget: –

Due to ad fraud, companies end up spending huge sums of money on advertising but get no results. Fraudsters engage in activities like generating fake clicks, getting clicks on low-quality sites or boosting the cost of every impression artificially. As a result, companies are unable to achieve the desired marketing objectives.

2. Bad leads: –

The bad leads generated due to ad fraud do not add any value to the brand. To boost sales, the salespersons must be focused on high quality leads, but the low-quality leads result in a waste of effort and also lead to losing out on genuine leads.

3. Lowering of reputation: –

Any association with an ad fraud scam significantly damages the reputation of the company. In case the ads are running on some non-reputed websites, it can also impact the brand image.

Best practices to prevent ad fraud

It is extremely important for brands as well as publishers to prevent ad fraud to protect their reputation and achieve the specified objectives. Sometimes, ad fraud can lead to ad networks blocking a website. It is imperative to have a strong ad fraud detection mechanism in place to present any loss in revenue and reputation. Here are some of the best practices to prevent ad fraud: –

1. Set a benchmark: –

It is important to define benchmarks for what standard web traffic looks like. This will help on monitoring the web traffic and identify abnormal events like unusually high click-through rates, random spikes in traffic, or clicks from outside the target regions.

2. Monitor Conversion Rates: –

It is important for brands to monitor their conversion rates to identify digital fraud. If the conversion rate is unusually low during peak traffic, it is a red flag. Similarly, if the click-to-install time for a mobile app is unusually high, then it indicates spam.

3. Research advertisement networks: –

One of the best ways of averting any ad fraud is getting to know the advertisement network a bit better. Companies must opt for an ad network that offers transparency in operations and has strict guidelines for dealing with fraud detection and prevention.

4. Know the audience: –

Like every advertisement campaign, digital advertisement campaigns also have specific audiences as their target. Brands must have a deep understanding of the target audience, and it would help in the quick detection of any untoward activities. For instance, if a company is targeting customers in Australia, then any clicks from regions like China or India could indicate ad fraud.

5. Check for spoof websites: –

Brands must regularly check for websites that have a similar name and appearance as their website. This can be done by changing one or two alphabets in the name and will help in addressing the problem effectively.

Ad fraud is a serious problem and requires marketers to undertake various efforts to ensure that their digital marketing campaigns are protected from any adverse impact. As fraudsters often change their methods, brands must also remain vigilant and continue taking necessary actions as required.

Marketing Technology News: Why First-Party Data Is the Future Of APAC Marketing