What is Ad Fraud & How to Prevent it

what is ad fraud
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Online advertisement is a business with many opportunities. A lot of money flows into this industry as companies spend massive amounts on advertising online since the internet is the place that has unlimited potential for bringing in more sales. However, the bigger the money, the more risks come with it. And one of the most common digital advertising risks is ad fraud.

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Scammers found a niche where they could make a lot of money. Over the years, criminals have developed a number of techniques to scam digital advertisers, and they’ve been successfully doing it.

 

Everyone involved in digital marketing or any sort of online advertising should be aware of the ad fraud risks and know how to prevent them. 

What is Ad Fraud?

Digital ad fraud, or online advertising fraud, is the fabrication of digital advertisement clicks or displays. Ad fraud happens when companies expect their ads to be displayed to a specific audience, but in return, they receive falsified data about the number of times their ads were displayed or clicked on. 

 

Ad fraud mainly affects digital advertising networks that are charged for advertisements with fake clicks or displays. Marketers also end up paying for ads displayed to non-existent users, and publishers get chargebacks if advertisers suspect their ads have been displayed to invalid traffic.

 

Many parties involved in online advertising suffer from ad fraud. The main problem with this kind of fraud is that it’s difficult to detect. The fraud techniques are quite advanced, while the protection against them is still relatively immature. 

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How does Ad Fraud Work?

Various websites get their funds from advertisement sales. If a website drives a lot of traffic, advertisements are one of the most common ways for them to turn traffic into profit. At the same time, companies invest loads of money into advertising campaigns since advertising to the right audience can boost their revenue. 

 

Automated exchange systems, also known as programmatic media buying, can match advertising platforms and companies that are looking for a place to run their ad campaigns. Automatically matching advertisements is an effective system that many digital ad networks use. 

 

Scammers take advantage of this automated exchange by using fake traffic to charge marketers for displaying ads for non-existent users. Ad fraud can affect both ad networks and publishers.

Types of Digital Advertising Frauds

Online advertising fraud is a complex issue since scammers have developed many types of ad fraud. Here are the main ones:

• Cookie Stuffing

Cookie stuffing is an affiliate fraud technique when a website drops third-party cookies to a visitor’s browser. Because of these malicious cookies, all the traffic with them is misattributed to the fraudsters rather than affiliate partners.

• Domain Spoofing

Domain spoofing masks unsafe website domains by actively hiding or mismatching the domain from which the fraudulent traffic comes. So even if the advertisers spot suspicious activity, they cannot track from which domain the traffic originates.

• Click Injection

Click injections are a form of mobile ad fraud that only works on Android mobile devices. When someone downloads an app, a click is triggered just before it finishes installing, so the scammers take the credit, stealing it from the real media source or an advertising network.

• Ad Stacking

Ad stacking is a form of ad fraud where multiple ads are stacked on top of each other. These ads appear in a single placement, and only the top ad is visible. However, all the impressions and clicks the top ad receives are registered for every ad in the stack, even though no users see them.

• Pixel Stuffing

Pixel stuffing means embedding an ad with a fraudulent tiny 1×1 pixel stuffed with many ads. The pixel is usually very small and not visible to a human eye. As the regular ad runs and collects ad impressions, the same engagement counts for the invisible ads stuffed in a pixel.

• Ad Injection

Ad injection fraud means displaying ads on the publisher’s website without their permission. Ads can be injected into existing ad spaces by replacing the real ads with fraudulent ones. Ads can also be displayed in random places on the website. Scammers use browser extensions, plugins, and malware to place these ads. 

• Geo Masking

Geo masking means hiding the location of the generated leads. Fraudsters imitate the IP addresses of the generated leads, so they look more valuable. If these leads appear to come from desired locations, scammers then charge advertisers more for the fake leads they provide.

• Click fraud

Technically, ad fraud is a type of click fraud. Click fraud is a broad term that describes various types of scammy activities, and ad fraud is one of them. This is a very common fraud form that certainly deserves mention. Fraudsters use bots to produce fake clicks on advertisements that are placed on scammer-owned websites. Click fraud helps them generate revenue from unsuspecting ad networks. 

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Ad Fraud Detection Techniques

For a long time, marketers had very few tools to identify and fight digital ad fraud. Luckily, ad fraud detection technology is getting more advanced, and companies have made significant improvements in reducing the impact of ad fraud. Here are some tips that can help detect ad fraud:

 

  • Use ad verification tools
  • Partner with reliable publishers
  • Use anti-fraud tools and software
  • Monitor and ban suspicious IP addresses
  • Target specific audience on social media
  • Track relevant ad performance metrics to spot discrepancies

 

While these techniques can help detect ad fraud, they may not protect ad networks from significant losses. Only preventing ad fraud before it happens can save advertising companies from losing their money to ad fraud.

How to Prevent Ad Fraud?

You can prevent ad fraud by using proxies. Proxies can be used to click on links invisible to the human eye and automatically collect data much faster than any person could. Here are a few examples of how proxies can help you prevent ad fraud:

 

  1. Ensure your digital advertising compliance by verifying the validity of your ad campaigns. Use proxies with suitable targeting parameters to recreate an environment of your target audience. This can help you guarantee the compliance of your ads and their placement.
  2. Use datacenter proxies to test affiliate links and monitor backlinks. This can help you find the potential redirects and troubleshoot the slowdowns in the delivery chain.
  3. Test your potential partners with proxies before getting into business with them. This can help you ensure the compliance of your partners before you get into the ad fraud trap. 

Conclusion

Online advertising fraud is a common issue that affects many marketers, ad networks, and publishers. Ad fraud has been around for quite a while and comes in various forms. This type of fraud can affect both web and mobile users.

 

Ad fraud can be detected by using various tools and tracking ad performance metrics. If companies notice significant discrepancies in ad traffic, they can suspect that click fraud is involved. However, only detecting advertisement fraud is not enough to stop it. 

 

To prevent fraud, companies can use proxies. They can help test your ads in the same environment they would be displayed to your target audience. You can also utilize proxies to learn about your potential partners and identify the risks before deciding to work with them.

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