30% of mobile ad spend will be lost by the end of 2023 thanks to ad fraud, with the total loss in PPC projected to reach $172 Billion by 2028.
$23 Billion per year can be recovered by using fraud mitigation platforms like ClearTrust — A new-age fraud detection platform that helps AdOps & Media Buying teams combat AdFraud / IVT and proactively manage and optimize the source and quality of their traffic with an extensive array of over 130 traffic filters, system alerts, plus a range of customer-centric features.
Safety Detectives asked Deepankar Biswas, Co-Founder and CEO of ClearTrust, to explain what businesses of all sizes should know about ad fraud, including what it is and how marketers can prevent it before paying big bucks for fake clicks and traffic.
What is ad fraud and how does it work?
Ad fraud is an illegal technique used by cybercriminals who use automations or humans clicking ads to generate fake traffic and engagement on a web page.
It is like a con artist of the digital advertising ecosystem. Imagine that you have thrown a party and someone wants to sneak into the party unknowingly. That is ad fraud in a nutshell.
It’s when fraudsters mess with online ads to make a quick buck. They target digital advertisers, websites, programmatic platforms and even the users who click on those ads. It’s like a digital game of hide-and-seek where the fraudsters hide pretending to be legit users and inflating click numbers.
Now you may ask, what’s the big deal? Well, if we don’t tackle this threat, it’s like pouring money down the drain for advertisers. Advertisers lose money, businesses lose trust, and the whole online ad ecosystem gets a black eye.
And who’s behind this digital mischief? It’s a mix of cyber-criminals, shady publishers or affiliates, and even bots. They make money by faking clicks, impressions, or engagement, and it’s a lucrative business. For instance, imagine a fraudster setting up fake websites, generating bogus traffic, and then cashing in on ads that were never really seen by humans.
Remember that viral video everyone’s talking about? Turns out, half the views might be fake, thanks to ad fraud. It’s what our team also encounters on a daily basis
How common is this threat?
As more businesses are shifting their advertising budgets to the digital realm, the fraudsters are following the money. Data shows that ad fraud can take various forms, from click fraud to impression laundering, and it’s not just small players getting hit. Even big names in the industry are grappling with this menace. The numbers can be staggering, with billions of dollars lost annually to these digital tricksters.
Research says that $172 Billion of ad spend is projected to be lost due to ad fraud by 2028. So, the numbers are huge and they will keep on increasing.
Predicting the future of ad fraud is difficult, you can make educated guesses, but surprises are inevitable. As technology advances, so do the tactics of fraudsters. We might see more sophisticated methods, like AI-powered fraud or deepfake ad engagements, making the landscape even trickier to navigate.
From my perspective, it’s a constant game of cat and mouse. We, as a Fraud Mitigation Platform, need to stay ahead of the curve, adapting our strategies and tech to outsmart the fraudsters.
What are the most common types of ad frauds?
The list is huge. I will highlight only a bunch of them:
Click Fraud: It’s like someone repeatedly clicking on your e-commerce website ad, making it look more popular than it is. But in reality, it’s just fake enthusiasm.
Impression Fraud: Fraudsters use bots to create fake views, making ads seem popular when they’re not. Picture buying a billboard on a deserted road. Even if nobody sees it, you’re still paying.
Cookie Stuffing: Fraudsters sneak extra cookies (data) into your browser, making it seem like you interact with ads you never saw. It’s similar to having unsolicited extra cookies in your jar. Sneaky, right?
Ad Stacking: This type of threat involves stacking multiple ads, but you only see the top one. Advertisers end up paying for all of them, even though you only noticed one which is unfair!
As for the tech behind these tricks, fraudsters use bots and automation to mimic human behavior. They can also hijack devices or use malware to generate fake clicks and impressions.
Ad fraud comes in various disguises, all aimed at tricking advertisers into thinking their ads are more successful than they really are. It’s like a magician pulling off illusions and we are working towards exposing this magician.
What are the common warning signs?
It’s pretty easy to catch a fake ad, if you look at these signs:
Unusual Click Patterns: Keep an eye on your click patterns. If there’s a sudden spike in clicks, especially from unexpected locations or at odd hours, it could be a red flag. Genuine interest doesn’t usually come out of nowhere.
Abnormal Conversion Rates: If your ad is getting tons of clicks but your conversion rates are unusually low, something fishy might be going on. Genuine engagement tends to lead to conversions; otherwise, it’s like having a packed store with no one buying anything.
Low Viewability Rates: If your ads are aggressively promoted but seen by 50% fewer users it’s a sign that something might be off.
High Bounce Rates: If people are clicking on your ads and then quickly leaving your site without engaging further, it could be an indicator of non-human interaction.
Strange Traffic Sources: Keep an eye on where your traffic is coming from. If a significant portion is from irrelevant sources, then it is high time to check your sources.
Inconsistent Engagement Patterns: Watch for irregularities in user engagement. If you see sudden spikes or drops that don’t align with your typical patterns, it’s time to investigate.
Monitoring these signs and setting realistic benchmarks can be your shield against the sneaky tactics of ad fraudsters.
What’s the best way to prevent ad frauds?
Dealing with ad fraud can be tricky, but having the right tools is key. However, selecting these tools poses a significant challenge, as the tools currently available in the market operate as black boxes.
Now, what does “black box” mean? It’s similar to visiting a doctor who tells you that you’re sick but doesn’t explain why. Similarly, many ad fraud tools don’t give enough evidence when they label a source as clean or shady.
ClearTrust on the other hand is a “white box” solution. We firmly believe that the data you share with us belongs to you, so we provide comprehensive, drilled-down reporting when asserting whether a traffic source is bot-driven or legitimate, using an approach that avoids the one-size-fits-all mentality. For instance, if you’re grappling with click fraud, we won’t activate the entire fraud detection system, potentially disrupting your metrics. We activate only the relevant filters to address your specific issue.
ClearTrust offers two solutions: AdRevenue Protect and AdSpend Protect. AdRevenueProtect powers publishers with state of the art filters to mitigate Invalid traffic without impacting ad revenues in real time and thus keep on scaling. On the other hand, AdSpendProtect powers digital media buyers with state of the art filters to mitigate Invalid traffic in real time, thereby keeping campaigns safe and secure.
7 Ways ClearTrust Better Prevents Ad Frauds:
1. A total of 130+ Traffic Scoring filters
2. Flexible Filter Settings (Customize filters campaign to campaign according to your need)
- Setup filters for Individual Advertisers
- Setup filters for Individual Publishers
- Setup filters for a combination of an Advertiser & Publisher
- Setup global filters across all Advertisers and Publishers
3. Pre-conversion/ Pre-Install Fraud Detection (Stop & Mitigate fraud even before the conversion happens)
4. Create and Integrate new custom filters in case any new pattern of threat is identified.
5. Real-time Dashboard
7. Email Alerts for High IVT
Our tool is designed in such a way that it fits into solving any ad fraud situation in the advertising world. Our objective is to keep it simple and real for our customers
What’s the current state of awareness about ad frauds?
The current state of awareness about ad fraud varies, and it often feels like we’re in a tug-of-war between those who are well-informed and those who are still catching up.
On one hand, there’s a growing recognition of the threat, especially among larger advertisers who have been burned by fraudulent activities. However, many businesses, particularly smaller ones, may not fully grasp the depth of the issue, which is why many of our clients tend to fall into both preventive and reactive categories. Some are proactive, taking measures to implement preventive strategies and investing in robust ad fraud detection tools like ClearTrust. Others, unfortunately, become aware only after they’ve experienced the consequences of ad fraud firsthand.
Ideally, businesses should adopt a proactive stance, understanding that investing in prevention is more cost-effective than dealing with the aftermath of a fraudulent attack. Improving awareness is key here, and it requires a concrete effort to educate businesses of all sizes about the nuances of ad fraud and its potential impact on their bottom line, which is one aspect often misunderstood.
Another common myth is that ad fraud only happens to large enterprises. Small businesses may assume they’re not under the radar, but the reality is that fraudsters often target a broad range of businesses.
To stay ahead, I recommend a mix of resources for learning and staying updated. Engaging with reputable blogs, subscribing to newsletters, listening to cybersecurity podcasts, and following informative YouTube channels can provide a well-rounded understanding of ad fraud and cybersecurity trends.
Continuous education is the key to building a resilient defense against evolving cyber threats.
How are ad frauds going to evolve in the future?
Looking into the future, it’s clear that threats are set to become more sophisticated and, unfortunately, more widespread. As technology advances, fraudsters are likely to employ more advanced tactics, such as leveraging artificial intelligence for more convincing impersonations and deepfake engagements. The battle against ad fraud is essentially an ongoing chess match; as defenses fortify, so do the strategies of those attempting to breach them.
In addition to ad fraud, other cybersecurity trends are emerging that could pose significant challenges. With the rise of remote work and an increasing reliance on cloud services, cyber threats targeting remote access points and cloud infrastructure are expected to become more prevalent.
As these trends unfold, our approach at ClearTrust involves continuous innovation and adaptation. We’re committed to staying one step ahead by refining our tools and strategies to counter evolving threats effectively.