The True Extent of Online Ad fraud

Half of all online ads are never seen by a human. The culprit? Organised crime…and it’s costing the industry $7.2 billion a year.

Organised crime. It exists as a shadowy, near-mythical activity in our minds – reserved for the likes of Walter White, Mexican drug cartels and Martin Scorsese films. But according to the latest reports, organised crime has gripped online advertising in the form of ad fraud.

Fraudsters are using a variety of tricks to scam businesses and avoid showing adverts to real human beings. Naturally, this is costing the industry a stupendous amount in wasted advertising expenses. In fact, it has already cost businesses $7.2 billion. But what is this latest form of cyber fraud? More importantly, how can we fight it? Digital Dialog explores one of the advertising industry’s greatest challenges yet.

How are criminals conning the industry?

Like any criminal, ad fraudsters have a wide range of weapons in their arsenal. But the chief perpetrator is bot traffic. Simply put, fraudsters infect computers through viruses or malware. These infected computers then mimic human activity, ‘viewing’ adverts and posing as genuine human traffic. This NHT (Non-Human Traffic) can then be sold to oblivious marketers.

Other methods include…

• Pixel Stuffing – Instead of displaying ads normally, multiple ads are packed into useless, barely-visible 1-pixel spaces on websites
• Ad Injectors – Extensions or browser toolbars ‘inject’ undesired advertisements on to websites for free, slowing websites, damaging reputations and depleting ad budgets in the process
• Domain Laundering – Instead of displaying ads on legitimate sites, fraudsters display them on disreputable, often-illegal websites with pirated content
• Phony Traffic – Fraudsters send bots to a site, artificially increasing traffic numbers – leaving site owners entirely ignorant

Regardless of the method, everyone gets bitten by ad fraud at the end of the day – from brands through to advertisers and their reputations. As comScore’s NHT report says, ‘the bad guy gets rich – everyone else gets hurt’. This problem isn’t particularly rare or unusual, either. In fact, according to Samuel Scott at Moz.com, only 8% of ads actually have the chance to be seen by a human.

Clearly, something has to be done. But what, exactly?

For the problem to be fixed, an industry-wide approach has to be applied. In the UK, the Joint Industry Committee for Web Standards (JICWEBS) has already been formed to encourage good practice for companies within the industry. There are also a variety of anti-fraud companies that can help your agency beat ad fraud.

However, as a marketing or advertising agency, you can also take steps to overcome ad fraud yourself.

How can you limit ad fraud?

Ad fraud, from our experience, is a tricky thing to overcome entirely. But there are a variety of steps you can take to ensure your advertising platforms are as fraud-free as possible. Common advice to advertisers include staying up-to-date with ad fraud and potential threats within your advertising operations. Other advice includes:

1. Monitor traffic with reliable third-party tools.
2. Demand transparency from your publishers regarding advertising locations and where they source their traffic.
3. Budget properly for security and anti-fraud.
4. Declare your anti-fraud standards to all your partners.

Despite the above challenges, at Digital Dialog, we believe that programmatic display advertising will continue to remain within many marketers’ toolkit however with the growing threat of ad fraud, everyone – from brands to advertisers – must become more informed, aware and equipped to handle the problem if they wish to continue benefitting from it. It is only together that the industry will be able to move forward and minimise the growing threat of ad fraud.