Ad fraud is a big problem, bigger than most advertisers
realize. The collective cost of ad fraud paid by advertisers in 2022 is
estimated to be $81 billion. This number is expected to touch the $100 billion
mark by the end of this year. Ad fraud is a lucrative business?
Fraud is so prevalent that some estimates say that $1 of
every $3 spent on digital advertising is snatched by fraudsters. 1 in 4 Android
app installs is fake, and the numbers are even worse in the case of iOS.
Protection against ad fraud is only possible with prevention, and prevention starts with awareness. In this article, we will learn about the different techniques that fraudsters employ to make money with ad fraud. Before that, let’s take a quick look at the definition of ad fraud:
What Is Ad Fraud?
Ad fraud is the act of defrauding ad networks and advertisers to make financial gain. Experts believe that ad fraud is just as old as PPC advertising. Fraudsters employ botnets, malware, and even real humans to commit fraud and make millions of dollars in the process. One of the most famous recent examples of this is the case of Methbot, a malware that was making its creators as much as $3 million every day.
Difference Between Content-Driven Ad Fraud and Device-Driven Ad Fraud
While fraudsters employ several different techniques to commit digital ad fraud, all of them can be categorized into the following:
Content-Driven Ad Fraud
Content-driven ad fraud involves the use of fake websites
and smartphone applications to commit fraud. These fake properties are listed
on ad networks and often chosen as publishers by unsuspecting advertisers.
Such websites and apps are fake in the sense that they often don’t have any real content and are filled with ad spaces. Naturally, such websites never attract any human traffic. These are visited exclusively by bots that are trained to mimic human behavior. These bots are then used to click on the ads appearing on these fake websites.
Device-Driven Ad Fraud
Device-driven advertising fraud, as the name suggests, involves the use of physical
devices that can connect to the internet, like computers, smartphones, and
tablets.
Bots installed on such devices generate fake impressions and clicks on ads. Since these ads often appear on properties owned by scammers, do they end up making money off these impressions and clicks?
Common Ways Fraudsters Steal Advertiser’s Money
As mentioned above, fraudsters may employ a variety of techniques to commit fraud. Some of the most pervasive ad fraud techniques include:
1. Click Spamming
The most common click fraud method is click spamming involves a malware-laced app installed on a
real user’s device. Such apps are usually the ones that keep running in the
background, such as a torch app or a device cleanup app.
In the background, the bots hidden within these apps generate impressions and clicks on hundreds of ads, making money for the fraudsters. Most users remain unaware of the fact that their device is infected with malware or that it is being used to commit fraud.
2. Click Injection
Click injection is a type of fraud that is limited to
Android devices. This is because Android apps send out a sort of ‘broadcast’
just before they are downloaded by an authentic user. Fraudsters take advantage
of this and ‘inject’ a click, right before the download commences.
This results in the fraudsters getting credit and the subsequent reward for the download. Yes, this also means that the fraudsters steal the credit from an authentic source that drove the download.
3. Pixel Stuffing
Pixel stuffing is the practice of stuffing ads in a 1X1 pixel. This pixel is usually too small to be noticed by any visitors to the website. However, for every visitor on the website, the publisher gets paid for the ‘impressions’ on the ad.
4. Affiliate Fraud
Affiliate programs are dependent on tracking the source of a visit for their success. To that end, these programs use cookies to track visitors. Fraudsters exploit this practice by placing cookies within user browsers without their knowledge. As a result of this, the scammers get the credit and the reward for all the visits tracked using these cookies.
5. Install Farms
Install farms are physical organizations, usually located in developing countries. Such fraudulent organizations hire cheap labor and hand them smartphones and tablets with the instruction to click on ads and download applications. For each download, the fraudsters change their IP address, making each one look like a unique and authentic download initiated by a real user.
6. Domain Spoofing
Domain spoofing refers to the practice of using a
low-quality website to mimic a high-quality one. This is usually done by coming
up with a domain name that is very similar to the name of the high-quality
website.
If a visitor, while typing in the name of the website,
makes a mistake with the spelling, they end up on the fraud website. The
fraudulent website then makes money off the impressions and clicks it gets from
such visitors. However, since these visitors originally meant to visit a completely
different website, their impressions and clicks rarely have any commercial
intent behind them.
In other words, the clicks and impressions on such websites are almost always useless from the perspective of an advertiser. Yet, the unsuspecting advertisers end up paying for them.
How Can Advertisers Save Their Ad Spends?
Many advertisers assume that their interests are being
protected simply by choosing reliable ad vendors and platforms. While that is
one piece of the puzzle, it is far from ensuring holistic protection of your ad
budgets.
The responsibility of protecting your ad budget falls on your shoulders as an advertiser. This is where an ad fraud solution becomes necessary. Such a solution, like the one which can provide holistic protection against fraud. Using AI and ML algorithms, the solution ‘learns’ about the behavior of fraudsters and bots including sophisticated fraud patterns, and flags fraudulent activity in real-time.
Conclusion
There you have it- all you need to know about how fraudsters
make money with ad fraud. While there is a lot that fraudsters can do to commit
fraud, the good news is that the same is true for advertisers. With awareness,
proactive action, and active vigilance, advertisers can ensure they get the
full return on their advertising investments.
