The Scary Truth About Ad Fraud -And What Adtech can do about it

With extreme competition gripping the industry, and technology acting as a strong enabler, ad spending is at an all-time high. Marketers across the world are making unprecedented investments in online spending; according to eMarketer, digital ad spending in the US will soon exceed traditional ad spending, and by 2023, will outdo two-thirds of total media spending.

Yet, advertisers lose $51 million a day on ad fraud, which adds up to well over $19 billion in wasted ad spend each year. Fraudsters and an army of bots are lapping up ad impressions and advertising dollars at an alarming rate. According to the World Federation of Advertisers, by 2025 online ad fraud will become the second largest source of criminal income in the world.

But there’s a way out. Modern adtech with the help of programmatic advertising can enable advertisers to detect fraud and also prevent it. Let’s look at how ad fraud is affecting the marketing world, and how adtech can help overcome it.

The scary truth about ad fraud

Click fraud. Ad stacking. Domain spoofing. Pixel stuffing. False advertising. The sheer size of the ad market drives fraudsters and hackers into leveraging modern technology and techniques to steal money from advertisers.

The scale and pace of fake advertisings and fake traffic is unimaginable. In 2018 alone, a massive ad fraud scheme involving more than 125 million Android apps and websites tracked human resources and used the data to feed bots. The fraudulent bots then mimicked human behaviour, generated fake ad views, and stole close to $10 million from ad networks and partners. For any ecosystem, such a situation is unsustainable, and the consequences far-reaching:

  • The primary consequence of ad frauds is skewed advertising data. Garnering a lot of traffic and clicks but little or no conversions can destroy an ad campaign altogether.
  • It could cause the cost of conversion to skyrocket and reach a point where it is no longer profitable to run the ad anymore.
  • As hackers become more and more sophisticated, ad fraud is becoming extremely difficult to identify; the longer it takes to detect and investigate, the more money is lost.
  • Perhaps hardest to stomach is the impact on the bottom line; many companies are seeing substantial drops on CPM due to ad fraud.
  • Ad networks also run the risk of getting a bad name, which will invariably affect the relationship with publishers and advertisers.
  • Companies and brands depend on ads to get visibility and acquire customers. The opportunity cost of not getting in front of genuine prospects and customers could be catastrophic.
  • Fraudulent activity can drive malware to infect millions of mobile phones and computers in the blink of an eye. That apart,the money earned from ad fraud can fund crimes that are difficult to trace.
  • When unchecked, ad fraud could lead to serious legal issues.

How Adtech can help overcome ad fraud

With the prospects of a high payout, low risk, and comparatively little effort, it’s easy to see why there is a sudden surge in criminals looking to profit from ad fraud.If you’re in the digital advertising industry, you are almost certain to be impacted by ad fraud.

Whether you have been directly affected or not, now is the time to do something to protect your business from ad fraud. You can prevent it from happening and adtech can help;

  • Adtech can improve the transparency of the digital ad ecosystem and ensure that advertisers, publishers, and agencies are more confident about detecting and blocking ad fraud.
  • By combining the power of data and technology, organizations can leverage best-in-class analytics algorithms and geocoding to address the ad fraud challenge.
  • It can enhance the ability of advertising platforms to target audiences correctly and detect fraudulent ad activities ahead of time.
  • Ad tech can also compare traffic data with previous campaign data to understand how fraud is being propagated.
  • Organizations can use large data sets to understand which networks are receiving the greatest volume of traffic fraud. They can better target stronger ad fraud practices that strengthen core campaigns and drive better results for clients.
  • What’s more, technology such as blockchain can bring in much-needed visibility into conversions and allow ad impressions to be closely monitored, tracked, and recorded.
  • The creation of a global ad blockchain can detect and eliminate fraud nearly instantly. Organizations can add an extra layer of transparency to the ad buying process, and spot fraudulent traffic in time.

Claim the upper hand

With online criminals adopting the latest technologies to do their dirty work, ad fraud and false advertising is causing damages to the tune of billions. According to areport, every $1 out $3 spent on digital advertising may be going into the pockets of fraudsters.

Despite the availability of fraud detection methods, fraudsters are finding new ways to exploit the system. But there’s a way that advertisers can hit back. By embracing the latest adtech, ad fraud can be countered at the same level of sophistication.

The good news is that through analytics, intelligence, and greater transparency, organizations can build future-ready ad-stacks to grab better control over their ad campaigns. They can claim the upper hand over ad fraud.