Article

How Does Ad Fraud Affect Marketers?

The question “How is ad fraud impacting the stability of digital advertising?” is very common among most marketers. Each year, fraud forms a crucial part of why it is so difficult for businesses to set realistic budgets and targets for their digital advertising spending. It is an unfortunate - widespread concern.

Businesses should be confident in what their growth budget will be. After all, digital ad spend is now the only form of effective media spending that reaches the end consumer, without which companies cannot effectively reach their target audiences other than resorting to old-fashioned, unsustainable practices of customer acquisition and conversion. Not cool, ad fraud. Not cool!

The threat of online ad fraud is as grave as it is challenging to solve. But there are two clear camps: the fraudsters and those fighting them. In this article, we’ll shed light on how ad fraud affects marketers, a few variations of the malicious activity, and how you can help your company combat it.

 

Types of Digital Ad Frauds

  1. Hidden ads.
  2. Auto-refresh ads.
  3. Domain spoofing.
  4. Impression/click bots.
  5. Ad injection.
  6. Click farming.
  7. Click flooding.
  8. Install hijacking.

Note: Learn more about each of the above here.

 

How Online Ad Fraud Is Costing Marketers?

 

Monetary implications 

Digital ad fraud has been around for decades. It has been almost a universal truth with the evolution of digital advertising and responsible for just enough billions of dollars in lost revenue to make corporations nervous. 

In 2018, the US Department of Justice dismantled two international cybercriminal rings that caused tens of millions of dollars in digital advertising fraud. eMarketer, a market analysis company that provides insights and trends related to digital marketing, placed the problem within $6.5-19 billion in 2019 alone — a gap range that further highlights just how odd a concept ad fraud is. 

As we look back now, and in a year that is hastily receding in our rearview mirrors, we can see the amount of yearly global ad fraud rapidly rising to the $100 billion projected by the German research company Statista. Spider AF analyzed over 1.09 billion ad impressions in the first six months of 2021 alone, and… well, let’s save you the numbers and share our most recent ad fraud whitepaper instead.

These are real numbers of a real issue. Craig Silverman, referring to global ad fraud, quoted a critic of the ad industry so succinctly: “Nobody knows how bad it is and nobody wants to know.”

 

Brand reputation 

For advertisers, brand reputation can be more valuable than any business metric or financial return — perhaps even more valuable than money itself. If brands lose consumer trust, they lose everything.

Brands must monitor the third-party websites on which their ads display. The association of violent-cheering, adult-themed, or misinformation-related content with your brand will send your reputation tumbling. 

The business journalist Matt Palmquist cautioned companies to watch out for themselves as the internet isn’t always so friendly:

Websites that propagate misinformation often try to add credibility to articles by placing mainstream ads next to them. The tactic is possible because many large brands advertise through third-party or automated platforms. As a result, marketers lose control over ad placement, and brand ads can appear next to fraudulent content that does not reflect, or that even conflicts with a firm’s values.

Ad fraud already makes it difficult for advertisers to understand the complexities of their web-based performance (details below), throw in risks of brand damage and you have the recipe for chaotic business operations.  

 

Gobbled-up data 

Data can be costly. It is costly. Companies often sweat over spreadsheet cells trying to make sense of patterns and later spend significant hours examining these recorded data.

These activities cost time and energy. And once the initial data is wrong, everything else that follows is mostly a waste. Sadly, this cycle precisely defines the operations of many marketing teams. 

Fraudsters not only siphon money from advertisers while tarnishing the image of innocent brands, but they also distort the core tenet behind every marketing operation: gaining insight through data. 

If your company records one million visits from ads, for instance, and without realizing that most of them are from bots on a random computer, any change you make to your business model reflecting the fraudulent traffic is almost certain to backfire.

 

How to Combat Ad Fraud?

Raising awareness 

For starters, more advertisers need to see ad fraud as a problem. Ad industry experts need to be more proactive. When companies recognize their ad spend isn't being optimally accounted for and that fraud causes customer trust to erode and business to cease, the businesses will be more apt to pressurize fraudsters to clean up their foul act. 

 

Using effective tools 

Anti-ad fraud tools provide an excellent highway for businesses to both protect their brands and play a role in curbing this menace. These tools take the guesswork out of ad fraud analysis, giving you a clear picture of what is transpiring behind your ad campaigns. Spider AF, as an example, is an advanced tool that prevents fraud from polluting your metrics and wasting valuable ad budget by detecting and eliminating them before they strike. Try it free for 30 days!

 

Looking ahead 

The last crucial step is for marketers to keep up with advances in ad fraud. The onus is on you and us to continually adapt to the ever-changing market dynamics and identify the new ad fraud tactics before they escalate to become raging monsters.

 

Conclusion 

Ad fraud can happen to anyone including big names across any industry you can think of. We’ve seen how it scourges advertising funds, risks brand image, and stifles the operational efficiency of other marketing operations. Implement a fraud-prevention system that can stop fraudsters in their tracks to help guide your brand through the murky waters of this menace.