GUIDES
by Roman Vrublivskyi
Posted on Sep 11, 2023
Protect Your Ad Spend: The Importance of Ad Fraud Detection
by Roman Vrublivskyi
by Roman Vrublivskyi
Digital advertising is a critical tool for businesses to reach and engage with their audiences. However, ad fraud poses a significant challenge, artificially inflating metrics and misdirecting advertising budgets.
In a blog post, we offer a clear overview of ad fraud, explaining its impact and the importance of detection methods.
As more brands make the shift to online platforms to drive customer acquisition, the risk of encountering ad fraud — a deceptive practice that misrepresents online ad impressions, clicks, or conversions — becomes all the more prevalent.
By understanding and combating ad fraud, businesses not only protect their investments but also ensure they are reaching their desired audience in meaningful ways.
Below, we delve into five key benefits of building an ad fraud prevention process.
Prioritizing the prevention of ad fraud not only protects a brand’s financial investments but also fortifies its relationship with genuine customers.
| Business type | Common fraud types | Examples |
| Mobile app developers | Click spammingAction fraudFake installs | Fake clicks from bots, sudden spikes in app installations with no following user engagement |
| E-commerce platforms | Click fraudGenerating fake accounts | Clicks by bots without purchases, generation of fake accounts to exploit promo offers |
| Digital medial outlets | Ad stacking Pixel stuffingCookie staffing | Multiple ads layered on top of each other, unseen ads crammed into one pixel |
| Gaming platforms | In-game purchase fraudBot farming | Fake users making fraudulent in-game purchases, bots making in-game actions to earn in-game currency |
| Video streaming services | Video ad fraud Invisible ads | Playing video ads off-screen or in rapid succession without genuine views |
| Social media platforms | Fake account activityBot likes | Fraud bots creating fake profiles, generating likes and comments to artificially boost posts. |
This table provides a snapshot of how different businesses might be targeted. It’s worth noting that as technology evolves, the methods employed by fraudsters also change, so it’s crucial for businesses to stay updated on the latest in ad fraud tactics and ad fraud prevention methods.
Ad fraud manifests in various forms, each designed to exploit digital advertising channels. Let’s dissect a few common methods fraudsters employ to deceive advertisers and divert campaign budgets.
Definition: Click fraud is a deliberate act of clicking on pay-per-click ads, either manually or using automated scripts, without any intention of exploring the associated offering.
Implications: Advertisers incur costs for each click on their ads. Illegitimate clicks inflate advertising expenses without corresponding returns in terms of genuine user engagement or sales.
Prevention strategies:
Definition: Ad stacking occurs when multiple advertisements are layered on top of one another within a single ad slot. While only the topmost ad is visible to users, interactions with it can register as engagements for all underlying ads.
Implications: Advertisers are charged based on the premise that their ad has been adequately displayed and had the chance to engage users, when in reality, it may have been obscured entirely.
Prevention strategies:
Definition: Bot traffic encompasses the interactions originating from automated scripts or programs, often designed to simulate human behavior online. This can involve browsing websites, clicking on ads, or even completing transactions.
Implications: Advertisers might be misled by inflated engagement metrics, interpreting bot interactions as genuine human interest and engagement, leading to skewed marketing data and wasted ad spend.
Prevention Strategies:
Definition: In pixel stuffing, advertisements are forced into minuscule spaces (often just 1×1 pixel in size) on a webpage. This technically counts as the ad being displayed, despite it being virtually invisible to human users.
Implications: Advertisers pay for impressions believing their ad is being viewed by potential customers, whereas the ad’s visibility is practically nil, rendering the impression valueless.
Prevention strategies:
Definition: Domain spoofing involves misrepresenting or masking the domain where an ad is displayed. Fraudsters make it appear as though their less reputable site is a widely recognized and credible site.
Implications: Advertisers believe they’re placing ads on premium, high-traffic websites, but in reality, their ads may be shown on low-quality or irrelevant sites, harming brand integrity and resulting in inefficient ad spend.
Prevention strategies:
By being proactive and utilizing these strategies, advertisers can better guard against ad fraud, ensuring their campaigns reach genuine users and achieve desired outcomes.
In the evolving digital landscape, businesses are consistently seeking ways to engage their audiences effectively. However, the prevalence of digital and mobile ad fraud poses significant obstacles, impacting the efficacy of digital advertising campaigns and the integrity of the brands involved. Below are some primary challenges associated with ad fraud:
Advertisers allocate budgets to online campaigns expecting genuine user engagements and digital advertising fraud tactics artificially boost engagement metrics, making campaigns appear more successful than they are.
As a result, businesses end up overspending on ineffective campaigns. This means a higher cost-per-acquisition (CPA) and reduced return on ad spend (ROAS), which can strain marketing budgets and reduce overall profitability.
Decisions around future ad spend, targeting, and strategy are often based on previous campaign data. Ad fraud skews this data, painting an inaccurate picture of campaign performance.
With corrupted data, businesses might allocate resources to channels, demographics, or strategies that aren’t genuinely effective. This not only wastes resources but can also cause missed opportunities in genuinely profitable avenues.
When ads appear on low-quality, irrelevant, or malicious sites due to domain spoofing or fraudulent placements, the association can harm a brand’s reputation. Customers might end up questioning the advertiser’s integrity or product quality, leading to decreased trust and potential loss of loyalty.
Over time, it’s becoming more apparent why a white-label platform and ad operation team are great solutions for mitigating ad fraud challenges. That’s why more brands rely on platforms like SmartHub: a cutting-edge white-label ad platform, equipped with a robust ad fraud management and prevention toolset.
Our value proposition is rooted in three core tenets:
To truly assess the full range of use cases offered by SmartHub solutions, explore our case studies.
The digital advertising landscape holds immense potential for businesses looking to expand their reach. However, this promise comes at the risk of ad fraud that can compromise the effectiveness and integrity of online campaigns.
Using ad fraud detection technology isn’t just a technical necessity — it’s a strategic imperative. Businesses that prioritize fraud prevention not only safeguard their financial resources but also uphold their brand’s reputation, ensuring genuine engagement with target audiences.
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