Cost of global ad fraud could top $30 billion.

The advertising technology space has evolved tremendously over the past few years with many rapid advancements in the sector. One of the banes that has come from this advancement is ad fraud. It has become an incredibly widespread problem for digital marketers and publishers across the globe.

Global ad fraud is predicted to cost an unprecedented $23bn this year and could reach $30bn including indirect economic and social costs, according to the report ‘The Economic Cost of Bad Actors on the Internet, Ad Fraud 2019,” by cyber security company Cheq.

The World Federation of Advertisers estimates that up to 30% of advertising is unseen by consumers, affecting about 21 trillion online ads annually.

Ad fraud is a modern-day epidemic globally and the fact is that there is no single way to tackle the menace of it, implies the industry has to work together to solve the problem. According to a report from TrafficGuard called “Addressing Ad Fraud through Multipoint Analysis & Machine Learning” approximately one in 13 app installs generated in the APAC region in 2018 were not installs from genuine users.

So why is this industry so rife with fraud? A lack of regulation is one reason, but another is much more inherent to advertising: complexity.

Take it from Per Bjorke, a senior product manager who leads Google’s ad traffic quality team. “It’s very simple. The future growth of Google and other companies hinges on the fact that online advertising is trusted, and that there will be a return on investment on ad budgets,” he told CyberScoop, which Cheq then cited in the report. “It’s very important for us because people could stop investing in advertisements.”

As a report from ZEEBUSINESS.COM :

Indian marketers to lose $350 million to mobile ad fraud in 2017.

Mobile ad fraud in India is one of the highest in India due to the high adoption and use of smartphones and the start-up ecosystem flushed with funds.

Ad fraud in India is about 50% higher than the global average, India ad fraud is 2.4 times as high as the rest of the world.

When it comes to mobile app install fraud in India ranks one of the highest with 16.2% of it being fraud. India came in at tenth spot in terms of mobile app install fraud in the world.

According to the report as India is an exploding market for mobile, the country is adding new smartphone owners faster than any other market on the planet.

As a result of mobile ad fraud Indian marketers and advertisers would lose $350 million of their marketing spends to fraudsters, says the report.

Another news which has caught the eyesight of the business world is :

 “ TIK TOK triples the audience in three months ”

The global phenomenon TIK TOK, in three months has recorded an exponential growth in Italy both in terms of unique users and overall time spent……

Now, What is Click Fraud ?

Click fraud is a type of fraud that occurs on the Internet in pay-per-click (PPC) online advertising.( PPC stands for pay-per-click, a model of internet marketing in which advertisers pay a fee each time one of their ads is clicked. Essentially, it’s a way of buying visits to your site, rather than attempting to “earn” those visits organically. E.g. Google AdWords) In this type of advertising, the owners of websites that post the ads are paid an amount of money determined by how many visitors to the sites click on the ads. Fraud occurs when a person, automated script, or computer program imitates a legitimate user of a web browser, clicking on such an ad without having an actual interest in the target of the ad's link.

Bots don’t care about ad fraud, but they cause it

Ad fraud is only one of many reasons the bad guys create bots. In fact, last year more than 42% of all internet traffic came from bots, and most bots are not involved in ad fraud. If you create content, chances are someone has written a web scraping bot to steal that content from you and monetize it for themselves. Sites that have a paywall are an even bigger target.

Bots aren’t just wasting your advertisers’ money, they’re hurting your bottom line as well. While bots can watch videos and click on ads, sometimes on purpose and other times as an unintended consequence, they don’t ever convert or make real purchases. Filtering bot impressions produces higher click-through rates, increasing campaign conversions. The same applies to your audience segments as well. When your inventory performs better, advertisers buy it more often.

Mobile Apps and Ad Fraud

Mobile apps are becoming another increasingly lucrative target for fraudsters. This is mainly because ads in mobile apps are rarely blocked by ad-blocking software. Also, Android is generally considered more vulnerable to attacks due to its open-ended architecture which, coupled with the reach and size of the ecosystem, makes a very attractive and easy target for the fraudsters.

What are the other techniques ??

• 1.    Invisible and Hidden Ads.
• 2.    Impression laundering
• 3.    Hijacking Ads
• 4.    Hijacking Clicks
• 5.    Popunders
• 6.    Bots Traffic
• 7.    Methbot
• 8.    Fake users
• 9.    Fake Installs
• Attribution manipulation.

How Is Ad Fraud Detected?

Stopping advertising fraud completely is hard. With scammers getting increasingly sophisticated, it’s impossible to suggest that ad fraud can be completely stopped but there are ways for companies to mitigate the problems.

Below is a list of the main ad-fraud detection companies:

1. ·        Fraudlogix
2. ·        White Ops
3. ·        Forensiq (now part of Impact)
4. ·        DoubleVerify
5. ·        Integral Ad Science
6. ·        Pixalate

The above ad-fraud detection vendors can be used by companies on both sides of the programmatic ecosystem, including demand-side platforms (DSPs), ad exchanges, ad networks, and supply-side platforms (SSPs) to detect and block this fraudulent activity during real-time bidding (RTB) media buys.

It’s a constant arms race between online ad fraudsters and ad technology companies trying to prevent these types of fraud – similar to the war between hackers creating computer viruses and antivirus software companies.

Ad fraud is a serious problem permeating the advertising industry, and the losses it causes are skyrocketing. At the same time the mechanisms to detect fraud are mostly ineffective. But it doesn’t mean that advertisers should just throw in the towel.