NS8 : Digital Ad Fraud – What You Need to Know

Every company that invests in digital advertising has likely been victim to some form of ad fraud, yet, many fail to realize the extent of the problem. According to Datorama, nearly 11.5 percent of display impressions are fraudulent, while fraudulent impressions on video ads are at almost 16 percent. In fact, large ad networks, including Google, have admitted to issues with ad fraud, so this is a known problem among big companies.

But why is there so little information about it available?

Part of the problem is that no one can agree upon who is responsible for stopping ad fraud. While ad networks, publishers, and demand-side platforms (DSPs) argue over the who is in the best position to eradicate this threat, companies are often left to fend for themselves. Larger corporations can have whole departments dedicated to this, with specific teams in charge of managing their advertising campaigns and minimizing the impact of ad fraud.

However, most eCommerce businesses simply do not have the resources to do that and assume that the oversight by ad networks monitoring for bot traffic will be enough.

But is it?

 

Recent Examples

A WhiteOps report estimated the cost of ad fraud to be around $6.5 billion globally in 2017, affecting companies of all sizes in a variety of industries. Over the last few years, there has been a recent uptick in coverage about ad fraud due to a few high-profile cases that allowed advertisers to see how widespread the problem really was. These include:

Google

In 2017, it was announced that Google would be refunding certain customers using their DoubleClick Bid Manager to buy advertising. The stated reason was ad fraud, specifically targeting video ads, but Google gave no further information on the scope of the fraud or who specifically was affected. In fact, in AdAge, a digital media executive is quoted as saying that, “Nobody knows the type of fraud that went down”.

Because the process of digital advertising is mostly automated and has so many different parties involved, fraud is easy to commit – and highly lucrative. Google has now put some safeguards in place on their platform, allowing customers to receive refunds for ads served to bots. However, fraudulent publishers can still get through, which is particularly problematic when the publisher is one you should be able to trust.

Newsweek Media Group

At the beginning of 2018, Newsweek Media Group (NMG) came under fire for having code on some of their websites that inflated ad impressions by blocking advertisers’ ability to segment legitimate customers from bot traffic. This caused advertisers to be overcharged for the campaigns run on these sites, which included several International Business Times websites.

After initially denying the allegations, NMG admitted to the code being present after DoubleVerify, which authenticates digital media, announced that it had found the code in question.

Following the news, several advertising networks announced that they were dropping the publisher from their network, and NMG stated that it would be working with an independent accreditation company to clean up its advertising on all sites. However, publishers like this are just one component of a much bigger problem.

PopAds

Buying and selling website traffic is not illegal, but it is problematic. Another factor that impacted the fraud at NMG was their practice to legally buy bot traffic from companies like PopAds. PopAds is able to cheaply sell traffic to help NMG and other publishers boost their analytics, and these boosted analytics cause ad networks to put a higher dollar amount on bids for these sites – prompting advertisers to pay more by defrauding them.

Companies think they are paying these publishers for high-quality and high-quantity traffic that leads to conversions, when in fact they are often paying for low-quality traffic and sometimes even bots. Due to a lack of regulations, these companies continue unabated and exist throughout the digital publishing industry.

But How Does Ad Fraud Work?

This question is complicated because there are many different forms of digital ad fraud. The most common form is when fraudsters use bots to get paid for impressions and clicks on advertisements that are never seen by a human.

This type of fraud is often masked for two reasons: there are millions of bots traversing the internet every day, and malicious bots have gotten better at acting like humans.

When media buyers bid on digital advertising space, they use analytics to make decisions on where to place their ads. They are looking for specific brands or segments of consumers to target. While some advertisers do buy directly from publishers, most use an ad network, like Google, AppNexus, or SpotX. These networks make it easy to purchase from multiple advertisers at once.

This system allows some fraudsters to take advantage by creating low-quality sites and selling them as high-value inventory. Instead of real users, the ads are then traversed by thousands of malicious bots that eat away at a company’s ad budget little by little until it is completely drained.

This can be especially damaging when companies have no way of telling the difference between bot and human impressions because these types of campaigns can appear to be successful, with high rates of impressions and clicks. Unknowing companies then reinvest, wasting even more precious ad dollars.

Since malicious bots used for ad fraud often masquerade as humans to get tagged for remarketing, businesses need a way to monitor traffic on both their site and their ads to separate out the fraudsters.

 

Monitor, Recognize, Adapt

Good fraud prevention measures start with good data. Audience segmentation is particularly important, allowing companies to see when bots are interacting with their content. In other words, the more information you have about your audience, the better you can position your digital campaigns to have the strongest effect.

In addition to knowing what is happening, be ready to adapt to fix the problems. As advertising fraud grows more sophisticated, so too do the prevention methods. Users need to stay up-to-date with new tools that can help them create more effective campaigns and be willing to change things up if a particular method fails to work.

 

Summary

You could be losing money in your advertising campaigns without even knowing it. Relying on ad networks and publishers to provide the data you need for analyzing the quality of your campaigns could be a risky venture. However, by varying your advertising strategy and investing in the right tools to detect bot traffic, you can help your company make the most of every campaign and minimize your fraud risk.

The EQ8 scoring engine which is used by NS8 Protect (available in the PrestaShop Addons Marketplace), was built specifically to help companies understand which advertising campaigns are prone to fraud. To learn more about how this product can help you optimize your campaigns as well as what else it can do, click the link below.