Digital marketing has a turnover of about 500 billion dollars per year. It’s therefore not surprising that online ad frauds have increased by an incredible rate these last few years. 2018, ad fraud cost the marketing industry over 25 billion dollars. Soon, that number is expected to reach 100 billion dollars in lost revenue. What causes people to fall in the ad fraud trap? And is the industry proactive enough when it comes to counteracting online ad fraud?

 

The fact that most marketing has made its way to the net is nothing new. Many businesses utilize always-on content as well as targeted campaigns to reach their target audiences, and the selection of channels and products is practically endless. Regardless of if you want to buy an ad spot with a prolific media house, if you prefer to handle your communication via social media or if you favor programmatic advertising, the number of choices have increased explosively the last few years. Unfortunately, this has also opened new possibilities for fraudsters to gain revenue from online ads. However, even though so much money and content are in circulation, there’s still a glaring lack of industry knowledge when it comes to these types of frauds.

There are several different ways a fraudster can access advertisers’ money by making them believe their ad is live, even though it’s not.

 

Tricking the Advertisers

A common fraud method is selling fake domains, which are then incorporated into the programmatic network. This is called Domain Spoofing and tricks the customer into believing they are bidding on ad spots on a particular site, while the ad is actually visible on another one. Financial Times is a blatant example of this; a few years ago, the media giant lost about 13 million dollars – a month – in ad revenue to fraudsters, who defrauded advertisers by setting up an identical copy of the Financial Times site.

 

Pixel Stuffing is another common way for fraudsters to access ad revenue. This involves publishing pixel-sized versions of ads on a site, while attracting advertisers who believe their content will be full-size. By doing this, the ad still racks up views, despite not actually being visible to the naked eye.

 

A similar method is Ad Stacking. This involves stacking several ads on top of each other and registering views for each one, even though only one ad is visible to the reader. So called Geo Masking tricks the advertiser into believing that their ads are visible in a certain region, while in truth, it’s displayed in a very large area. The fraudster will then present the advertiser with false numbers. Finally, there are several types of bots aimed at harvesting ad revenue.

 

Peter Machké, media expert at Sweden’s Advertisers, recently commented on the ad fraud phenomena in the newspaper Dagens Media.

 

He ascertained that the overall knowledge surrounding ad purchases varies, but many businesses have turned to alternative ways of buying digital marketing services rather than utilizing programmatic platforms, simply to avoid fraud. Some handpick relevant sites when buying programmatic ads, while others only use a list of marketing companies recommended by Sweden’s Advertisers. A third trend is completely opting out of programmatic advertising, and instead going straight to the source – the publicists. He encourages advertisers to focus on ad performance and ensure they don’t buy into deals with views or clicks that seem unreasonable.