Clicking Your Budget Away: The Problem With Digital Ad Fraud

Digital ad fraud has a new price tag and it isn’t pretty. A recent study from Distil Networks, a digital security company, reports that digital ad fraud costs the industry a total of $18.5 billion each year. Distil predicts that digital spending will reach $56 billion by the end of 2015. Which means that for every $3 spent, $1 is going to ad fraud and online ad fraud now accounts for one third of US digital ad spend.

Digital ad fraud occurs when software is employed by scam artists to generate fake traffic and clicks on sites. Fake traffic costs advertisers real money, and the price they pay for clicks that humans don’t interact with isn’t just monetary. They are also left with skewed data and a misunderstanding of how successful a campaign is, which is an incalculable consequence.

Here’s how it works. Entire networks of bots are created to appear like real humans. They install themselves on people’s personal computers and then browse the internet, just like any other person. The bots’ active browsing history begins to make them look like the real consumers that advertisers then pay to reach. A common way con artists profit from this practice is by directing bots to visit websites they themselves own. The scammers then sell ads to companies who are interested in advertising on their website. The companies paying for the ads end up spending most of their advertising budget on bot clicks instead of real engagement.

Ad fraud also occurs when websites that sell ads promise advertisers a certain amount of traffic in a set time period. If it doesn’t look like the ad will get enough traffic before the deadline, publishers will pay firms or other websites who promise to deliver even more traffic. Unfortunately, many of these companies also use bots to increase traffic.

In the meantime, paying closer attention to analytics is the first step advertisers need to take. Advertisers who monitor their analytics closely are much more likely to detect fraud and take action against it. Another great way to prevent fraud is to measure engagement that can only come from humans, like paying for something with a credit card. If the value of clicks and views decreases, there will no longer be a reason for the fraud to exist at all.