Anura PR Team
TL;DR: This chapter explores the various types of ad fraud threatening advertising campaigns, providing insights into their mechanisms and impacts.
- Click Fraud: Involves inflated clicks on PPC ads through botnets or click farms.
- Domain Spoofing: Creates fake websites that mimic legitimate ones to generate fraudulent clicks.
- Ad Injection: Injects unauthorized ads into websites via malware.
- Impression Fraud: Uses techniques like pixel stuffing and ad stacking to inflate ad view counts.
- Affiliate Fraud: Generates fake commissions through deceptive methods like lead fraud.
- Mobile Ad Fraud: Includes tactics like click injection and SDK spoofing, targeting mobile advertising budgets.
- Programmatic Ad Fraud: Involves manipulation of automated ad buying, leading to misplacements and budget drains.
Ad fraud is a shady business. Behind every corner lurks many different types of ad fraud ready to siphon off budgets and skew data when the opportunity presents itself.
From the well-known click fraud to the less visible impression fraud, each type poses unique challenges that can affect the effectiveness and efficiency of your campaigns. Understanding these varied forms of ad fraud is one of the first steps for advertisers who need to safeguard their investments and maintain the integrity of their advertising efforts.
How Do Ad Fraud Types Differ?
While the end goal of ad fraud remains largely the same, the methods employed by fraudsters to achieve this can vary widely. Each technique exploits different aspects of the advertising ecosystem, which includes everything from the payment structure of purchasing ad space to audience targeting.
Some types of ad fraud are also more sophisticated. They might not be as obvious as sudden spikes in traffic, but they’re wasting your resources all the same.
Here is a closer look at some of the most common types of ad fraud and how they can affect your advertising campaigns.
Click Fraud
Click fraud is essentially what it sounds like: A form of advertising fraud where technology is used to inflate clicks on pay-per-click (PPC) ads.
This is by far one of the most common types of ad fraud, especially for PPC campaigns. That’s because it’s relatively easy and inexpensive to run botnets or even click farms to repeatedly click on ads.
The direct consequence is financial loss due to paying for worthless clicks. Over time, this can also skew analytics data, making it hard for advertisers to optimize genuine campaign performance.
Domain Spoofing
Domain spoofing is another type of click fraud. Fraudsters will create replica websites with nearly identical URLs to legitimate sites. These fake sites are then filled with ads to generate fraudulent clicks.
Ad Injection
Similarly, this type of fraud occurs when a computer is infected with malware. While the user browses websites, the malware injects ads into them without consent.
Impression Fraud
This type of ad fraud is another way for bad actors to cash in on fraudulent traffic. It essentially inflates the number of times an ad is viewed. Since businesses often pay publishers for every thousand impressions the ad collects, this can create a higher payout for fraudsters and wasted money on false impressions.
Pixel Stuffing
One-way bad actors can conduct impression fraud is by inserting an ad into a 1x1 pixel on a page. The ad is not viewable to the human eye but is still technically on the page and counted as an impression the business will have to pay for.
Ad Stacking
Another method is to stack multiple ads on top of each other. Even though only one ad will be visible, an impression is recorded for all the ads to inflate their numbers.
Affiliate Fraud
Affiliate marketing is becoming an increasingly popular way to reach a wider audience and generate more qualified leads. However, even this more personal way to advertise isn’t safe from ad fraud.
At a high level, this type of fraud is any action that generates fraudulent commissions from affiliate marketing programs. Devious affiliates may use click fraud, impression fraud, and even lead injection (creating fake leads) all to generate or inflate their commission earnings.
This not only costs advertisers in terms of unwarranted affiliate payouts but can also harm their reputation and customer relationships when fraudulent activities are traced back to their marketing efforts.
Lead Fraud
Creating fake leads, specifically, is known as lead fraud. Affiliates may fill out fake interest forms to increase their earnings. However, bots or click farms can also fill out these forms with bogus information and cause companies to pay for leads that will never result in sales.
Mobile Ad Fraud
Mobile ads are another affordable way to reach the masses where they are – on their phones. So it’s no wonder that mobile ad spending in the U.S. is expected to cross $200 billion this year. However, this also provides another channel for fraudsters to siphon off mobile advertising budgets.
There are a few different types of mobile ad fraud. They can all negatively impact your digital advertising campaigns.
Along with tactics like pixel stuffing and domain spoofing, there are some other common types of mobile ad fraud.
Click Injection
This type of fraud is prevalent on mobile apps on Android devices. It exploits a feature in the Android operating system so that when an app is installed, it triggers a click on the fraudster’s app just before the legitimate app is fully installed.
It can lead to inflated click-through rates (CTRs) and install rates.
Software Development Kit (SDK) Spoofing
Another common type of mobile ad fraud is SDK spoofing. This is where fraudsters simulate ad clicks within mobile apps without any real user interaction. They use malicious code to accomplish this.
Geo-Masking
Many advertisers rely on a user’s physical location to deliver them targeted ads. Bad actors can use this to their advantage and take measures to mask their location while carrying out these types of ad fraud.
The result is advertisers overpay for low-quality traffic. This can also skew geographic targeting and campaign adjustments based on misleading location data.
Programmatic Ad Fraud
Programmatic advertising has proven to be a streamlined way for advertisers to purchase and place their digital ads. But it shouldn’t come as a surprise that fraudsters have again found a way to misuse the system.
Common types of programmatic ad fraud include pixel stuffing and ad injections. They both result in losses for advertisers draining their budget without gaining any real human traffic. Another method is prebid manipulation. Bad actors can manipulate the bidding process on this solution to misrepresent ad placements.
Many advertisers put blind faith in programmatic advertising and have no insight into where their ads are truly being placed. Instead of generating revenue, your ads could be hidden on a page or show up on unsavory or irrelevant sites!
Understanding the nuances of the different types of ad fraud sets the stage for exploring how these fraudulent activities are actually executed. Make sure to explore our next chapter to gain a deeper understanding of the tools and techniques fraudsters use to carry out their schemes.
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