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April 14, 2015

What Is Ad Fraud?

What is ad fraud?

When purchasing online ad impressions, we expect that our ads will reach real audiences and that our campaign reports reflect behavior of live human beings interacting with our messages. However, in today’s world that is not always the case. The interactive advertising market has been infiltrated with illegal activity that directly affects advertising campaign performance and authenticity. Criminals all over the world are damaging the digital landscape by generating fake, non-human ad traffic.

In a nutshell, criminal groups have designed programs to generate false ad impressions, clicks and site visits using robotic programs that essentially trick publishers to believe that real engagement is occurring. Such robotic traffic, also known as “bots” are able to mimic online human behavior and are therefore very hard to detect by publishers. The engagement produced by bots falsely skews an advertiser’s campaign and ultimately reduces the value of legitimate publisher inventory.

On average, bot activity accounts for 11% of display and 23% of video ad views.  For programmatic buys, an average of 17% of impressions are generated from bots.  Bots, like humans, produce web history and are also corrupting retargeting strategies. 19% of retargeted ads are targeted to bots and essentially a waste of an impression.

Campaign reports and optimizations can become very complicated when ad fraud permeates your campaign as results are a mix between non-human and human traffic.  Although possibly aware of fraud activity, deciphering between human and non-human traffic in a campaign report is close to impossible. However, because the robotic traffic is driven by code and not actual human beings, bots are unable to generate real conversions or purchases as a real person would. Therefore, campaign metrics that show an uptick of clicks and site visits without a correlating increase in conversions can be a telltale sign of ad fraud.

As a result, advertisers are paying a substantial portion of their campaign budget for engagement that never involves a real audience. Adweek writes that “Ad fraud is a persistent problem that some say might amount to $7 billion in wasteful ad spending a year.” Ad fraud diverts money flow from legitimate businesses to fraudulent criminals causing advertisers to inadvertently support criminal behavior.  As such, ad fraud continues to weaken the integrity of the interactive advertising industry.

The advertising industry is negatively affected by ad fraud in many ways.  Most notably it causes brands and advertisers to lose confidence in digital media, reduces the value of online inventory, undermines the industry’s self-regulation efforts and offers opportunities for negative press surrounding the industry. Ad fraud also raises concern for the need of government intervention which could change the online advertising market completely.

A new advocacy group full of executives from top brands and agencies has united to combat fraudulent activity. The Trustworthy Accountability Group (TAG) has made its mission to stop ad fraud, identify criminal behavior, share resources within the industry and define standards against ad fraud. The more awareness and knowledge is spread throughout the industry, the sooner ad fraud can be detected and put to end in order to save the value and strength of online media.

To learn more about ad fraud, visit the IAB Traffic Fraud Summary.