Online fraud running into the billions: 10 tips to avoid ad fraud

100 million dollars every day! That is the level that experts at Juniper Research expect losses caused by online advertising fraud to reach by 2023. We reveal the best ways to protect yourself against ad fraud.

If you want to combat ad fraud, these tips will put you on the right track.
Image: © BullRun / Adobe Stock

Digital advertising trend brings fraudsters out of the woodwork

The digital advertising market is growing strongly. In Germany alone, the Online Marketing Group (Online-Vermarkterkreis, or OVK), part of the German Association for the Digital Economy (BVDW), estimates the net volume for digital advertising (online and mobile) for the past year to be almost four billion euros – an increase of around 8.6% as compared to 2019. With sums of money on this scale, technically skilled fraudsters are never far behind. There’s a reason why ad fraud is the most lucrative form of cybercrime.

We talk to Oliver Hülse, Managing Director, CEE at Integral Ad Science (IAS), about the most common types of ad fraud and give you ten tips on effective ways to guard against online advertising fraud.

What is ad fraud?

Generally speaking, the term ad fraud refers to fraudulently representing advertising services that are either not delivered or delivered incorrectly, all for one’s own financial gain.

Oliver Hülse: “We define digital ad fraud as any intentional activity that prevents the proper delivery of advertising to the target audience at the targeted location. Ad fraud can lead directly to financial damage or reduced advertising effectiveness for both advertisers and publishers.”

Oliver Hülse from Integral Ad Science explains the best ways to guard against ad fraud
Oliver Hülse from Integral Ad Science (IAS) (Image: © Integral Ad Science)

What forms of ad fraud are most common?

According to IAS, the most widespread forms of ad fraud include illegal bots (bot fraud) and domain spoofing. Illegal bots are automated programs that are installed on a computer without the user’s knowledge and use computer resources unnoticed to generate artificial traffic.

Domain spoofing, on the other hand, is where fraudsters trick shoppers into thinking that their ads are being served on a premium website – but they actually end up on a website of inferior quality. “For maximum effect and high profit, different ad fraud methods can, of course, be combined “, emphasizes Hülse.

The fight against ad fraud as a “constant arms race”

“Ad fraud methods are constantly evolving, so that the fight against ad fraud is a constant arms race, where the digital industry is always looking for more elaborate identification methods. The methods used by fraudsters are becoming more and more sophisticated. Almost every day, new bot networks are being created to grab advertisers’ advertising budgets”, warns Hülse.

How has lockdown affected the ad fraud rate, which had previously been declining?

In the latest Media Quality Report from IAS for the second half of 2020, we see an improvement in global ad fraud rates overall. Ads optimized against ad fraud are decreasing across all devices and environments. This is reflected in average ad fraud rates remaining below 1.0% across all formats. The rates have also remained constant in Germany”, Hülse says, explaining the results.

While the optimized ad fraud rate in mobile web video has remained at 0.5% year-on-year, it has increased for desktop video campaigns from 0.8% in the second half of 2019 to 1% in the second half of 2020. In contrast, ad fraud rates in desktop display (1.0% vs 0.8%) and mobile web display (0.6% vs 0.5%) have improved slightly.

Expert tips: How you can actively guard against ad fraud

In the view of the experts at Integral Ad Science, the most important factors in preventing ad fraud are awareness of possible fraud and active participation in combating it. “Above all, it is important that all members of the digital ecosystem make a concerted effort to fight ad fraud”, underlines Hülse.

A multi-layered approach to detection is critical. “The best solutions to combat ad fraud are those that combine technologically sophisticated methods. In any case, it is important to take proactive measures. After all, relying solely on methods such as exclusion lists can have a significant impact on reach”, emphasizes Hülse.

Compact and useful: The top 10 tips from Integral Ad Science to protect against ad fraud

  1. Use verification and ad fraud solutions that confirm that booked ads are being served in the targeted location and environment, and on the targeted device.
  2. Use ad fraud solutions designed for General Invalid Traffic (GIVT) and Sophisticated Invalid Traffic (SIVT).
  3. Measure ad fraud across all campaigns to better understand online fraud performance.
  4. Audit your suppliers and partners – ask them how they protect against malicious bots and other forms of IVT.
  5. Provide and demand more visibility into inventory and traffic, including purchased traffic and any reach extensions.
  6. Implement blocking technologies or use anti-targeting technologies to avoid compromised machines or high fraud sites.
  7. Use pre-bid filters to prevent fraud on programmatic purchases.
  8. If necessary, use exclusion and/or inclusion lists.
  9. Focus less on low CPMs and more on achieving real KPIs tailored to your campaign.
  10. Provide and demand more visibility and transparency when programmatic advertising is used.

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