What is Click Fraud?

The most common method of click fraud is one whereby bots or people commit click fraud to their competitor’s ads (either banner ads or paid text links) in an effort to deplete their advertising budget.  Another form of click fraud comes from publishers themselves who click on their own ads to appear more attractive for ad placement consideration.  Customers that accidentally click through on their own paid search ad (rather than using search or a bookmark) to access their site also commit a form of click fraud.

 

Click Fraud Could Cost Your Brand a Fortune 

According to a study by the Association of National Advertisers and White Ops, click fraud driven by bots will cost brands up to $7.2 billion globally this year. This latest research also finds that those publishers with higher CPM’s (cost per thousand) are more susceptible to bots which create ad impressions that are not seen by a user but are charged to the advertiser.

In addition to fraud, low-quality inventory and non-human traffic (NHT) can negatively impact brand perception while providing inaccurate data. This study also found that programmatic ad campaigns had a higher percentage of bot traffic than the average, with online programmatic video campaigns having 73 percent more bot traffic. The Interactive Advertising Bureau acknowledges that several of these issues like fraud, ad blocking, and content piracy are costing online marketers around $8 billion annually.

In looking at the current digital landscape, there are few topics that are as concerning to both brands and digital marketers as click fraud. A recent survey conducted in April 2016 by MyersBizNet showed that the highest topics of concerns from Brand Marketers and Media agencies were click fraud, bot traffic, and viewability. However, based on the results of this survey, more Media agency executives indicated that a lack of audience data was a larger concern (52% to 49% respectively).

 

 

Types of Online Ad Fraud

Online Ad Fraud occurs in a variety of ways, from click fraud to bot fraud to viewability fraud, each of which present unique challenges for agencies and brand marketers. Here’s a short primer on the different types of problems currently facing the industry:

Click Fraud

  • Click fraud is the practice of inflating the number of clicks on a pay-per-click ad campaign. It usually occurs when an advertiser is trying to sabotage their competitors by draining their revenue. Another example of click fraud is when publishers click on ads on their own websites to generate revenue for themselves.

Bots

  • Bots are software applications written to perform specific tasks on the internet. These are created to complete repetitive tasks that would otherwise be difficult or impossible for humans to perform at high speeds. As such, not all bots are malicious and not all bots are click fraud bots. As an example of legitimate use, some sites may use bots (such as online chat sites) to monitor for inappropriate content. The most common malicious bots are designed to steal the user’s information, cause a DDOS (Distributed Denial of Service) attack, or add spyware to a site, amongst other things.

Viewability

  • Viewability is an online advertising metric that defines only impressions that are actually seen by a user as viewable. For example, an ad will be loaded at the bottom of a web page, but that doesn’t necessarily indicate that the user will scroll down all the way to see that ad. That would deem the ad un-viewable. Per the IAB, a viewable impression is one that’s at least 50 percent visible for at least one second.

Brand Safety

  • Brand safety refers to those tools and best practices that ensure an ad will not appear in any type of context that can damage the advertiser’s brand. For example, hate sites, adult content, alcohol/tobacco/firearms etc. Other types of content that can be damaging to the brand can also be classified under the brand safety category. For example, a brand advertising cruise ship vacations would not want to appear on a news website detailing the latest cruise ship disaster.

Transparency with Audience Insight

  • Audience data includes demographic, psychographic, and third-party behavioral data. Some advertisers still have only limited access to this data, which causes concern over where digital media is being advertised.

 

What is being done to address these concerns? 

Google has created a click fraud detection algorithm that uses various tactics to detect click fraud. Their system uses automated filters and algorithms to detect and filter out invalid clicks in real time before the advertiser is charged. Google also has an Ad Traffic Quality team that conducts manual processes to detect click fraud as well.

Vendors addressing this issue are implementing processes to combat fraud, which oftentimes includes working with the Trustworthy Accountability Group (TAG). Vendors working within their own platform will implement a vetting process for inventory before making it available. Certain vetting processes such as setting pre-bid solutions in an attempt to block fraud at the impression level and monitoring post impressions to validate their auditing procedure have proven to be effective methods for preventing click fraud issues. Additional items that help maintain high-quality inventory include using proprietary technologies, third-party integrations, human monitoring systems, and industry partnerships to minimize fraud.

There is no guarantee how fraud will continue to affect digital advertising. In order to continue addressing this topic, advertisers will have to maintain strong industry partnerships, remain consistently vigilant, and embrace new fraud detection, monitoring and prevention technologies.