Ad Fraud 2023: Everything You Need to Know

The ad fraud industry is a growing problem that loses advertisers billions of dollars annually and constitutes 10 % of all digital marketing activity. It is a hot topic for all companies and publishers who are losing lots of money due to the complex world of ad fraud. Here's everything you need to know about ad fraud - what it is, where it happens, and how to protect yourself.

Ad fraud is a term used to describe the practice of generating fraudulent ad impressions, clicks, or conversions to make money. It's a form of online advertising fraud that both individual parties and organizations can commit.

In many cases, it's difficult to detect ad fraud because it looks exactly like real traffic. Advertisers often have no way of knowing whether the supposed users who clicked on their ads are real people or bots created by malicious actors using botnets or click farms. This makes it easy for criminals to generate large amounts of fake activity without being caught.

Ad fraud is also known as invalid traffic (IVT), an online advertising fraud involving automated non-human traffic to artificially inflate ad viewability or ad click-through rates. The two types of IVT include:

General Invalid Traffic (GIVT): This form of invalid traffic (IVT) affects the entire web ecosystem. It's generated by bots, or automated software programs, that generate fake impressions, clicks, and conversions.

This is the most common type of fraud and accounts for up to 80% of all ad fraud. GIVT can be identified through regular filtration activities such as standard checks and lists.

Sophisticated invalid traffic (SIVT): This type of ad fraud consists of bots masquerading as humans when interacting with digital ads. SIVT can be especially dangerous because it's hard to detect and prevent. These bots are often created in highly sophisticated ways, making them difficult to identify. SIVT can be identified through human intervention, advanced analytics, and multi-point collaboration.

Many different types of ad fraud take place in the digital advertising ecosystem. Some of these include:

This is when someone clicks on your ads without viewing them or even intending to. This can happen accidentally when bots click on ads or when real users do so.

Impression fraud is when an advertiser pays for an ad that doesn't display on a web page or mobile app — even though it was shown as having been served. This can happen if malware is on the publisher's site or app, which generates fake impressions without ever showing them to anyone else.

Malvertising occurs when malicious code is inserted into legitimate ad units, often unbeknownst to their publishers. This allows attackers to redirect users to phishing sites or other fraudulent destinations.

Domain spoofing involves using fake domain names that look similar to other websites so that users click on what they think is another site but take them somewhere else entirely.

This fraud occurs when an agency pays real people to click on ads to drive revenue for clients or themselves. Click farms are sometimes called "click injection" because they inject fake clicks into legitimate advertisers' campaigns using bot traffic and other methods.

Cookie stuffing is similar to domain spoofing, but instead of changing the domain name, it changes the cookie ID — which allows you to circumvent third-party ad verification software and get paid for ads that aren't served.

Your direct competitor could use your PPC budget to improve their ad ranking for relevant searches. This could harm your business if they click on your ad frequently or instruct others to do the same.

People who accidentally click on an ad and then quickly leave the site are technically not committing click fraud, but their clicks are still invalid. This can cost advertisers lots of money, especially if it happens repeatedly. There's no malice involved, just a mistake.