Most Common Types of Ad Fraud

In this post, we will discuss most common types of ad fraud affecting PPC campaign. Digital advertising professionals face a constant challenge in preventing ad fraud. PPC advertising can be difficult to do right, even when done well. But this becomes impossible if you are subjected to ad fraud. Ad fraud is becoming a serious problem for advertisers and marketers.

Economists from the University of Baltimore found that 1 in 10 clicks on all eCommerce campaigns was fraudulent. Click fraud will cost online retailers $3.8 trillion by 2020, according to the study. The study also indicated that click fraud spending across all channels and social networks would increase to $23.7 billion.

There are many types of fraud targeting PPC specifically. We’ll discuss the types of fraud that advertisers should be aware of, how they can be detected, and how to avoid them.

What is Ad Fraud?

Ad Fraud is also known as Click Fraud and PPC Fraud. It’s a form of fraud in pay-per-click (PPC) advertising. Ad Fraud is the fraudulent representation of online advert impressions, clicks, and conversions in order to generate revenue. This happens when an automated script or computer program, acting as a legitimate user of the internet, clicks on an ad and has no interest in the target. The ad owner is essentially paying for a wasted click.

Most Common Types of Ad Fraud

5 Most Common Types of Ad Fraud

Click fraudsters can use many different methods to commit click fraud. We’ll be examining the five most common types of ad fraud.

1. Bad bots

40% of internet traffic is generated by bots. Advertisers should be alerted of bad bots. Click fraud is when bots mimic human workflows and pretend to be real users.

Bad bots are a very malicious type of ad fraud. They are notorious for performing repetitive tasks such as initiating fake Clicks at an extremely high rate. They can generate large amounts of fraudulent clicks for PPC campaigns, which drains budgets quickly.

Bad bots not only deplete PPC budgets but also increase the cost and make it difficult to run profitable campaigns.

2. Click farms

Although click farms can be complex, the idea behind them is straightforward. Imagine a room full of people glued to their phones and computers. These workers are paid very low wages to manually click on PPC ads online. They have the intention of increasing clickthrough rates and depleting PPC advertising budgets.

Click farms, although they aren’t often sophisticated operations, are often located in countries with little regulation of ad fraud, such as the Philippines, China, and India. Click farms can have a devastating effect on your business.

3. Data center traffic

Both data centers and hosting providers can be used by fraudsters. They offer all the infrastructure needed to run fraud schemes.

Data centers are often used by fraudsters to hide their locations and launch malware from them. Numerous fraudulent operations were exposed in which fraudsters used hundreds of servers in cloud-based data centers to launch emulators and browsers that generated massive mobile and desktop traffic.

4. Click Spamming

Click spamming is a fraudulent technique used by fraudsters to flood ads with clicks. This allows them to take over PPC budgets. Click spamming fraud occurs when fraudsters perform clicks on real users who haven’t made them. Click spamming is also known as organics poaching or click flooding. It happens when:

  • A malware-infected app is downloaded to the user’s device.
  • The app’s code allows users to click on ads, and an external device can click within the app.
  • These click spammers or developers are paid for these spam ad clicks. They make a profit from unrelated downloads to the app store or in-app purchases.

Adware is often embedded in ads that run in the background of devices to allow them to spam clicks almost continuously. They can be used to deceive marketers, increase ad spending and distort analytics data, making certain platforms appear more efficient than they actually are.

While the victim is unaware, fraudsters may create spam clicks using the following methods:

  • Fake clicks in the background on ads.
  • Click on the invisible ads that are running in the background.
  • Send clicks from your device to random vendors and get a payout.

5. Geomasking

Geomasking is a fraud technique used by fraudsters to conceal the exact location of clicks they are generating. Advertisers spend more or less depending on where they are located (depending on which locations they consider more valuable).

To trick advertisers, fraudsters use fake IP addresses to make clicks appear more valuable than they actually are. This leads to fraudulent clicks being paid out.

Also, fraudsters hide their location so that patterns in the locations they commit fraud cannot be detected.

How to spot the signs that your PPC campaigns are falling prey to click fraud, and how to avoid it?

Click fraud is usually detected by advertisers when they look at the following:

  • There have been large spikes in clicks for PPC ads
  • Low conversion rates despite high clicks
  • Traffic from remote locations and geographies
  • A decline in page views despite highs in clicks
  • A high bounce rate, despite peak clicks

To prevent click fraud from affecting campaigns, advertisers use the following:

  • Google Ads can be used to block fraudulent activity from click farms and bad bots. Google can block IP addresses with its invalid click detection filter. However, advertisers may still see fraudulent activity.
  • PPC platforms are used to monitor click fraud campaigns and blacklist fraudulent publishers campaigns. While many platforms insist on checking and balances in order to prevent click fraud, it doesn’t guarantee that click fraud will be prevented at all.

Both of these methods, however, are manual and reactive and rely on third-party parties to prevent click fraud.

Advertisers who want to optimize their campaigns for maximum ROAS (Return On Advertising Spend) should implement an anti-fraud solution. This is the best way to prevent click fraud and stop it from happening.

These were the most common types of ad fraud that affects your PPC campaign badly. For more information, contact Webstod.

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