In digital advertising, an invisible war is underway in the form of ad fraud – a deliberate activity that prevents the proper delivery of ads to the right people at the right time and place.
Ad fraud is not just a technical hiccup; it’s a sophisticated operation designed to drain advertising budgets and mislead brands and compromise the integrity of the ecosystem.
It is not confined to programmatic ads; influencer marketing is a growing frontier. “Nearly 2 out of 3 Instagram profiles in India have spurious or fake followers,” according to The Ad Fraud Playbook by The Indian Society of Advertisers.
A billion-dollar problem
Ad fraud leads to not only financial losses and inaccurate performance metrics but also diminished brand trust & negative user experience and damaged advertiser and publisher relationships, points out The Ad Fraud Playbook.
“The low labor costs and lack of stringent regulatory oversight make India an attractive playground for ad fraud,” states the playbook.
Fraudsters thrive in this unregulated space, utilizing low-cost labor and advanced technological tactics.
Anatomy of Ad Fraud
Malicious Bots: Automated programs generate fake clicks or visits. “This broad category wastes ad spends by producing large quantities of fake impressions.”
Ad Stacking: Multiple ads are layered invisibly beneath a single ad placement. “While only the top ad is visible, all are billed,” making it a lucrative deception for fraudsters.
Pixel Stuffing: Ads are compressed into a single pixel, recording impressions invisibly. “This allows impressions to be recorded even though the ad itself is invisible.”
Domain and App Name Spoofing: Fraudsters masquerade their sites or apps as legitimate ones, tricking advertisers into paying premium prices for low-quality ad spaces.
Location Fraud: Misleading location data is sent to serve ads outside targeted regions. “This reduces the effectiveness of the campaign,” notes the playbook.
Advanced detection techniques
The ISA Playbook recommends a toolkit for combating ad fraud:
Traffic Analysis: Monitoring suspicious IP addresses and geographic irregularities. “A platform flags an IP address generating thousands of ad clicks with no engagement, suggesting a click farm.”
Behavioral Analysis: Studying user interaction patterns to identify anomalies. “Systematic scroll patterns on a social media platform suggest non-human behavior.”
Machine Learning: Leveraging AI for predictive analysis and anomaly detection. “Algorithms can identify fraud patterns and predict potential fraudulent activities based on historical data.”
Ad Verification Tools: Ensuring viewability and validating clicks. “Tools like DV and MOAT measure if an ad was actually viewable on the screen and for how long.”
Biometric Verification: Incorporating facial recognition or fingerprint scanning for high-value transactions. “This ensures actions are performed by authorized users.”
Case studies:
From quick-service restaurants to consumer packaged goods, the ISA Playbook provides real-world examples of combating fraud. A leading QSR brand used granular KPIs to mitigate fraud and saw a “50-60% improvement in ROI metrics by investing 5-8% of their media cost in fraud detection tools.” Similarly, a CPG brand partnered with IAS for pre-bid fraud protection, achieving a “7.9% reduction in fraud and maintaining levels around 1.3%, saving over 32.2 million impressions.”
Call to action
The playbook suggests a roadmap for advertisers and industry bodies to collaborate on creating a transparent and accountable ecosystem. “Advertisers must vet vendors, demand transparency, and implement pre-bid filtering,” it advises. On a broader scale, industry bodies are urged to standardize metrics and share intelligence. “By implementing these strategies, we can significantly reduce the impact of ad fraud.”