Listen to this ad fraud post:

Did you know that 61.5% of all online traffic is produced by non-humans and bots?

That’s right, the majority of internet use is being conducted by harmful software designed to secretly harvest information and/or generate huge amounts of revenue for online scammers.

As you read this there’s a very good chance that fraudsters are attempting to hijack the processing power of your device and deploy it for malicious activities.

If you’re on a desktop browser equipped with an ad blocker, that program is probably shielding you right now from malvertising and pop-ups attempting to insert hostile scripts in your computer.

If you’re on a mobile device, your battery life and your data may be going towards running ads on pages that are so small they are not perceptible to the human eye. As much as 60% of display ads are considered unviewable according to IAB standards, and we pay a premium in terms of stolen processing power when unknowingly browsing on mobile.

Suspicious traffic generated from non-humans and bots is growing in response to the recent boom of display advertising on digital platforms.

Why?

Because with an estimated $51 Million lost to ad fraud every single day, there is some serious money to be made by fraudsters.

Online thievery will only become exacerbated by the rapid exponential growth in the digital marketing industry, which is projected to grow to $300 Billion annually in just the next two years.

As budgets grow, so does the threat of ad fraud.

Online spammers and scammers are poised to rob digital advertisers of around $51 Million a day unless something is done to protect ad spend and end what many refer to as the largest scam in history.

 

What Counts as Ad Fraud?

 

We define ad fraud as this: advertising with zero chance of generating a return. In other words, any time an ad impression or click occurs without any chance of conversion or sale.

Fraud can take several different forms, which is why understanding the 3 biggest culprits of digital ad fraud is the critical first step in effectively shielding yourself from online robbery and securing your hard-earned marketing dollars.

1. Click Farms

Click farms are companies that hire real people to surf the internet, visit their customer’s websites and click on the display ads served up on the page.

They are by far the lowest of the low when it comes to online spammers and scammers because they implicate real human beings in this billion dollar fraud ring, usually capitalizing on their lack of alternative income.

Think about it this way. If you decide that you want to buy fake traffic for your website or ad you are paying PENNIES.

You’re just a quick google search away from purchasing 2,500 regular visitors to your website in the next 2 days for just $7 USD. Go on, Google ‘buy fake traffic to my website’ and see for yourself.

That’s $0.0028 per impression. How much of that do you think is actually going to the person making those clicks?

Reports show that China, Venezuela, and Ukraine have the highest levels of suspicious activity with respect to display ads, whereas Singapore, Macau, and Qatar show the highest levels on mobile.

And what do these countries have in common? Large groups of impoverished people who are willing to do the work for next to nothing while the owners of click farms make out like bandits. Not only is it corrupt, but it’s exploitative. 

With $51 Million stolen every day in 2018, these spammers and scammers are making incredible profits on the backs of desperate people.

Our Ad Fraud Protectortechnology can spot click farms from a mile away by identifying their unnatural behaviors and shut them down in their tracks.

2. Spambots

A spambot is a script or piece of code that functions as a parasite, infecting host computers or browsers and hijacking processing power to carry out invisible actions. These hidden operatives could be looking to carry out a host of different tasks from collecting people’s contact information to generating fraudulent impressions or clicks on PPC display ads served up by major networks like Facebook and Google.

The first spambot caught engaging in fraudulent ad clicks was discovered in 2006 by the SANS Institute’s Internet Storm Centre. It had already infected 100 computers by the time it was discovered and spread to 100,000 machines in under a month, using that processing power to click on PPC campaigns by infiltrating the Internet Explorer browser.

Clever developers have deployed spambots to infiltrate social networks in an attempt to skew the public consciousness for malicious purposes, harvest email addresses and personal information, infect online forums and, of course, boost performance for PPC display ads.

Luckily, tools like Ad Fraud Protector have been designed to block fraudulent clicks by triggering CAPTCHA to determine whether or not traffic is human or machine based.  

3. Clickbait Sites.

Quite simply, clickbait sites are websites that exist for the sole purpose of displaying ads and generating revenue.

They use content as bait and surround that content with elaborate ad display systems that create a gated effect where users are forced to click in order to see it. These often involve infuriating protocols a user must perform including clicking to close an ad to see a video, pop-unders where new tabs are opened forcing you to inadvertently click through, or ads masked as calls to action, generating clicks when a user mistakenly clicks on the wrong spot.

These sites thrive because slick marketers know how to create powerful headlines that generate clicks and impressions which allows them to swindle advertisers by creating thousands of dead impressions, clicks and “leads”.

True, users are corralled into your website or online store, but the drop off rates are astronomical because they have expressed no genuine interest whatsoever. Meaning advertisers are paying for PPC ads that have virtually zero potential to convert.

 

So Who Is Behind these Digital Fraud Rings?

 

It’s very difficult to trace the origins of these online scams because they’re often set up under a complex daisy chain of platforms and traffic buying services.

But a good way to deduce who might be behind the scenes to maintain these kinds of ad fraud and waste is to ask, who stands to benefit?

Sadly, the answer is virtually every player involved in the digital ad transaction except whoever is paying the bill, which is why it’s so difficult to trace the origins of fraudulent PPC engagements.

Digital advertisers use networks to purchase space on relevant websites to display their ads.

Space is purchased based on a pay-per-click pricing model where an advertiser is charged each time someone either views or clicks on an ad. The owner of that website is given a percentage of what the advertiser paid and the network takes the rest as a service fee.

Very often people point the finger at publishers, noting that buying traffic and false engagements will increase the value of their real estate and increasing the revenue stream generated by their website.

This could be as simple as someone who creates a website, signs up as a publisher on a major network, and repeatedly clicks the display ads on their own website to drive up the price. But it could also be that owners of online properties purchase bot traffic to do it for them at a much larger volume.

But it may also be agencies who have been hired to advertise online on behalf of companies who want to promote goods and services. In this case, a brand hires a third party who specializes in running digital campaigns to create and manage their marketing programs.

These agencies survive on demonstrating their value with confusing analytics reports showing high impression and engagement rates for ad campaigns. They may be incentivized to purchase traffic in order to bloat campaign KPIs.

Typically agencies also receive a commission on total ad spend, sometimes getting kickbacks north of 20% of the total budget, regardless of whether that budget was compromised by fraud or wasted on bunk clicks.

And finally, as far as the major advertising networks and ad fraud, they’re certainly not doing much to stop it. Keep in mind, they take up to a 50% cut of every dollar processed in ad spend, fraudulent or not.

 

So What Can We Do To Stop Ad Fraud?

 

Luckily, there are some telltale signs that signal suspicious online activity and we have designed a system of cybersecurity ad tools to protect you and your ad spend from being hijacked by fraud.

tribeOS integrations like Ad Fraud Protector, which tracks click rates and blocks suspicious attempts and reports them to you in real time, make it possible to run secure, ad fraud-free campaigns online.

Our Gold Lantern tracking technology uses a 4-level metrics system: Cookies, IP, Email, and Device Fingerprinting to give the advertiser the most accurate possible metrics so they can make smart decisions.  The reporting includes cross-domain sales, attribution reporting, and lifetime customer value analytics and much more.

And the final piece is, every impression, click and sale goes on the immutable blockchain ledger.  No more black boxes. No more hiding. No more scamming.

 

The Bottom Line:

Ad-Fraud Stats

 

Secure yourself from online spammers and scammers and join the 30,000 digital advertisers and publishers waitlisted to join the movement to end corruption and historic levels of thievery…

We are a movement. We are growing.

JOIN US.

Matt Gallant

About Matt Gallant

I'm a seasoned, serial entrepreneur who’s built 13 profitable companies. My 20 years of advertising experience has prepared me perfectly for tribeOS. Over 8 million leads captured, over 13,000 marketing experiments performed, over $10 million spent on digital advertising, and over $40 million generated in online sales. My single-minded purpose is to create the most profitable advertising marketplace ever for advertisers and publishers.

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