Ad fraud

Last updated

Ad fraud (also referred to as Click Fraud or PPC Fraud) is concerned with the practice of fraudulently representing online advertisement impressions, clicks, conversion or data events in order to generate revenue. Ad-frauds are particularly popular among cybercriminals. [1] [2]

Contents

While ad fraud is frequently associated with banner ads, video ads and in-app ads, click fraud has been associated with search marketing, mobile advertising and conversion fraud with affiliate marketing. AppsFlyer estimates financial exposure to app install fraud in Q1 of 2018 was as much as $800 million. [3]

Ad fraud is the categorical term inclusive of all forms of online advertising fraud. A successful ad-fraud campaign generally involves a sophisticated combination of Identity fraud and attribution fraud: for instance, sending fake traffic through bots using fake social accounts and falsified cookies; bots will click on the ads available on a scam page that is faking a famous brand. [4] In 2004 Google's CFO George Reyes said that fraud is the biggest threat to internet economy [5] with the first research paper covering the topic in 1999 [6] or earlier. In 2016 World Federation of Advertisers published its first guidance on Ad fraud [7] to advise its members on how to counter the problem allegedly eating close to US$20 billion of its members ad budgets in 2015. [8]

Recent research has revealed new insights into ad fraud within search engine marketing. A study [9] conducted in 2023 found that the average rate of fraudulent activities in search engine advertisements is approximately 11.5%. This statistic highlights the growing importance of implementing effective fraud protection measures in search engine marketing to combat ad fraud. [10]

Comparison with other Cybercrime

In a 2017 report Juniper Research estimates ad fraud to be worth US$19 billion [11] equivalent to $51 million per day. This figure, representing advertising on online and mobile devices, will continue to rise, reaching $44 billion by 2022. Ad fraud is the #1 cybercrime in terms of revenue, ahead of Tax-refund fraud. [12] HP Enterprise in its Business of Hacking report highlighted ad fraud as the easiest and the most lucrative form of Cybercrime.

Important Classifications

Types of Fraud

Source: [14]

Responses to Ad Fraud

In 2017, P&G and Chase suspended their digital ad budget of $200 million dollars and reduced their ad shares from 400 thousand to 5 thousand in an attempt to reduce their exposure to ad fraud. [15]

Sources of Traffic

Formats

Types of mobile ad fraud

Online advertising fraud is a leading concern amongst almost 50% of mobile marketers according to a report from iotec. [17] Ad measurement and verification vendor TrafficGuard reports 7 different types of mobile ad fraud across 2 different categories: [18]


CategoryDescriptionTypes
Attribution Fraud [19] Attribution fraud is when a real user downloads an app and a fraudster attempts to claim attribution for that install. Attribution fraud sees the advertiser pay for a user it attracted through other channels.Types of attribution fraud:
  • Click Spam
  • Ad Stacking
  • Click Injection
  • In-app Event
  • Evasion Techniques
Install fraud [20] Install fraud is when app installs are not from genuine app users. These installs may be from bots or from people that are not its intended users. These installs don't deliver return on ad spend (ROAS).Types of install fraud:
  • App Install Farms
  • SDK Spoofing
  • Evasion Techniques

Sourced Traffic

In a recent publication by Association of National Advertisers sourced traffic was reported as a notable form of ad fraud, [21] a practice where companies partaking in the formal online advertising market buy fraudulent traffic to resell it as legitimate. Sourced traffic has been mistakenly referred to as arbitrage, because buying Sourced traffic does not have any potential for return where as in financial markets arbitrage refers to "risk-free" trading of legitimate assets. While there is no evidence to support the claim, and such evidence would be impossible to conclusively gather, it may be that Sourced Traffic represents lion's share of the Ad fraud market due to the ease and popularity of acquiring and reselling it. The only evidence-based study to Sourced Traffic found in 2016 that around 50% of the acquired traffic was originating from data center IP addresses [22] and that selected Ad Fraud verification vendors Integral Ad Science and Moat largely failed to detect it as ad fraud. The report also showed how easy it is to acquired Sourced traffic as low as $0.001 per click, a price in stark contrast to the going price for click in the formal market which is typically $1 or more. [23]

Non-profit activity

In 2016 there were four notable non-profit organizations focused on creating awareness and availability of resources for countering ad fraud: Botlab, JiCWEBS, Media Rating Council (MRC), and Trustworthy Accountability Group (TAG). Each have published various guidelines and commentaries on ad fraud, most notable of which is the Media Rating Council's Invalid Traffic Detection Guidelines. [24]

Related Research Articles

<span class="mw-page-title-main">Cybercrime</span> Type of crime based in computer networks

Cybercrime encompasses a wide range of criminal activities that are carried out using digital devices and/or networks. These crimes involve the use of technology to commit fraud, identity theft, data breaches, computer viruses, scams, and expanded upon in other malicious acts. Cybercriminals exploit vulnerabilities in computer systems and networks to gain unauthorized access, steal sensitive information, disrupt services, and cause financial or reputational harm to individuals, organizations, and governments.

Digital display advertising is online graphic advertising through banners, text, images, video, and audio. The main purpose of digital display advertising is to post company ads on third-party websites. A display ad is usually interactive, which allows brands and advertisers to engage deeper with the users. A display ad can also be a companion ad for a non-clickable video ad.

<span class="mw-page-title-main">Google Ads</span> Online advertising platform owned by Google

Google Ads is an online advertising platform developed by Google, where advertisers bid to display brief advertisements, service offerings, product listings, and videos to web users. It can place ads in the results of search engines like Google Search, mobile apps, videos, and on non-search websites. Services are offered under a pay-per-click (PPC) pricing model.

Click fraud is a type of fraud that occurs on the Internet in pay per click (PPC) online advertising. In this type of advertising, the owners of websites that post the ads are paid based on how many site visitors click on the ads. Fraud occurs when a person, automated script, computer program or an auto clicker imitates a legitimate user of a web browser, clicking on such an ad without having an actual interest in the target of the ad's link in order to increase revenue. Click fraud is the subject of some controversy and increasing litigation due to the advertising networks being a key beneficiary of the fraud.

Pay-per-click (PPC) is an internet advertising model used to drive traffic to websites, in which an advertiser pays a publisher when the ad is clicked.

An online advertising network or ad network is a company that connects advertisers to websites that want to host advertisements. The key function of an ad network is an aggregation of ad supply from publishers and matching it with the advertiser's demand. The phrase "ad network" by itself is media-neutral in the sense that there can be a "Television Ad Network" or a "Print Ad Network", but is increasingly used to mean "online ad network" as the effect of aggregation of publisher ad space and sale to advertisers is most commonly seen in the online space. The fundamental difference between traditional media ad networks and online ad networks is that online ad networks use a central ad server to deliver advertisements to consumers, which enables targeting, tracking and reporting of impressions in ways not possible with analog media alternatives.

Cost per action (CPA), also sometimes misconstrued in marketing environments as cost per acquisition, is an online advertising measurement and pricing model referring to a specified action, for example, a sale, click, or form submit.

Online advertising, also known as online marketing, Internet advertising, digital advertising or web advertising, is a form of marketing and advertising that uses the Internet to promote products and services to audiences and platform users. Online advertising includes email marketing, search engine marketing (SEM), social media marketing, many types of display advertising, and mobile advertising. Advertisements are increasingly being delivered via automated software systems operating across multiple websites, media services and platforms, known as programmatic advertising.

An Internet bot, web robot, robot or simply bot, is a software application that runs automated tasks (scripts) on the Internet, usually with the intent to imitate human activity, such as messaging, on a large scale. An Internet bot plays the client role in a client–server model whereas the server role is usually played by web servers. Internet bots are able to perform simple and repetitive tasks much faster than a person could ever do. The most extensive use of bots is for web crawling, in which an automated script fetches, analyzes and files information from web servers. More than half of all web traffic is generated by bots.

Cost per mille (CPM), also called cost per thousand (CPT), is a commonly-used measurement in advertising. It is the cost an advertiser pays for one thousand views or impressions of an advertisement. Radio, television, newspaper, magazine, out-of-home advertising, and online advertising can be purchased on the basis of exposing the ad to one thousand viewers or listeners. It is used in marketing as a benchmarking metric to calculate the relative cost of an advertising campaign or an ad message in a given medium.

Click-through rate (CTR) is the ratio of clicks on a specific link to the number of times a page, email, or advertisement is shown. It is commonly used to measure the success of an online advertising campaign for a particular website, as well as the effectiveness of email campaigns.

Search engine marketing (SEM) is a form of Internet marketing that involves the promotion of websites by increasing their visibility in search engine results pages (SERPs) primarily through paid advertising. SEM may incorporate search engine optimization (SEO), which adjusts or rewrites website content and site architecture to achieve a higher ranking in search engine results pages to enhance pay per click (PPC) listings and increase the Call to action (CTA) on the website.

<span class="mw-page-title-main">Microsoft Advertising</span> Online advertising service

Microsoft Advertising is an online advertising platform developed by Microsoft, where advertisers bid to display brief ads, service offers, product listings and videos to web users. Provides pay per click advertising on search engines Bing, Yahoo! and DuckDuckGo, as well as on other websites, mobile apps, and videos.

Mobile advertising is a form of advertising via mobile (wireless) phones or other mobile devices. It is a subset of mobile marketing, mobile advertising can take place as text ads via SMS, or banner advertisements that appear embedded in a mobile web site.

<span class="mw-page-title-main">Digital marketing</span> Marketing of products or services using digital technologies or digital tools

Digital marketing is the component of marketing that uses the Internet and online-based digital technologies such as desktop computers, mobile phones, and other digital media and platforms to promote products and services. It has significantly transformed the way brands and businesses utilize technology for marketing since the 1990s and 2000s. As digital platforms became increasingly incorporated into marketing plans and everyday life, and as people increasingly used digital devices instead of visiting physical shops, digital marketing campaigns have become prevalent, employing combinations of search engine optimization (SEO), search engine marketing (SEM), content marketing, influencer marketing, content automation, campaign marketing, data-driven marketing, e-commerce marketing, social media marketing, social media optimization, e-mail direct marketing, display advertising, e-books, and optical disks and games have become commonplace. Digital marketing extends to non-Internet channels that provide digital media, such as television, mobile phones, callbacks, and on-hold mobile ringtones. The extension to non-Internet channels differentiates digital marketing from online marketing.

Website monetization is the process of converting existing traffic being sent to a particular website into revenue. The most popular ways of monetizing a website are by implementing pay per click (PPC) and cost per impression (CPI/CPM) advertising. Various ad networks facilitate a webmaster in placing advertisements on pages of the website to benefit from the traffic the site is experiencing.

Social network advertising, also known as social media targeting, is a group of terms used to describe forms of online advertising and digital marketing that focus on social networking services. A significant aspect of this type of advertising is that advertisers can take advantage of users' demographic information, psychographics, and other data points to target their ads.

ironSource Ltd. is an Israeli software company that focuses on developing technologies for app monetization and distribution, with its core products focused on the app economy.

Taboola, Inc. is a publicly traded advertising and technology company headquartered in New York City. It provides "content recommendation" adverts on its partner websites.

3ve was a botnet that operated between about 2013 and 2018.

References

  1. ↑ Wilbur, Kenneth C.; Zhu, Yi (2008-10-24). "Click Fraud". Marketing Science. 28 (2): 293–308. doi:10.1287/mksc.1080.0397. ISSN   0732-2399.
  2. ↑ Richet, Jean-Loup (2022). "How cybercriminal communities grow and change: An investigation of ad-fraud communities". Technological Forecasting and Social Change. 174 (121282): 121282. doi: 10.1016/j.techfore.2021.121282 . ISSN   0040-1625. S2CID   239962449.
  3. ↑ Natanson, Elad (11 June 2018). "Mobile Ad Fraud in 2018 - Tackling the Newest Threats". Forbes.
  4. ↑ Richet, Jean-Loup (2022-01-01). "How cybercriminal communities grow and change: An investigation of ad-fraud communities". Technological Forecasting and Social Change. 174 (121282): 121282. doi: 10.1016/j.techfore.2021.121282 . ISSN   0040-1625. S2CID   239962449.
  5. ↑ Crawford, Krysten. "Google CFO sounds an alarm - Dec. 2, 2004". money.cnn.com. Retrieved 2017-01-07.
  6. ↑ "On the security of pay-per-click and other Web advertising schemes" (PDF).
  7. ↑ "Compendium of ad fraud knowledge for media investors" (PDF). Archived from the original (PDF) on 2018-02-01.
  8. ↑ "Report: For Every $3 Spent on Digital Ads, Fraud Takes $1" . Retrieved 2017-01-07.
  9. ↑ admin (2023-11-22). "Fraud Protection Report 2023 - KIM LABS® GmbH, Trier". Kim Weinand - Kim Labs (in German). Retrieved 2023-12-05.
  10. ↑ Chiocchi, Paula. "Council Post: Ad Fraud: The Biggest Threat To The Advertising Industry". Forbes. Retrieved 2024-08-02.
  11. ↑ Barker, Sam (25 September 2017). "Juniper Research - Future Digital Advertising: AI, Ad Fraud & Ad Blocking 2017-2022". Juniper Research.
  12. ↑ "THE TOP 5 CYBERCRIMES" (PDF).
  13. ↑ "The Main Types of Mobile Ad Fraud | Interceptd". January 14, 2020.
  14. ↑ "5 Common Types of Ad Fraud and How They Affect Publishers". www.adpushup.com. Retrieved 2022-10-24.
  15. ↑ Fou, Dr Augustine. "Out Of The Darkness (Of Ad Fraud) And Into The Light". Forbes. Retrieved 2020-08-02.
  16. ↑ "Click Farms: What Are They & What Are They For? | ClickCease". 25 March 2021.
  17. ↑ "Mobile ad trends: Ad fraud tops transparency concerns". iotec. 13 November 2017.
  18. ↑ "Your definitive guide to mobile advertising fraud". TrafficGuard. 13 August 2018.
  19. ↑ "Attribution Fraud: Are You Getting Gamed? | AdExchanger". AdExchanger. 2016-07-08. Retrieved 2018-10-23.
  20. ↑ "Study: App install fraud jumped 30% in Q1". Mobile Marketer. Retrieved 2018-10-23.
  21. ↑ "Sourced Traffic: Buyer Beware | Industry Insights | All MKC Content | ANA". www.ana.net. Retrieved 2017-01-07.
  22. ↑ "Mystery Shopping Inside the Ad-Verification Bubble". 2016-06-08.{{cite journal}}: Cite journal requires |journal= (help)
  23. ↑ "The Cost of Pay-Per-Click (PPC) Advertising—Trends and Analysis - Hochman Consultants". Hochman Consultants. 2015-11-24. Retrieved 2017-01-08.
  24. ↑ "Invalid Traffic Detection and Filtration Guidelines Addendum" (PDF).
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.