How Marketers Can Protect Their Online Ad Dollars From Fraud

There is rarely a red flag or a warning sign pointing to the presence of ad fraud because of how widespread it truly is. In all likelihood, fraudulent activity has skewed your campaigns' metrics and baselines for KPIs for so long that it's impossible to determine what "normal" really is.

Now, when many of your other marketing levers, such as events and tradeshows, are unavailable, it is more important than ever to make sure your digital spend is performing. By stopping ad fraud and invalid traffic, marketers have the opportunity to activate up to 30% of their budgets that were previously being wasted on ad fraud.

That gives your budget a bonus allowing your campaigns to reach more people, all while avoiding asking your execs for a budget increase.

Indicators to Keep an Eye On

Within your marketing metrics, the following are the indicators to look for when trying to tamp down fraud and maximize your ad spend.

You get high clicks but low conversions

One of the most obvious signs of ad fraud is a flood of clicks and referrals together with a very low volume of conversions.

This type of fraud has many names and consists of various tactics (flooding, click spam, etc.), but the result is always wasted spend:

• In pay-per-click advertising, every fraudulent click chips away at ad budgets.
• In performance advertising, where the conversion is after the click, click spam enables fraudsters to steal a conversion, making it look like they delivered the final click and thus collect the incentive themselves.

At face value, within a marketing dashboard, such fraudulent traffic looks similar to normal traffic—which means it often eats away at results and budgets and skews baseline data for years before it's discovered.

At face value, within a marketing dashboard, such fraudulent traffic looks similar to normal traffic—which means it often eats away at results and budgets and skews baseline data for years before it's discovered.

Recognition of an issue is the first step toward identifying a solution, such as implementing ad fraud prevention software and restructuring your budget.

Traffic sources are obscured

Identifying this sign of ad fraud again requires looking beyond just clicks and visits. If by looking deeper you discover a high proportion of traffic from limit-ad-tracking (LAT) enabled devices, new or unique devices, or VPN or anonymized visitors, it could be fraudulent activity being intentionally obscured.

Some obscured traffic is normal, so determining what is real and what is sapping your spend can be difficult. Start by taking inventory of where this obscured traffic originates.

If very high proportions of obscured traffic are from individual partners, sub-partners, or site IDs, there is likely a big opportunity to clean up those sources. The resulting savings can be reallocated toward sources delivering real traffic.

As an indicator, this sign is about to get a whole lot more difficult to detect. Apple's privacy-focused updates to iOS 14 will render all traffic from users on this version completely anonymized and untrackable.

Moving forward, high proportions of anonymized user traffic will shift from being an anomalous indicator of invalid traffic to being quite normal. In fact, I suspect we will see lots of simulated activity from devices running this operating system where fraudsters capitalize on this update to obscure traffic.

User behavior is odd—or impossible

If user behavior is so strange it doesn't seem possible, it's probably because it isn't.

Seek out strange patterns within your data that may be indicators of bots or automated-system that are targeting your marketing budget:

• Are there multiple clicks from the same user simultaneously?
• What about visits from the same user from different parts of the world on the same day?
• Do prospects suddenly go silent during post-conversion events and communication?

Few businesses will have the analytics capabilities and the data prepared in such a way that allow for this type of analysis, but there are specialists that can help you get transparency into traffic quality.

The key is just getting visibility, first and foremost, so that you can see the true extent of the impacts of ad fraud on your advertising efforts.

Taking Action

In reality, ad fraud comes in so many forms and levels of sophistication that it takes hundreds of data points and equally sophisticated analysis to reveal it. The fraudulent traffic exposed by the above-listed three indicators barely scratches the surface.

Marketers have an opportunity to use tools available in the market to identify and eliminate threats that eat into their ad budgets as the economic downturn disrupts other efforts.

Fraud detection can give your advertising a performance boost, but it also begins to establish new, more realistic baselines that can more wisely guide ad spend for years to come.