Between last year and 2027, the programmatic advertising industry is expected to grow at a CAGR of 32.23%. This forecast comes at no surprise as programmatic is one of the smartest and easiest ways to purchase and sell ad inventory, benefiting both the advertisers and the publishers.
Unfortunately, thanks to instances of ad fraud, programmatic advertising is not perfect. Since programmatic advertising is a complex system, fraudsters have also developed sophisticated techniques to cheat the system and make a quick buck. In fact, fraudsters have been so successful that, according to certain estimates, programmatic ad fraud costs advertisers an excess of $50 billion annually.
One of the first steps to protect your programmatic campaigns is to build awareness and understand how these types of fraud are committed. Let’s begin there.
What Is Programmatic Ad Fraud?
Programmatic ad fraud, as the name suggests, is the practice of manipulating programmatic ads systems to generate unethical revenue. More specifically, fraudsters generate fake impressions or clicks to make revenue as publishers. However, since none of these clicks or impressions result in any business for the advertiser, the revenue made by the publishers is unethical and the entire scheme is categorized as a fraud.
There are many types of programmatic ad fraud but the most common ones are:
Impression Fraud
This is one of the two most common types of programmatic ad fraud. As the name suggests, fraudsters use bots or devices that they have infected with malware to generate fake impressions on ads. This artificially inflates impression numbers, generates revenue for the fraudulent publisher, but since there is no real human interaction involved, the advertiser’s ad budget is wasted.
Click Fraud
Click fraud is similar to impression fraud, with the only difference being that the advertiser, who is the victim of the fraud, ends up paying for fake clicks instead of impressions. The method of generating fake clicks in click fraud is often similar to the methods employed by fraudsters to generate fake impressions. The result is often similar as well. The fake clicks generate no real value to the advertiser while generating revenue for the fraudsters.
Domain Spoofing
Domain spoofing is the practice of purchasing a domain that has a similar name to a reputed website and making it appear like the real website. This confuses advertisers and many end up placing their ads on such duplicitous websites thinking that they are paying for ad inventory on a reputed website.
Ad Injection
Another common practice, ad injections involve ‘injecting’ ads on a publisher’s website without their knowledge. In this case as well, advertisers are fooled into thinking that they are paying for impressions or clicks on reputed websites. However, since this is not the case, and the ads are served on different websites, the audience is usually irrelevant. The advertisers still end up paying for the clicks or impressions but get no real value against their spend.
Programmatic Ad Fraud: The Impact On Your Business
Wastage of ad spends is perhaps the most obvious negative impact of programmatic ad fraud on your business. However, the damage such fraud causes goes much deeper. Let’s look at the other ways your business is impacted as a result of programmatic ad fraud:
Skewed Metrics
Fake clicks and impressions inflate the performance delivered by fraudulent platforms and publishers. This misguides advertisers when they make optimization decisions. This is because after looking at the inflated numbers, the advertising team may decide to allocate more budget to a fraudulent platform. This will lead to even more wastage of advertising budget and even poorer results.
In the long run, poorly reported metrics can lead to more serious repercussions. For instance, after noticing poor results from programmatic advertising for a long time, business decision makers may decide to pull the plug on the marketing activity, effectively depriving that business of an undertaking that can be substantially beneficial.
Damage To Brand Image
As a result of ad fraud activities such as ad injection, an advertiser’s ads may appear on unsuitable websites. In worst cases, ads may appear alongside offensive or extremist content. This is sure to cause serious damage to any brand’s image because their customers and prospects don’t know that their favorite brand has been a victim of fraud.
Fighting Against Programmatic Ad Fraud
While awareness is the first step in the fight against programmatic ad fraud, the journey goes well beyond simply knowing about it.
While it is true that most countries don’t have properly regularized the programmatic advertising space and thus, cannot pursue or punish the fraudsters. Similarly, advertising platforms like Google have taken steps to ensure the safety of advertising campaigns on their platform but even those efforts don’t offer complete protection. Advertisers, contrary to what many believe, are not helpless against such instances of fraud and it is up to the advertisers to protect their interests.
The simplest, most surefire way to protect your interests is to use ad fraud detection tool . Such a tool uses AI and ML algorithms to continually and intelligently monitor the user activity on your ad campaigns. Since the algorithms work round the clock and without the influence of human bias, you can rest assured that your campaigns are protected the way they should be.
Conclusion
Programmatic advertising is a superb way to reach your customers. The insights advertisers can draw from their programmatic campaigns can help them consistently improve the returns they make on their programmatic ad spend. However, ad fraud stands in the way of advertisers looking to make the most of their investment into programmatic advertising. This is where ad fraud protection can come in handy, helping advertisers protect their campaigns and maximize their gains.