This year alone, marketers will lose about $6 billion to fraudulent ad activity, and the worst part is, they don’t even know they’ve been scammed.

Now you might be thinking this doesn’t apply to you, but if you’re including any sort of digital advertising into your marketing strategy, a substantial part of your views and clicks may be coming from fraudulent sources.

 In fact, a 2019 fraud detection study by White Ops, found that around 20-35% of all online ad impressions were fraudulent. With the estimated value of the digital advertising market expanding to around $225 billion this year, it’s easy to see why this is such a lucrative target for online scammers. 

In this article, I will dive into the vast world of ad fraud and show you 5 ways to combat it that will save you money and get your ads in front of the right (human) eyes.

What is Ad Fraud?

Ad fraud is a broad term for the practice of falsely generating impressions, clicks, likes, traffic, etc. from “fake” sources in the pursuit of charging advertisers more for ad placements on search engines or websites. Fake sources can come in a number of forms but some of the common ones are:click-farm

Click Farms: These can be small one or two-person scams all the way up to large scale sweatshop-like operations with hundreds of people generating fake likes, clicks, downloads, traffic, etc. The setup works like this: a large bank of smartphones or computers are housed in a location with a person, multiple people, or algorithm operating each device (i.e. clicking, liking, going to web pages, etc.). The activity from these devices looks like real human interaction because in many cases it technically is, it’s just not the human interaction you want from your ads, as it will never lead to any sales and simply serves to drain your ad budget.

Bots: The term “bots” refers to programs or algorithms that have been automated to view, click or otherwise interact with online ads in order to increase views, traffic, clicks, etc. Think of it as a click farm on steroids. While click farms may be able to gather hundreds or thousands of interactions per day, these bots are capable of generating millions of actions per hour, and what’s worse – they’re smart, sophisticated, and hard to detect.

One of the most famous and profitable bot-driven ad fraud programs, called Methbot, operated from 2014-2016 and at its peak generated an estimated $3-5 million per day. This incredibly elaborate program operated by a group of Russian scammers worked by first falsely registering IP addresses they owned to Internet Service Providers like AT&T, Cox, etc. to make them appear as though they were from American households.

The scammers then created carbon copies of reputable content outlets like ESPN, Vogue, New York Times, and more. Although the fake sites were generally nothing more than a single page shell that would display a video ad, the algorithms used by programmatic advertisers couldn’t tell the difference between the fake sites and the real ones, so the fake sites successfully won many bids for ad space.

Finally, using hundreds of thousands of bots, the scammers generated millions of fake clicks and views on their “ads.” They even go as far as to mimic real human click patterns and mouse movements to trick the bot-detection safeguards put in place by the platforms serving the ads.

Here’s 5 Ways You Can Fight Back:

If reading this so far has scared you a little bit, good – that means you’re paying attention. But I’m not going to sit here and say digital advertising isn’t worth the investment, far from it. What I’m saying is that we can no longer simply throw dollars at various ad channels and assume everything will be okay. We have to be proactive in our approach to combat ad fraud by utilizing every tool at our disposal. Fortunately, there is a wealth of technologies that can help you take action against ad fraud in your digital strategy.

  • IP Geolocation: IP geolocation can be a great tool to detect and prevent ad fraud. It works by using proprietary algorithms to trace a website visitor’s IP address back to their geographic location. This information can be used to determine where exactly your traffic is coming from. If, for example, you’re running an ad campaign and are seeing a high spike in traffic from an area you don’t typically do any business in or one where online scams are prevalent, this could be a good indicator that you’re paying for robo-clicks. More on that in our IP geolocation article.
  • Geofencing: Savvy marketers can use IP geolocation data to create an invisible “fence” that essentially blocks IP addresses from certain geographic regions from ever seeing their ads, thereby, eliminating the possibility of showing ads to IP addresses from high fraud regions.

    Now you might be saying, “What about the Methbot example using fraudulent IP addresses to make them look like they were coming from a different country?” Well, first, if you’re using a reputable IP address intelligence vendor to run targeted ads, they should be able to look past public IP databases to uncover the real owner of an IP address. And second, Methbot is one of the most elaborate examples of ad fraud anyone has ever found. Countless other forms of ad fraud exist and the vast majority of them would be halted in their tracks by using geolocation or geofencing solutions.
  • Campaign Monitoring and Attribution: As with any good account-based marketing campaign, monitoring and attribution are critical. By leveraging IP address intelligence or reverse IP lookup technologies, you can see exactly which companies have clicked on your ads and visited your website. So, if you’re paying for ad placements on outlets that are applicable to your target audience and you’re not seeing that reflected in your website traffic, it might be time to re-evaluate that outlet. On the other hand, if you’re seeing a spike in target account traffic coming from a particular outlet, it might be worthwhile to consider expanding your ad presence on that channel.

    Tools like Google Analytics are great at giving you an overall number of users and sessions over a time period, but by integrating IP address intelligence into these reports, you can dive into these numbers and reveal the actual companies behind the IP addresses visiting your website.
  • IP-Based Ad Targeting: The best way to combat ad fraud is to adopt a strategy that prevents it from ever happening in the first place – I know, duh, right? Here’s what I mean. Once you have a target account list you want to market to, IP-based ad targeting will allow you to show ads to ONLY the IP addresses associated with those companies - meaning nobody except them will even have the possibility of seeing your ads. While IP geofencing can limit your ads to viewers in one specific geographical region, this allows you to target your message directly to your target accounts. Furthermore, good IP-based targeting platforms gather their IP address information from a variety of sources, not just the public IP address registry – ensuring that even the most advanced bots will be unable to fraudulently click on your ads. 
  • B2B Audience Retargeting: Similar to how traditional ad retargeting works but much more powerful. Audience retargeting allows you to only bid on ad space viewed by devices associated with the companies that have visited your website and meet certain criteria that you set (company, size, revenue, location, and more). In addition, since you already know exactly what type of companies will be seeing your ads, you can create tailored messages that are much more likely to resonate with your target audience.   

Unfortunately, the game of cat and mouse between scammers and businesses never ends. But, thanks to the technologies we now have at our disposal, we are more prepared than ever to fight back against ad fraud. By leveraging IP address intelligence across your digital marketing strategy, you will be able to more closely monitor your ad spend and ensure that only your desired accounts are served your ads.