Understanding Ad Fraud and its Types

What Is Ad Fraud?

Ad fraud is the practice of exaggerating impressions, clicks, or conversion data for monetary benefit, hence squandering the advertiser's budget.

The activity, often known as advertising fraud or digital ad fraud, encompasses a wide range of fraudulent online advertising operations.

Ad fraud may be done by both individual cybercriminals and major corporations seeking an unfair edge over their competition. Whatever the offender, the end consequence is always the same: money is spent on advertisements that are not viewed by their intended viewers.

Ad fraud is also known as Invalid Traffic (IVT), which refers to any online activity involving non-human traffic. The Interactive Advertising Bureau (IAB) divides this type of online activity into two categories:

General Invalid Traffic (GIVT) is often done by spiders or bots with no intention of committing ad fraud and is hence regarded as the most acceptable sort of invalid traffic.

Rates of Ad Fraud Around the World

According to Statista, the United States and Canada will have the highest ad fraud percentage in 2020, at 2.1%. Europe, the Middle East, and Africa (EMEA) came in second with 2%.

Types of Ad Fraud

The digital ad fraud market is continuously shifting, with mobile ad fraud as prevalent as false desktop traffic. Here are some of the most typical sorts of ad campaign-targeting assaults.

1. Click Fraud

Individuals or bots intentionally click on an advertiser's pay-per-click (PPC) ad with no intention of purchasing the advertiser's product. Because fake clicks generate a misleading sense of the link between clicks and purchases, it is one of the easiest ways to squander ad expenditure.

2. Domain Spoofing

Domain spoofing happens when a fraudster disguises their fraudulent site as a reputable and, more often than not, highly sought-after site. They then dupe advertisers into paying exorbitant fees for low-quality advertising space.

3. SDK Spoofing

SDK spoofing is the process of establishing a bot within an app that then triggers bogus clicks and app installations. SDK spoofing, also known as traffic spoofing, can deceive marketers into paying for app installations that did not occur, often for tens of thousands of dollars. DrainerBot, malware that generated video ad views without the knowledge of device owners, was one of the most notable incidents of SDK spoofing. It is estimated that apps incorporating DrainerBot have been downloaded over 10 million times.

4. Ad Injection

Without the publisher's knowledge, fraudulent advertising is put on the publisher's website and either replaces the website's current ads or is placed next to legitimate ads. Ad injection is often carried out using infected browser extensions, plug-ins, and other sorts of malware. When this happens, it might be difficult to identify since many common security solutions focus on server-side monitoring, whereas injected advertising is placed through the client side of a connection.

5. Ad Stacking

Ad stacking, perhaps the clearest example of the old adage "nothing is as it appears," includes stacking many ads on top of one another in one spot. Even if the viewer only sees the ad at the top of the stack, the fraudster wins money for the impressions reported by each ad.

6. Pixel Stuffing

Pixel stuffing happens when individual pixels are transformed into ad space, as the term implies. An ad is embedded into a tiny space—often 1x1 pixel in size—which permits impressions to be tracked, even if the ad itself is for all practical purposes invisible to visitors.

7. Geo Masking

Geo masking, often referred to as location masking, makes use of the fact that traffic from one nation or region may be more valuable than traffic from another. This sort of ad fraud is used by fraudsters to hide low-quality traffic and upsell to advertisers who believe it is higher-quality traffic from a desirable nation or location.