It is said that click fraud is the bubonic plague of today’s advertising business, and that it cost marketers more than $11 billion in 2014. Here’s how to fight back against it.
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It is said that click fraud is the bubonic plague of today’s advertising business, and that it cost marketers more than $11 billion in 2014. Although brands, advertising platforms, and even security organizations have made significant attempts to combat click fraud, the Interactive Advertising Bureau (IAB) asserts that the problem has never been more serious for the industry. Various estimates suggest that bot activity accounts for up to 50% of all publisher traffic, with some estimates reaching as high as 60%. Ad fraud is a major source of concern for CMOs, and it poses a threat to the entire growth of digital marketing.
As sanitation and personal hygiene were successful in eradicating the bubonic plague, advertisers might take precautionary measures to protect themselves against the bubonic plague. The key to preventing click fraud is to identify it before the fraudster makes the click. Consider the following points in greater detail:
Pay-per-click advertising has been the lifeblood of the Internet for many years. Advertisers purchase advertisements and pay the publisher for each click. In order to take advantage of this advertising strategy, click fraud, in which an individual or an automated software program clicks on advertisements to generate fraudulent impressions and clicks, has risen in recent years. Click fraud was dubbed the “greatest threat” to the Internet economy by Google’s CFO George Reyes back in 2004, and as indicated by the IAB’s comment, little has changed since that time.
In reality, as scammers have become more skilled, the situation has gotten worse. Today, they use random IP addresses or device IDs in an attempt to make the traffic appear human. Aside from that, they employ bot networks to generate fictitious impressions to specific websites for specific periods of time, and they conceal banners in the background (iframes) so that even though impressions were recorded, the banner was never actually seen.
According to a recent study conducted by SunTrust Robinson Humphreys, bots are responsible for 11 percent of display ad views and 23 percent of video ad views. Bots were determined to be responsible for anywhere from three to 31 percent of programmatically purchased ad impressions, with an average of 17 percent. Even “premium” programmatic campaigns on private advertising exchanges are vulnerable to bots, with bots accounting for approximately 10% of all ad impressions on these exchanges. They not only cause havoc on initial impressions, but they also account for 19 percent of retargeted advertisements. Mobile advertising, formerly considered to be a secure haven for marketers, is now rapidly nearing the levels of online ad fraud as a result of a range of malicious practices.
This inexplicable increase in rates does significant harm to both publishers and marketers. Bots deprive advertisers of their ability to interact with targeted users, resulting in money down the drain for those that work persistently to expand their exposure and attract new users. As a result, they drive up the effective price of inventory for everyone, while simultaneously eroding consumer confidence across the whole mobile advertising ecosystem. Mobile publishers that choose to see the rising fraud problem through to its ugly conclusion run the danger of being unable to monetise their applications as a result of a shortage of advertisers willing to send advertisements to them.
Fortunately, there is a silver lining to the click fraud crisis in that it is starting to spur substantial reform in the business. A growing number of advertisers are becoming more knowledgeable about how to protect themselves from fraudulent traffic and are making more informed selections. Their money is valuable, and they are placing greater emphasis on ad exchanges that adhere to higher standards and provide greater transparency in their operations.
Thus, the exchanges themselves are motivated to crack down on fraudulent traffic and to take further precautions to maintain their inventory as clean as possible. The goal of ad platforms, particularly in the programmatic arena, is to prevent all of their clients from flocking to premium publishers because they believe they are more reliable. The only way for true change to occur is for both advertisers and exchanges to work together to combat click fraud.
Across the board, this will have a significant impact on the sector. Advertisers will be able to achieve a higher return on investment (ROI) for each dollar spent and reach a broader audience. They’ll also get greater information on who is clicking on their advertisements, which will allow them to acquire more insight and optimize their ads more quickly. A cleaner advertising ecosystem will open up the entire industry and help it gain traction. In the future, programmatic and mobile advertising will play a far larger part in advertising campaigns.