10 Ad Frauds And Their Successful Prevention Steps

Recent research by Business of Apps suggests that publishers have lost $81 billion to ad fraud in 2022 alone, which is estimated to reach $100 billion by 2023. As more investments are being made in digital advertising, fraudsters are finding new ways to scam advertisers out of their hard-earned money. Let’s look at some of the most common ad fraud types and the techniques to detect and prevent them.

What is ad fraud

Also called digital ad fraud or advertising fraud, it is the practice of boosting clicks, impressions, and other metrics through malicious activities, wasting the advertiser’s ad spend for financial gains.

There are various types of ad fraud, and fraudsters typically use bots to implement it. However, it can be caused by both non-human and human traffic. The Interactive Advertising Bureau (IAB) classifies the traffic as follows.

• GIVT: General Invalid Traffic is the traffic caused by bots (computer programs) and crawlers while they’re doing their usual activity without the intention of inflating ad impressions, clicks, etc.
• SIVT:
  Sophisticated Invalid Traffic is designed to commit fraud and is much harder to detect and identify than GIVT. It is characterized by bots mimicking human behavior, hijacked devices, hijacked sessions, malware, proxy traffic, and more.

Ad fraud statistics

Business of Apps Interceptd Statista

Types of ad fraud and their prevention

1. Click ad fraud

   Usually carried out with the help of bots, click fraud is performed to boost clicks on Pay Per Click (PPC) ads. Sometimes click fraud also involves human groups referred to as ‘click farms’, who are paid much less to click on ads and are likely to appear more natural than bots.

   Click fraud is a major issue for online advertisers as it can cost them millions of dollars in lost ad revenue. It also affects consumers, who may be tricked into clicking on malicious links or buying products they don't want or need.

   Intentions behind click fraud

   • Click fraud improves the click-through rate (CTR) of a web page, tricking the search engine into believing that the clicks are from legitimate humans, thus uplifting the SEO ranking artificially.
   • Some companies use bots to leave multiple clicks on their competitor’s PPC ads, hampering their advertising budget.
   • Scammers create fake web pages with PPC ads and use bots to click on the ads, tricking the ad network into paying the scammer for the clicks.

   How to prevent click ad fraud

   • Advertisers
     can use anti-fraud tools, closely monitor campaigns, and educate their staff about best practices for preventing click fraud.
   • Besides, they should also consider using authentication protocols such as CAPTCHAs or two-factor authentication when accepting payments online.

2. Click hijacking

   Click hijacking is an online advertising fraud technique where malicious actors hijack clicks on ads and redirect them to their websites. This type of fraud is becoming increasingly prevalent as it allows the perpetrators to generate revenue without paying for the ads themselves.

   How to prevent click hijacking

   • Advertisers must be aware of the common tactics malicious actors use, and ensure that their ads are not vulnerable to attack.
   • Advertisers
     must use secure links, monitor traffic sources, and regularly audit their campaigns.
   • Additionally, they should take advantage of anti-fraud tools such as click verification software and real-time bidding platforms that can help detect suspicious activity.

3. Domain spoofing

   Domain spoofing is a type of cyber attack involving the use of a domain name similar to a legitimate domain name, tricking people into visiting malicious websites. It is a phishing attack used to steal sensitive information from unsuspecting victims. Domain spoofing can also be used as part of larger campaigns to spread malware or ransomware.

   What are the dangers of domain spoofing?

   Domain spoofing can be used by criminals to commit fraud, steal data, and launch other cyber attacks. It poses a serious threat to businesses, as it can lead to financial losses and reputational damage.

   How to prevent domain spoofing

   Some

   steps that organizations can take to prevent domain spoofing include using strong authentication methods, such as using SSL certificates, monitoring DNS records, configuring email filters and SPF records, and implementing DMARC policies. These measures make domain spoofing attacks more difficult.

4. SDK spoofing

   SDK spoofing is a technique cybercriminals use to access sensitive data. It involves the use of malicious code that is hidden inside legitimate software development kits (SDKs). It can be used for many nefarious activities, including stealing passwords, harvesting personal data, and even hijacking accounts.

   Preventing SDK spoofing

   Some

   prevention steps are implementing strong authentication mechanisms, encrypting data in transit, and regularly scanning for vulnerabilities. Additionally, organizations must ensure that all SDKs are up-to-date with the latest security patches and regularly audit their systems for suspicious activity.

5. Ad injection

   Ad injection involves inserting ads into web pages without the knowledge or consent of the website owner. Sometimes one ad is placed on to another to gain financial credits. This type of advertising can be intrusive and damaging to websites, as it can slow down page loading times, hamper user experience, and even lead to malware infections. Ad injection can also reduce the effectiveness of other forms of advertising, such as affiliate programs and search engine optimization.

   How to prevent ad injection

   • Website owners can use specialized software that scans their website for any suspicious activity, such as code injections or unauthorized changes.
   • Additionally,
     they should consider using an ad-blocking extension on their browser to protect themselves from malicious ads.
   • They can also ensure that their website is secure by using secure protocols and regularly updating their security measures.

6. Click injection

   Click injection is considered a sophisticated ad fraud. It specifically targets Android apps and relies on “install broadcasts” to trigger a click right before an install is completed. As a result, the scammer earns for the click. Even though the app installs are authentic, advertisers end up spending on the fraudulent advertising partner.

   Prevention of click injection

   To

   protect against this attack, companies must implement strong security measures such as two-factor authentication, monitoring traffic patterns for suspicious activity, and using secure encryption protocols when transmitting data.

7. Ad stacking

   Ad stacking is a form of digital advertising fraud where multiple ads are placed on top of each other. When a user clicks on the top-most ad, clicks are recorded for every ad in the stack. This fraud can increase ad impressions, clicks, and even conversions.

   Ad stacking can take many forms, from simple stacking of ads on the same page to more sophisticated techniques, such as using automated scripts or bots to generate multiple impressions. It leads to a decrease in user experience as the page takes a longer time to load.

   Prevention steps

   • Using real-time bidding (RTB) systems that allow advertisers to bid on individual impressions
   • Using anti-fraud tools such as ad verification
   • Implementing strict policies and procedures for campaigns
   • Ensuring that ad tags are properly configured
   • Monitoring campaigns and analyzing data regularly

8. Pixel stuffing

   Pixel stuffing is a technique where a 1X1 pixel is embedded into an ad. The pixel contains multiple ads, implying that when users see the ad, their impression is recorded for all the fraudulent ads inside the 1X1 pixel. Thus, advertisers are charged for more impressions.

   How to prevent pixel stuffing

   • Advertisers can move away from the CPM or cost per thousand impressions model and adopt the cost per click or CPC model to lower the risks of pixel stuffing.
   • They must avoid buying low-end inventory, which may be prone to fraud.
   • They must use anti-fraud and ad verification tools.

9. Geo-masking

   Some countries have higher value traffic than others, and thus CPMs might vary greatly depending on the traffic location. Fraudsters can take advantage of this by concealing their traffic origin and charging high costs to advertisers for low-quality traffic. Geo-masking directly impacts advertisers since they pay for something they think is valuable but doesn’t bring the expected results.

   How to prevent geo masking

   Advertisers must ensure that their ads reach the right audience in the right location. This can be done through geo-targeting, verifying IP addresses, and using third-party services to detect and prevent fraudulent activity.

10. Fake installs

    Fake installs is where a fraudulent paid source generates installs to waste the advertiser’s spend. Fake installs even hamper the ad metrics. For instance, fake installs may be recorded as users who went dormant after installing the app. If not identified, advertisers may continue spending on channels that indulge in fraudulent activity and rely on inaccurate metrics.

    Preventing fake installs

    Fake installs can be prevented by using anti-fraud tools that detect device emulators, spoofing, bots, malware, proxies, and suspicious behavior.

Other ways of preventing ad fraud

Some other measures that can be taken are as follows.

• Focus on fraud detection metrics. For instance, viewability may tell you the ad was viewed but not who viewed the ad.
• Use blockchain-based solutions.
• Ensure that publisher partners use ads.txt/app-ads.txt/ads.cert files on their websites and apps.
• Only work with trusted partners and ad networks that offer an anti-fraud guarantee.
• Have dedicated resources to manage and monitor campaigns, so fraud detection becomes easy.
• Use efficient bot management solutions to detect fraud caused by bot activities.

Top ad fraud prevention companies

Here are some popular companies that offer ad fraud detection and prevention tools.

1. Fraud Blocker

2. IAS (Integral Ad Science)

3. Pixalate

4. Forensiq

5. Adjust

6. Singular

As technology advances, fraudsters and scammers may use more evolved methods to take over the advertising space for financial gains. Ad fraud can be disastrous for both publishers and advertisers if left unchecked. Especially for advertisers to ensure that their ad spend is not wasted, it is a must for ad fraud detection and prevention to be in place.