Ad Fraud – The Burning Programmatic Issue

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  • August 27, 2015
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We humans have a love-hate relationship with our technology. We love each new advance and we hate how fast our world is changing… The robots really embody that love-hate relationship we have with technology.

-Daniel H. Wilson

The fast pace that the display advertising environment dictates inevitably brings along some critical issues with its further progress. Lately, there have been a few core issues that marketers, brands, and the entire industry are facing, and ad fraud is just one them, along with ad blocking and viewability issues. The speed with which it has been spreading requires developing strong measurement and detection methods.

The first thing that marketers should do in the battle against ad fraud is to realize that it’s already happening. Many experts have recently acknowledged the fact that ad fraud is expanding its proportions and that this should be the prime focus of everyone involved in the industry.

Current state of affairs

Recent years have witnessed increasingly fraudulent inventory generated by smart and sophisticated bots, and this is equally concerning for both advertisers and publishers. The former have specific budgets to spend, while the latter have their payouts suffer from the amount wasted on fraud.

Marketers need to return trust and confidence to their customers again. Even though nobody can guarantee zero fraud, it’s time every serious player in the industry made a commitment towards solving this problem, and one step towards this is improving the quality of inventory.

What is ad fraud?

Ad fraud can be generally defined as an action (or set of actions) by a software designed not to deliver ads at a certain time in front of the right audience; instead, it extracts money from the digital ad system, whether there’s audience or not. Ad fraud may include various human-like actions, such as ad clicks, impressions, mouse movement, shopping activities, etc.

The expansion of ad fraud

The digital environment has witnessed an overwhelming growth over the last years, therefore the display ecosystem is considered a fertile ground for taking advantage of some of its inefficiencies for profit.

The buy side makes continuous efforts to buy lots of traffic as cheaply as possible, often overlooking important considerations, while the sell side, seeking to increase audience, often works with third parties, many of which contain fraudulent traffic.

It’s more than clear that dealing with the issue of ad fraud and other issues surrounding ad quality doesn’t mean standing aside and waiting things to develop to a certain point – on the contrary, it means that marketers should find the time and resources to manage media buys.

Bots

Bots are programs that generate ad impressions or serve unseen ads, without being detected, as they often run in the background of consumer computers. A group of bot-infected computers is called a botnet. Using a simple set of commands, botnets can sell inventory as premium users visit sites with the intent to buy something, collecting cookies from these sites before visitors come and click on the ads.

Bots today are much more sophisticated: some deliver ads behind the scene where consumers can’t see them, even though the advertiser paid as if they had, other bots visit a website just to collect cookies and be retargeted on other sites.

Bots can also adopt human-like behavior after clicking an ad, for instance, watch a video, fill in a form, try to purchase, etc. These actions can lead advertisers to believe that their campaigns produce results, and they’ll optimize their campaign for a false consumer interest, while thinking they’re doing it for genuine human audiences.

Types of ad fraud

1. Impression generation

The act of deliberate generation of impressions either with the use of cheap traffic source to generate more visitors to view the ad illegitimately, or with the use of server scripting to display ads in invisible iframes, or ads covered by other elements on the site.

2. Click Fraud

A type of fraud that occurs in PPC online advertising and involves a program mimicking a legitimate user of a browser clicking on an ad. The purpose is to charge per click, without any interest in the ad’s link.

3. Traffic laundering

This is the practice of masking the true source of traffic. Its start originates from the wish of webmasters not to reveal their traffic sources. Recently, it’s been used to trick ad exchanges and RTB networks to falsely increase traffic value.

4. Cookie stuffing

Cookie stuffing has a new shape in the display advertising environment with the use of a simple trick – retargeting relies on browser cookies which indicate that a user has already visited a site that runs a retargeting campaign to attract their visitors back to the site.

As these clicks are usually more expensive, a webmaster can use server scripting to open invisible iframes to pages that use retargeting cookies for later, so that regardless of the actual user, they’ll be sold as users with the intent to buy.

5. Fake sites and domains

These sites usually have no content for real human consumers to see. Many fake sites are just part of a greater network, which can generate millions in revenue from their fraudulent activities. With domains, fraudsters spoof those of premium sites to trick advertisers into thinking they’re buying placements on premium publishers. This practice also decreases inventory prices of premium publishers since it seems as if they have more inventory.

The challenges with mobile

The growth of mobile programmatic advertising means a new lucrative chance for fraudsters to extract more money with ad fraud. Lacking cookies and facing different technological challenges due to different operating systems, makes mobile advertising a fertile ground for scammers, who already use mobile applications to simulate random clicks.

What can be done?

The ad industry has addressed fraud issues by creating a blacklist, which is a list of Web domains associated with non-human traffic and programs that trick advertisers into paying for ads that aren’t displayed to real consumers. This strategy will help generate industry knowledge about suspicious and fraudulent domains and traffic, and it can also help companies filter bad traffic from their systems.

One of the possible solutions to the ad fraud problem is the use of the SSL (secure socket layer) technology. It uses public key cryptography, and one of its applications is the ability to sign messages and verify their legitimacy. If a company implements this type of technology, whenever traffic is served on its site, the company’s private key is used to sign the ad request, along with a timestamp and the ID of the request; the buyers then use the company’s public key to verify the request’s certification.

SSL is a known term, and its technology secures ad requests for publishers. DSPs can also hugely benefit from this, since they can offer verified traffic to buyers. The use of SSL can change the programmatic climate for the better, but this requires support from all players involved.

More importantly, however, the buy and the sell side will have to become more accountable – this means that advertisers should be more transparent with their clients. They should work with partners who provide full transparency and protection to ensure entirely human traffic. Publishers, on the other hand, should work directly with third parties to remove fraud impressions and sell with third-party verification that guarantees bot protection and brand safety.

Conclusion

Ad fraud is nothing new, but the rapid growth of the programmatic industry has boosted things in this area. The question that’s been bothering both publishers and advertisers is whether they’re paying for the eyes of a bot or a human. Both sides surely want to pay for human eyes, and therefore they should make joint efforts to set the proper standards and ensure that fraud is out of the digital advertising map.

Mimoza Naumovska

Mimoza Naumovska

Social media manager and content creator at Bonadza. I run the social profiles of the company and craft content for Bonadza's blog. I'm exploring the programmatic landscape and I'm eager to expand my blogging horizons. I love books, beer and gigs.

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