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A digital marketer knows that online advertising is critical to a company’s strategy of attracting new customers. Finding the right audience, whether through Google ads, a Facebook campaign, or an industry blog, can make all the difference. Online advertising is growing by leaps and bounds: $ 378 billion was spent in 2020 alone, and $ 646 billion is expected to be spent by 2024.
In recent years, much of digital advertising has relied on information obtained from third-party cookies that collect browsing data at the user level. But now the internet is moving towards a cookie-less future. And that affects how companies can advertise.
Marketers need to be vigilant about where their spending is going. The target items for campaign success are constantly on the move, so advertising spend can be misused – to the point that up to 74% of total media spend is wasted. According to the World Federation of Advertisers, dollars lost to ad fraud alone will exceed $ 50 billion worldwide by 2025.
Ad fraud isn’t always obvious
The most immediate consequence of fraud is wasted advertising budgets with no results. But it could also have unseen repercussions: If reporting data is riddled with inflated numbers due to incorrect clicks or impressions, it can skew performance metrics and give marketers the wrong feeling about what is working in their advertising.
Fraud can also have a negative impact on future campaign planning. If marketers make future ad spend decisions based on skewed campaign metrics, they could end up investing in campaigns that aren’t designed for success, potentially leading to more wasted ad spend across the board.
But the problem goes beyond compensating for losses caused by bad actors. Fraud can really hurt a business when hours are wasted. If a cybercriminal is injecting clicks or pixel stuffing, there’s a good chance someone on the sales team spent time chasing poor quality leads rather than doing active deals.
The more companies spend on digital advertising, the more they can lose. The problem of the bad actors themselves is compounded by the fact that some popular advertisers have been accused of knowingly misrepresenting the potential reach that ads deliver on their platforms, either due to duplicate accounts, bots, or problems with different measurement tools.
Smarter criminals and more sophisticated schemes mean companies need to understand how bad actors are exploiting media platforms and third-party vendors in order to find potential loopholes.
Five tactics to use when dealing with digital advertising fraud
Marketers and business leaders need to remain vigilant in the fight against ad fraud, including the following five common fraudulent tactics.
1. Cookie filling
Cookie stuffing effectively “crammed” a browser with multiple affiliate tracking cookies. So when a visitor visits a website with an affiliate code, the metadata is transferred. Hence, a merchant affiliate marketing program gives credit to the bad actor and leads to misallocation that can devour ad spend and harm affiliates as the fraudulent entity steals leads and sales.
Cyber criminals can hijack a site and turn it into their own pirated pop-up – or infect an existing pop-up with malware that floods affiliate partners with ghost clicks when the site opens.
2. Domain spoofing
Domain spoofing is the creation of a website that looks like another reputable – and more valuable – website. By creating the wrong version of a website, cyber criminals trick advertisers into paying a name-based premium even though the ad traffic doesn’t match the credibility of the domain.
Two warnings to look out for if a third party offers an ad price that is too good to be true:
- The cost per mile (CPM) is too low for a top tier site
- The domain owner does not sell advertising space in a real-time auction (RTB)
A fake top-tier domain can place display inventory on multiple ad exchanges, as well as video ads on other ad exchanges – even if the fake vendor isn’t selling programmatic video ads. This is how scammers can make huge sums of money by claiming to be an institution they are not, while corporations are no smarter.
3. Click Injection
Cyber criminals place malware on user devices that generate clicks on ads on channels like Google or Facebook that drive up spending. An infected device is known as a “botnet”; A developer creates a junk app that makes it easy to download in the background. The app continually clicks on third-party affiliate ads that make the app money but cost businesses.
Click injections come in many forms, such as automatically changing background images or flashlights. The app seems harmless and is usually available free of charge in an app store. Android users are particularly at risk for this type of scam as their “Install Broadcasts” are signals sent by apps that update themselves automatically.
The malicious app will continue to install and reinstall if the model is Cost Per Installation, where the advertiser spends a lot of money on banner advertising that should be holistic for users in the app. Instead, the app keeps running and costing a lot of money with no actual users clicking.
4. Pixel fill
Pixel stuffing takes up a 1×1 space on a website and hides multiple ads in the background. This takes advantage of impression-based marketing programs by unknowingly interacting with the website, which earns the cybercriminal the impression credit.
Pixel stuffing happens on mobile sites where the ad is so small that most users won’t even see it, but it still counts as a respected impression. Because of this “clear view” strategy, the fraud can be repeated more than once on the website.
Campaigns have different budgets depending on the location and continental location. What the people of Southern California may want to spend may not be willing to spend in Sacramento. Geo-masking hides the generated lead location by spoofing an IP address, which drives the price up, making a lead look more valuable so the criminal can bill advertisers more.
A cybercriminal can break down even more affluent areas of a city and base ad prices with the location swap based on this demographic level. Although the company thinks it is getting an expensive end user, it could attract someone with less disposable income who is not the right target for the price of their product.
Companies can use media intelligence to fight against overload
How can companies keep pace with digital ad fraud and the many other challenges in the media advertising landscape?
Media Intelligence, PwC’s programmatic media analysis platform, consolidates media transactions and analyzes them on a single platform so you can react faster to campaign dynamics and identify areas of waste and fraud. You can break down in detail where the clicks are coming from and how the campaigns are performing.
Media Intelligence provides powerful insight into the different parts of digital and programmatic media investments.
To learn more about how Media Intelligence can help your business fight ad fraud, click here to schedule a demo.