What Is Ad Fraud and How to Beat It: Tips on Avoiding Fake Ads with Proxies

Costing businesses billions of dollars, advertising fraud can be justly called one of the biggest concerns eCommerce is facing today. According to recent statistics, the overall cost of fraudulent ads in 2022 accounts for about $80 billion and is projected to reach an enormous $100 billion next year. One of the key issues with fraud advertising is that its methods get more sophisticated and diverse on an ongoing basis which makes it increasingly challenging for businesses to combat it. In this article, we will take a closer look at the core types of ad frauds, the risks they imply for publishers and advertisers as well as how to detect the fraud with the help of proxies.

What Is Advertising Fraud and Why Is It Challenging to Stop It?

In a nutshell, advertising fraud refers to any activity aimed at disrupting or interfering with the appropriate delivery of an advertisement to its target audience. In order to increase financial gains, malicious actors turn to different tricks to make advertisers mistake fake network activity for real. Most commonly, these are bots that are used to implement fraud in advertising but the fraudulent ads tools are far more varied including real humans who get paid for generating fake web traffic.

So why hasn’t anyone solved the advertising fraud problem yet? The reason for this is that, however paradoxical it may sound, all eCommerce market players are genuinely interested in the flourishing of digital ad fraud activity. As experts commonly point out, fraudulent ads are mainly about incentives, not technology. Media agencies benefit from fake ads as those enable them to demonstrate high performance indicators to their clients. 

Anti-fraud companies prefer the fraud to exist because otherwise, their services would become irrelevant. In a similar manner, other market players have their own incentives to tolerate fraudulent ads. But does this mean fraud advertising is totally harmless? Alas, that’s not exactly true. In the next section, we will discuss in detail the effects it produces on different stakeholders.

Fraud Advertising: Implications for Publishers and Advertisers

Although there might be some incentives for different market players to tolerate advertising fraud, in the long run, most of them should inevitably experience its adverse effects on their industry. Here is a brief overview of how publishers and advertisers are affected by fraud in advertising.

Effects on Publishers

Effects on Advertisers

Fake ads enable malicious actors to enjoy the revenues intended for producers.Fraudulent ads undermine producers’ reputation and have a negative impact on their relationships with clients and advertisers.Certain types of fraud (e.g., domain spoofing) force publishers to drop their rates unreasonably low to remain attractive to clients.Due to the difficulty of distinguishing between real websites and scam ad space, it gets increasingly challenging for publishers to earn stakeholders’ trust.

Broadly speaking, fraudulent ads are a waste of a company’s advertising budget.Fake ads make it challenging (and sometimes impossible) to evaluate the effectiveness of an advertising campaign and pinpoint areas for improvement.Advertising fraud stimulates unethical behavior among advertisers as it is highly tempting to take advantage of the high performance indicators and the low cost that digital ad fraud offers.The stably increasing scope and scale of fraud in advertising undermine the overall confidence and interest in the advertising industry among the key stakeholders.

Advertising fraud is, hence, a serious problem that produces strongly negative long-lasting effects on all market players, especially on publishers and advertisers. The first step to mitigating the risks is to learn the basics of fraud detection, that is, learn to distinguish the main types of fraud.

Types of Fraud in Advertising

Fraudulent advertising activity comes in a variety of forms that progress and develop on an ongoing basis. Here, we offer a review of the seven most common types of digital advertising fraud.

Pixel stuffing

Pixel stuffing refers to fraud in advertising based on fake impressions. In contrast, to pay per click scams, malicious agents that perform pixel stuffing target ad networks use cost-per-mile (CPM) campaigns. This means they pay not for ad clicks but for views or the so-called impressions.

As follows from its name, pixel stuffing involves placing plenty of tiny ads into a single pixel of a web page. Those tiny ads, be they images or videos, are absolutely invisible to users. Sometimes when visiting a page, a user can hear audio but does not see its source which is most likely indicative of pixel stuffing. Needless to explain, this type of fraudulent ads costs advertisers a lot for they, in fact, spend large budgets on advertising that nobody actually sees.

Ad stacking

Ad stacking is largely similar to pixel stuffing. It also implies targeting ad networks that use CPM models and getting revenues for non-existent views. The idea is simple: imagine a web page with a normal advertising. This ad is real and you can examine it.  When we deal with ad stacking, this real ad is the top of a huge ad stack, under which there are dozens of ads of all sorts which we’ll never see. 

Those who have placed the ads under our real advertising still get their revenues because when we view the real ad, the views count towards all the fake ads beneath it. Just as in the case with pixel stuffing, ad stacking costs advertisers a fortune.

Cookie stuffing

This type of digital ad fraud involves a website dropping malicious cookies onto a user’s browser. These malicious cookies have nothing to do with the website one is visiting. They, thus, bring revenues to those who designed them instead of benefiting a brand’s affiliate partner who made real efforts to promote the brand on their website. Very often, an affiliate partner does not know their website drops third-party cookies onto its users for they might be embedded into extensions a website uses to enable certain features. Cookie stuffing is a serious threat to affiliate partnerships because it discourages affiliates from spending their time and resources on bringing traffic to other businesses.

Domain spoofing

This is yet another form of fraud in advertising, where malicious agents create a fake website and pass it off as a premium one. Very often, these fake platforms contain content scraped from a real premium website and since modern technology allows scraping all types of content including images, it is really hard to distinguish one from another. Domain spoofing is a real issue for advertisers as they are tricked and encouraged to pay the premium for low-quality ad space. Some signs that might hint at domain spoofing include but are not limited to a suspiciously low CPM,  the traffic unusual for a premium website, and an odd email listed as the owner of the domain.

Ad injection

As its name implies, this type of fraudulent activity is about the use of malware such as browser extensions or plugins in order to forcefully insert fake ads in places where they are unwanted. Or, it can also involve replacing existing publishers’ ads with new ones. As a result, whatever model is used, CPC or CPM, ad revenues are collected by malicious users. Because advertising fraud detection is challenging in the case of ad injection, publishers commonly lose a substantial portion of their revenues by the time they discover the malware.

Bots

When advertisers spend money on their advertisements, it is, above all else, assumed that this money will work to help the content reach the target audience. In other words, advertisers want real people to see their content and so they are interested in human traffic only. Non-human traffic, which is likewise inevitably present on the Internet, is invalid to advertisers and they do not want to include it in their measurements of campaigns’ effectiveness. 

It might be simple enough to distinguish valid traffic from invalid if we deal with General Invalid Traffic (GIVT), that is, the traffic generated by crawlers and data centers. A more challenging task is to detect Sophisticated Invalid Traffic (SVIT). The latter is generated by bots employed by fraudsters who would normally do their best to disguise bots’ activity as human traffic. The key issue with the use of bots in advertising is that they interfere with advertisers’ evaluation of their campaigns’ effectiveness.

Geo masking

This type of fraud in advertising has become possible due to the fact that the value of traffic differs by country, that is, traffic in the USA costs more than that in India, for example. What fraudsters do, in this regard, is that they hide the geo location of their traffic and sell the so-called low-quality traffic at the price of the premium one. Just as in the case of domain spoofing, geo masking causes advertisers to waste their budget on low-quality services and undermines the overall confidence in the advertising industry.

How to Detect Advertising Fraud

Now, how do you use the knowledge about different types of advertising frauds for their effective detection? First and foremost, you need to pinpoint the problem before it scaled up, and, after that, you start investigating which type of scams advertising is involved. Here are a few warning signs that might give you a hint you are dealing with fraudulent ads:

Poor performance

The first and the most important indicator of digital advertising fraud is the poor performance of your advertising campaign. After all, what is advertising fraud if not a scam that makes your advertising unprofitable? If hundreds of clicks produce no conversion at all, this is a good reason to look for the signs of digital ad fraud activity. In this regard, it might be particularly useful to compare how different ad campaigns perform across a similar period of time.

Alarming on-site analytics

One thing to keep in mind is that traffic is only one part of the goal your advertising campaign is targeting. A far more important one is engagement for you want your target audience to interact with the content in this or another manner. This might include visitors clicking through to other pages of the website, spending significant time on the website, filling out forms, and participating in promos. If your ad campaign shows great traffic rates but does not bring engagement, this might be a sign there is digital ad fraud involved.

Suspicious IPs

One more point to consider when analyzing your advertising campaign’s performance is the IPs of those who click your ads. If you get unrealistically large volumes of clicks from users in geo locations you are not actually targeting, this might be a sign of fraudulent activity. Similarly, if a large portion of your visitors has datacenter IPs, you can feel free to ask for commentaries from your ad publisher or agency. In any case, scanning IPs is a good strategy to detect suspicious activity that might be impeding your advertising campaign.

Unrealistic click-through rates

Finally, the simplest way to detect fraud in advertising is by taking a closer look at the click-through rates (CTRs) that your campaign is showing. Depending on the type of your ads, normal CTRs would commonly vary between 0.3% – 1%. If your CTRs are substantially higher than that and, especially if no real lead conversion follows, it is most likely that fake ads are involved.

Tips on Avoiding Fraud in Advertising

Apart from promptly detecting fraud, you can mitigate risks by taking a few measures that help to avoid it:

• Select your partners carefully: Find out as much as possible about your publisher or agency before entrusting them with managing your ad campaign. Pay special attention to such aspects as the source of their traffic, the CTRs they promise, and their reputation in the market. It is always a good idea to examine independent clients’ reviews to check if an agency has been ever accused of turning to fraudulent ads.
• Target specific audiences and countries: Narrowing down the target population and geography is a good way to minimize the risks of all sorts of pay per click scams including mobile click fraud. Like was previously mentioned, some countries are especially associated with digital advertising fraud activity and so it might be reasonable to be more careful when selecting the markets you want to reach with your advertising. 
• Avoid low CPC offers: While it is good to consider ways for cutting costs and maximizing profits, let us face the truth, the race for huge volumes of clicks at a low cost always ends with low-quality traffic. This does not mean that low cost-per-click (CPC) is incompatible with good traffic at all. Rather, you must be prepared for the fact that if your budget is real tough, the results will be at best moderate.
• Use anti-fraud software: Luckily, today’s market is full of anti-fraud solutions, which are specifically designed to detect ad fraud and beat it. It might be useful to, first, test the selected product with a free trial to ensure the software is as effective in anti-fraud protection as it promises.

Why Use Proxies to Beat Advertising Fraud?

One last thing that can benefit your anti-fraud measures is ad verification. In a nutshell, it involves verifying that your ads are placed and displayed as intended as well as detecting fraudulent activity. One key issue with ad verification is that to achieve the best results, it must be continuous and stable, which can be challenging due to several factors:

• Factor #1: IP ban. As you make many requests to a website trying to verify your ads, your IP will most likely get banned.
• Factor #2: Geo-restrictions. To verify ads on different websites, you need to somehow overcome geo-blocking.
• Factor #3: Anonymity. If you do not ensure full anonymity, fraudsters will soon detect your ad verification activity and will do their best to impede it. Ideally, you would want to make each new request from a new IP to ensure your activity does not look suspicious.

One solution that deals with all of the aforementioned factors is a proxy server. In a nutshell, this tool helps to hide your data, including your IP, as it sends your request through its own IPs. The more proxies you use, the fewer barriers there are to stable and effective ad verification. 

Thus, for instance, by using a large pool of rotating residential proxies, you do not risk getting an IP ban or being detected by fraudsters because each request will be sent from a new IP. Besides, the use of residential proxies with geo-targeting enables you to access websites in any country and overcome geo-blocking. To summarize, while ad verification is an effective anti-fraud tool, proxies are an instrument that allows ad verification to achieve the best results.

FAQs