Programmatic Ad Fraud: Fraudsters’ Top 5 Favourite Ad Fraud Methods

The last couple of years has seen a dramatic rise in the number of people using programmatic advertising. According to eMarketer programmatic display spending will reach nearly $33 billion in 2017. This rise and large spend quantity means that the RTB (real-time bidding) landscape has seen a substantial rate of evolution with new features, capabilities and options for advertisers springing up on a regular basis.

On the darker side, this development in programmatic means there is inevitably a rise in fraudsters and cyber fraud intelligence growing with the number of fraudsters. This can be difficult to detect and prevent costing advertisers across the globe a lot of money – CNBC suggested recently that businesses could lose up to $16.4 billion to advertising fraud.

What is Ad Fraud?

In a nutshell, ad fraud is where an advertiser is paying for traffic via their ads, yet the traffic may not be as expected. On the other end of this, there will be a fraudster who has used methods to drive traffic (or what may appear as traffic) through the ad and capitalise on the click or impression costs.

Ad fraud can be broken down into 2 categories:

Technical fraud: As the name suggests, this type of fraud is designed to generate activity – or emulate activity including clicks, impressions, etc. An example of this is ‘attribution fraud’. Such activity includes dropping onto a user and when that user purchases/converts, the original publisher is credited as opposed to the method that has been taken.

Compliance fraud: This is more about ‘breaking the rules’ that have been outlined by the platform. This method can be a little easier to detect than technical fraud as it involves being purposely deceitful.

Examples of such fraud include, delivering false claims within the creative, placing ads where they cannot be seen (more on this below) and rebrokering which involves the publisher publishing on another publisher (which makes it very hard for the advertiser to attribute where the activity originally came from).

The Most Popular Ad Fraud Methods

Without further ado, here are the top five fraud methods (and realistically what you came to this article to read):

Domain-based fraud

1. Ghost sites

Boo! One of the hardest fraud methods for advertisers to spot. Ghost sites create ‘content farms’ full of topics that usually appeal to marketers. They can then use bots to make it appear as though there is genuine traffic going to the site.

From here, these ghost sites are introduced to ad exchanges. Most major ad exchanges will pick up on these being spooky entities rather than genuine sites, but occasionally, one or two exchanges could miss this and the ghost site gets listed.

The chances are, the exchange will notice in a fairly short period of time, but by this point, the ghost site will have made money, legally too. Thus allowing the fraudster to make money whilst creating a new content farm should they wish to begin their next project.

2. Hidden ads

Hidden ads are one of the most popular methods of programmatic ad fraud. Also known as ‘ad stuffing’ or ‘ad stacking’, hidden ads is a method whereby the site will have ad placements on top of other ad placements meaning only one can be seen or running ad placements in 1×1 pixel spaces.

Both methods mean the ads are unlikely to be seen or even clicked but they still generate impression stats (bear in mind as an advertiser that if you use a CPM model you’ll be charged per impression rather than per click).

3. Domain spoofing

If you thought the above two methods were scary, look away now. Domain spoofing is on the rise and involves using a fairly simple line of code to change the URL of sites. This can make it appear to advertisers that these sites (often fake or adult sites) are actually that of premium sites on a whitelisted ad exchange.

Whitelisted exchanges typically contain (and are assumed by advertisers to contain) the most reputable sites in which to advertise, meaning the advertiser feels a sense of security using whitelisted exchanges, often bidding significantly more for them.

Invalid traffic (IVT)

4. Proxy traffic

Proxy traffic, as the name suggests means the traffic has been rerouted. This method involves rerouting and relaying traffic to the point where the data becomes anonymous which means it’s hard to attribute any data and information.

You may have heard of this referred to as the ‘Tor network’. Tor is an anonymity network designed to conceal the identities of users from surveillance and analytical tracking. This can be used for completely legitimate reasons. However, it is also a common method of proxy traffic fraud.

5. Automated traffic

Also known as non-human traffic (NHT). This is, hands down (pun fully intended), the most common method of ad fraud.

This is where bots are used to simulate human traffic. This is presented in a range of sophistication, spanning from the very basic crawler bots that act as though they’ve seen an ad (counting as an impression) to bots with capability of completing a conversion/goal. If you thought these pesky bots were unable to fill out a form, think again!

How to Prevent it from Happening to You

It can be hard to spot ad fraud, but there are a number of things you can do to help prevent wasting money through the above methods:

1. Ask to see where your ads have appeared: Spooling through a list of domains in which your ads have appeared can be a monotonous task, however, it is well worth keeping an eye on this. You can look out for ghost sites, low quality sites and make a list of domains you definitely do not want to appear on.

2. Exclusions: You probably already know how paramount it is to set the type of sites you do want to appear on, but advertisers often forget to state the type of sites they don’t want to appear on.

Whilst specifying your exclusions, make sure that you exclude anything that hasn’t been vetted by the ad exchange too as this could be a huge risk from not only a fraud point of view but from a brand angle too. You don’t want to remarket to someone about your brand on a distasteful site (for example).

3. Consider using private marketplaces (PMP): Due to the way the PMP works, the ad inventory is typically of higher quality. This does usually cost more, however it sees less fraud (12% instead of the usual 30% according to the drum).
Could Liberty help you with the above? Are you worried you could be experiencing ad fraud but you’re not sure how to tell or what to do to prevent it? Get in touch with us to help safeguard your brand, reputation and money.

Alternatively, learn more about programmatic by reading: Our Guide to Programmatic Media Buying

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Why Facebook’s Conversion Data Does Not Match Google Analytics’
How to Increase Conversions While Keeping Costs Down
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