What is ad fraud? What are the most successful ad fraud methods or techniques used by cybercriminals? Here is everything you need to know!

The Most Successful Ad Fraud Methods

MarTech reports that companies lost over $35 billion from advertisement fraud in 2020. According to Statista, digital ad fraud will reach a whopping $44 billion by 2022. Research highlights that fraud bots visit two in five ad-serving websites, and fraud takes $1 for every $3 spent on digital ads.

Besides, 36% of display advertisement clicks are invalid or fraudulent. According to Pixalate, desktop click fraud has increased from 20% to 25%, and smartphone click fraud has risen to 102% in recent years. Fraud Logix reports that 50% of ad impressions on internet explorer are bots. Read on!

What is Ad Fraud?

Ad fraud, also known as invalid traffic, is the fraudulent representation of digital ad impressions, clicks, data events, and conversions to generate revenue, leading to manipulated delivery channels and impacting an advertiser’s ROIs on media. Ad fraud can jeopardize a company’s brand reputation significantly.

Ad Fraud Methods

Marketers make substantial efforts to ensure their ad spending reaches real people. The purpose is to make their digital advertising campaigns successful. However, ad fraud exists in the digital advertising ecosystem, whether businesses and marketers like it or not.

Ad fraud is a deliberate activity that prohibits the proper ad delivery to the targeted audience by taking forms of bots and domain spoofing to siphon off money from ad transactions. Following are the most successful ad fraud methods.

Bots

Bots or robots are software designed to view ads, click on ads, and watch videos intentionally, siphoning off money from ad transactions. Bear in mind that malicious bots are more sophisticated and form networks with each running multiple bots. The 404bot fraud operation is a crucial example of a malicious bots network.

These are viruses that criminals can install on a computer unknowingly and then use computer resources unnoticeably. Most computers infected with bots are completely unaware of these viruses. Likewise, bot traffic is a sophisticated tool for criminals as it is challenging for businesses and cybersecurity experts to identify the fraudsters behind this traffic.

Domain Spoofing

Domain spoofing is another popular form of fraud that allows a criminal to impersonate a business website’s domain to pass off low-quality content or inventory as high quality. Criminals or hackers fool buyers into thinking their advertisements will go to a premium website. However, these ads go to a low-quality site.

Although the users and impressions are accurate, fraudsters falsely represent the inventory. Domain spoofing is a common but popular method used to mask unsafe websites. Today, advertisers are more concerned about brand safety, and criminals benefit by spoofing websites’ domains, such as video piracy sites, to conceal their identities and monetize the traffic. Common domain spoofing categories are:

•  Simple domain spoofing
•  Complex domain spoofing with custom browsers
•  Complex domain spoofing with human browsers

Pixel Stuffing and Ad Stacking

Pixel stuffing serves one or more advertisements, or an entire advertisement-support website, in a 1x1 pixel frame. That way, the advertisements are invisible to the user’s naked eye. However, pixel stuffing ads don’t generate results because users won’t see an ad.

Likewise, ad stacking is another harmful method to make illegitimate money by placing multiple ads in a single placement. A fraudster does this by placing advertisements on top of each other. The top ad is visible to the user. The advertiser will pay for an impression even if you don’t see the ads.

Device Fraud

Device fraud refers to hijacked devices or using bots to make money. For instance, an automated browser instance that visits sites, gets served ads and performs simple actions, such as mimicking humans or clicking on ads.

Impersonating a user to modify and manipulate ad serving can inflate the number of advertisements served to a website domain. Advertisers must recognize the methods in which it is reported before they tend to identify and prevent fraud.

App Fraud

App fraud usually occurs on a mobile device, tablet, or CTV. It involves different fraudulent activities or methods, such as spoofed apps, which refer to intentional misrepresentation of the application’s Bundle-ID to fool advertisers into spending money on non-brand or low-quality safe placements.

Likewise, fraudsters use hidden ads that run unbeknownst to users while the application is in active use. Backgrounds apps are another methods that load ads when the app is not open or inactive.

Cookie Stuffing

Cookies are a technique used by developers and marketers to track users’ behaviors. The purpose is to identify and analyze the ad efforts that led to conversions, such as clicks and purchases.

Cookie stuffing happens in various ways, and fraudsters use attribution models to trick users by adding a cookie from a different website. When the user converts, the website with stuffed cookies gets all the credit and receives money.

Location-Based Fraud

Advertisers pay money for their ads to show in a particular region. However, criminals and hackers send false location data, causing the ad to serve different locations. For instance, if you surf the internet on your smartphone from Florida and see ads for Seattle tourism companies nearly 3,000 miles away.

Cloud Hosting

Cloud hosting is another method used by fraudsters to display in-app impressions on devices hosted in the cloud. It aims to generate ad revenue for application creators. A

criminal controls and changes signals, such as geolocation and device ID, make it appear different devices.

User-Agent Spoofing

The fraudster sends requests to a web page with a “header,” providing basic information about the page loading location. Experts say that the browser description, including its type, operating system, version, and even plugins, is an example of user-agent spoofing.

The fraudster modifies the description to obfuscate data and information about the browser, leading to user targeting interference. Bots often use this method to hide their tracks.

Final Words

As advertising and marketing budgets continue to shift to the online platform, ad fraud remains the most significant hindrance that the advertising industry has to overcome. Bear in mind that ad fraud shows no or little sign of disappearing from the advertising platforms any time soon. However, thanks to advanced AI-based tools and machine-learning algorithms, the advertising industry can tackle the growing monster

AdTech Platforms Can Limit Ad Fraud with DeviceAtlas

Primarily a source of real-time, rich and actionable device insights, DeviceAtlas bot detection also allows for the identification of known bot traffic, enabling these clicks and visits to be treated differently to that of a human user.

Having an up-to-date, accurate and real-time bot identification capability, provided by DeviceAtlas bot detection, gives AdTech platforms a technical and competitive advantage.

DeviceAtlas is used by major players in the AdTech space, such as Adjust and SpotX. Learn more about DeviceAtlas’ bot detection, here, and mobile advertising and targeting solution, here.