Ad fraud: here’s how digital marketers are dealing with the billion dollar monster

Online advertising has revolutionised the way brands engage with their consumers. However, this multi-billion dollar industry is plagued by a growing problem of ad fraud. 

It refers to any malicious activity that artificially inflates ad impressions, clicks or even conversions. Typically, fraudsters employ techniques such as SDK spoofing, bot traffic and ad stacking, to trick the marketers. As a result, brands end up handing out significant portions of their spends for ad placements that never reach the audiences. 

The scale at which this scam is taking place is staggering. According to Statista, an online market and consumer research platform, digital marketers could incur an estimated $100 billion globally in 2023, on account of ad fraud.

To tackle this growing menace, many third-party adtech companies have developed fraud detection algorithms and verification services to help digital marketers advertise more efficiently. 

Himanshu Nagrecha, vice president, South Asia & India, TrafficGuard, an online ad fraud detection platform, points out that India has about 10% share of total global ad fraud costs. 

“With how rapidly digital advertising is being adopted in the country, we can only expect these numbers to grow up.”

Depending on the types of channels brands place their ads on, the encounters with ad fraud can vary. 

Nagrecha explains, “By and large, the first encounter with online fraud occurs from the origin of the traffic, especially with regards to pay per click (PPC) solutions. Other advertising roadblocks in PPC solutions include non-genuine and non-incremental engagements.”

Besides PPC spoofing, digital marketers are also battling misattribution on account of invalid traffic. Nagrecha explains that the problem lies in performance or attribution-led model designed for sales, app installs or lead generation. 

“In this case, the traffic source leads to misattribution, where bots and invalid traffic are stuffed into the conversion funnel of the advertisers. The intent is to steal from organic traffic sources. Essentially, clients end up paying for conversions that should be identified as free.”

Conventionally, digital marketers try to address ad fraud through in-house tech solutions, or by assessing the data and analytics available from their websites or landing pages. Google and Facebook are also providing brands with online solutions. 

So, what’s the need for third-party fraud prevention platforms?

Nagrecha responds, “The beauty of partnering with third-party solution providers like TrafficGuard, is that the integration allows marketers to monitor the complete user journey - from click to post-click. This way, we can catch any kind of misattribution in real time.”

Speaking about the methods that TrafficGuard uses to provide solutions for the brands, Nagrecha reveals, “From a tech perspective, we look at more than 200 different data sets for each click. All of this is very intuitive, with a lot of machine learning and algorithms behind the mechanics.” 

“Our data sets are pretty robust, because we work with more than 4,000 advertisers across different channels, including PPCs, web affiliates or mobile apps.”

With several industry reports ringing alarm bells for an exponential increase in ad fraud, Nagrecha believes that adopting fraud detection solutions is necessary for the brands. 

“There couldn’t be a better time to adopt a technology like this. There are a lot of queries about profitability, CACs, customer lifetime value, etc. If you look at it, all of the solutions provided by TrafficGuard are meant to ensure that the marketing spends of brands are deployed in acquiring actual and organic users, so they can scale up in confidence.”

For a fairly good amount of time, marketers have sought a single solution to their digital dilemmas. A single tech stack that would suffice all the digital needs for the brands. This approach, however, lacks a maker-checker ecosystem causing a lot of conflicts. Nagrecha opines that the industry is gradually seeing a paradigm shift, with advertisers now investing in multiple tech stacks for each vertical of digital advertising. 

“Advertisers are now seeking a specialised tech stack for each level of digital marketing. These include attribution platforms, verification solutions, audience and media buying platforms and more.”