15% Of Your Ad Tech Budget Might Be Lost To Fraud: Here’s How To Stop It

Last December, the Advertising Bureau (IAB) found that online advertising fraud now costs advertisers $8.2 billion per year. Chances are some of those dollars were yours.

It’s up to you to protect yourself. I’m going to give you a rundown on how to avoid ad tech fraud, and save yourself a lot of money.

Hey, anyone there? CPI exposes a lot of your products to automated bots and spiders

You might assume that an impression equals a person viewing your ad. Actually, all that impression means is that a browser makes one request to be served with one advertisement from one ad network. Almost half of the impressions made to your ad might be fake online traffic and activities, artificially generated by automated bots and spiders. The most optimistic sources estimate this “bot traffic” to be between 10-20% of all traffic, while some experts claim it’s closer to 50%.

Every time a bot loads a webpage, the browser makes a request for an ad network to load an advertisement. You pay for this action even though no human is seeing your ad! In these conditions it’s hard to justify CPI campaigns. This is a little-known fact among publishers. Tons of money is wasted on these useless impressions. You have to take these invisible, wasted impressions into account when you measure the potential effectiveness per cost of your CPI campaign.

Main publishers’ frauds and how to avoid them

There are bad eggs in every batch, and website owners are no exception. Some are definitely on the low end of the morality scale. There are website owners who maximize their profit using immoral and sometimes illegal ad-tech tactics.

These are the major methods used by fraudulent publishers to get more money without giving any results in return:

• Stacking ad units on top of each other, so only the “top” impression is seen but all of the ads bring profit.
• Automatically redirect visitors to other pages such as landing pages or other advertisements.
• Shrinking ad units down so the site can put many of them on one page, while none of the ads can be seen effectively by the visitors.

Unfortunately, these techniques and others are pretty common. On top of that, publishers are not the only ones to be caught in fraudulent activities. Ad networks have been found to send part of the money to corporate siblings of the media buyers. They then lie about how much placements cost, overcharging advertisers on a massive scale.

What are the best ways to protect your marketing budget from fraud?

The most efficient way to avoid fraud is to base your marketing efforts on CPA rather than on CPM and CPI. Campaigns based on results are far less likely to suffer from fraud, simply because the publisher and advertiser share the same interest: both want a sale! In other forms the publisher is likely to care less for your profit, since it is not correlated to the income they make.

Other ways to reduce your fraud risk is to block countries with high bot traffic. Installing ad fraud protection software can help as well. Since fraud is becoming increasingly common in the ad tech world, it should be taken into consideration when planning your future campaigns.