🤖 BIG ISSUE Ad Fraud 💸
- by
- Alec Newcomb
Bad News: Ad fraud is getting worse. Good News: AI is getting smarter.
BIG ISSUE: AD FRAUD 🥸
Read Time: 9 minutes
Digital marketing is plagued by a persistent threat: Ad Fraud.
It encompasses tactics like: Fake clicks, inflated impressions, and fraudulent views, & costs advertisers billions of dollars annually.
It also erodes trust within the industry.
Making our job harder.
In this deep dive, we’ll explore how AI transforms ad fraud across PPC, display, video, and programmatic channels…
👇🏼
In Today’s Read 🗞️
- What is Ad Fraud??? An expense we can live without.
- Types of Ad Fraud
- How it directly affects you
- Our secret weapon against Ad Fraud: AI
- The real issue: Your mindset
- Your way forward with top bot-detection tools (tried and tested by us)
What is Ad Fraud? (It’s Expensive) 💸
Defining Fraud: Ad fraud and Bots come in many forms, each designed to siphon budgets without delivering results.Common types include click fraud in PPC campaigns, where bots (or competitors) generate fake clicks to exhaust budgets, and impression fraud in display advertising, using tactics like ad stacking and pixel stuffing to inflate metrics without delivering value. 😬
Basically, if ad fraud was an emoji = 💸
Common Types of Ad Fraud
Click Fraud: 🤖 Bots or competitors generate fake clicks to exhaust budgets.Impression Fraud in Ads : 📊 Techniques like ad stacking and pixel stuffing inflate metrics without delivering value.
Video ad fraud involves fake video views and ad injection techniques that trick advertisers into believing their ads have been genuinely seen.
Programmatic advertising is most vulnerable, with fraudsters using domain spoofing to impersonate premium websites and auction manipulation to inflate ad prices.
To make matters worse, the sophistication of these tactics continues to evolve, making the fight against fraud an ongoing challenge.
Why should I care? 🤔
A picture tells a thousand words it’s 15-29% of your Ad Spend…
A big part of combating ad fraud is having the Top 2% of Experts help you. Talk with an expert today to get your Fraud Evaluation.
How AI Combats Ad Fraud 🥷🏼
Put simply: AI offers a powerful addition to traditional fraud detection methods. It leverages machine learning algorithms to process vast amounts of data (faster) and identify fraudulent activities in real-time.
Faster Detection = More Money Saved.
Here’s How AI Does It:
Real-Time Analysis
- Instantaneous transaction verification
- Live traffic pattern monitoring
- Dynamic risk scoring
- Immediate threat response
Pattern Recognition
- User behavior fingerprinting
- Device fingerprinting
- Traffic source analysis
- Click pattern analysis
- Time-based activity analysis
Anomaly Detection
- Statistical outlier identification
- Behavioral deviation tracking
- Suspicious pattern flagging
- Velocity checking
- Geographic anomaly detection
The big issue: advertiser Mindset 🧠
The main challenge I see is that advertisers commonly don’t believe they actually have this issue.
I encourage you to have a scroll through > 10 case fraud studies:
- The Weasel Fraud (2023) – A sophisticated scheme where Wease.IM conducted unauthorized secondary auctions within display ad units, manipulating the advertising ecosystem.
- VASTFLUX Operation (2023) – A massive mobile ad fraud scheme that affected over 11 million devices, injecting malicious JavaScript code into legitimate ads.
- Hydra Scheme (2020) – A sophisticated fraud operation that used fake apps and bot networks to generate artificial traffic and steal $130 Million in advertising budgets.
- Rapid Fire CTV (2021) – A large-scale click fraud operation $20 Million a month that targets server-side ad insertion (SSAI) as a means to “spoof” CTV inventory across a large number of apps, IP addresses and devices.
- Methbot/3ve Aftermath (2015-2022) – One of the largest ad fraud operations, which generated fake traffic through data center servers and bot networks.
- PARETO Operation (2021) – A sophisticated CTV fraud scheme that affected over 1 million mobile devices, generating fake ad impressions on streaming platforms.
- TERRACOTTA (2020) – A massive mobile ad fraud operation that infected Android devices with malware to generate 2 Billon fake ad clicks.
- The 404Bot Scheme (2020) – A sophisticated fraud operation that exploited webpage errors to generate fake traffic and steal advertising revenue.
- DrainerBot (2019-Now) – A major mobile ad fraud operation that drained users’ data and battery life while generating fake ad impressions.
- Video Optimization Fraud (2023) – Part of the estimated $84 billion lost to ad fraud in 2023, involving fake video views and manipulated metrics
Tools we use to stop the Bot 🔨
Depending on your budget, media channels, and level of risk, here is my list on some tools to start with to combat the ad fraud issue
- Cloudflare – Goes from Free to Enterprise. If I only had one tool to battle bots I’d start here.
Low Budget, Basic Risk Mitigation
- Ads.txt: Prevents unauthorized selling of progammatic inventory.
- Google Analytics: Look for Zero time on site and other bot signals (Same IP, City, Device)
- Google Ads Verification Reports: Utilize built-in platform tools to identify suspicious activity.
Medium Budget, Multi-Channel Fraud Protection
- ClickCease: For $80 a month protects against click fraud across PPC platforms like Google Ads and Meta Ads.
- AppsFlyer Protect360: Helps protect mobile ad campaigns from fraud.
- Integral Ad Science (IAS): Offers insights into invalid traffic (IVT) for display, video, and programmatic ads.
High Budget, Advanced Multi-Channel Solutions
- Human (formerly White Ops): Offers sophisticated bot detection across devices and environments.
- Forensiq by Impact: Provides cross-channel fraud detection, including app install fraud, bot detection, and impression fraud.
- Pixalate: A comprehensive tool offering fraud prevention and detection across OTT, mobile, and programmatic ads.
- Fraudlogix: Specializes in preventing real-time, cross-channel ad fraud, including display and mobile.
Ad/Bot fraud in the age of AI will be a significant challenge for the advertising industry, but AI offers a powerful solution. Success requires you to take a proactive approach—advertisers must stay informed, invest in the right tools, and be prepared to adapt as fraud tactics evolve.
