Ad fraud is showing no signs of slowing down. In fact, the latest data indicates that it will cost businesses a colossal €120 billion by 2023. But even more worrying is that fraudsters’ tactics are becoming increasingly sophisticated. Even big-name companies such as Uber, Procter & Gamble, and Verizon have been victims of ad fraud in recent years. These high-profile ad fraud cases show that no brand is too big to be targeted.
So what does this mean for the rest of the industry? The answer is simple: every ad company is just as at risk as the big guns, regardless of size or budget, if not more.
In this article, I summarize some of the biggest and most shocking ad fraud cases we’ve witnessed in recent years. I’ll also cover the vital lessons marketers and advertisers can learn from them to avoid wasting their own budgets.
The biggest ad fraud cases in recent years
Fraudsters use everything from fake clicks and click flooding to bad bots and fake ad impressions. They’ll go to any lengths to siphon critical dollars from your ad budgets.
Let’s take a look at some of the most high-profile and harmful ad fraud cases of recent years. These have impacted some of the most well-known brands around the world.
Methbot: $5 million a day lost through fake video views
In 2016, authorities discovered that Aleksandr Zhukov, the self-proclaimed “King of Fraud”, and his group of fraudsters were making between $3 and $5 million a day. They did it by executing fake clicks on video advertisements.
Often cited as the biggest digital ad fraud operation ever uncovered, “Methbot” was a sophisticated botnet scheme. It defrauded brands by enabling countless bots to watch 300 million video ads a day on over 6,000 spoofed websites.
Because video ads have a relatively high cost-per-mille (CPM), Aleksandr and his group could steal millions of dollars a day by targeting high-value marketplaces. Some of the victims of the Methbot fraud ring include The New York Times, The New York Post, Comcast, and Nestle.
In late 2021, a court sentenced Aleksandr Zhukov to 10 years in prison and ordered him to pay over $3.8 million in restitution.
Uber: $100 million wasted in ad spend
In another high-profile case, transportation giant Uber filed a lawsuit against five ad networks in 2019 – Fetch, BidMotion, Taptica, YouAppi, and AdAction Interactive – and won.
Uber claimed that its ads weren’t converting, and ultimately discovered that roughly two-thirds of its ad budget ($100 million) wasn’t needed. That was because ad retargeting companies were abusing the system by creating fraudulent traffic.
The company discovered the extent of the ad fraud when it cut $100 million in ad spend. Rider app installs didn’t change at all.
In 2020, Uber also won another lawsuit against Phunware Inc. They discovered that click flooding, not real installs, produced the majority of the Uber app installations the company claimed to have delivered.
Criteo: Claims sues competitor for allegedly running a damaging counterfeit click fraud scheme
In 2016, Criteo, a retargeting and display advertising network, claimed that competitor Steelhouse (now known as MNTM) ran a click fraud scheme against it. The alleged goal: damage Criteo’s reputation and fraudulently take credit for user visits to retailers’ web pages.
Criteo filed a lawsuit over Steelhouse’s alleged actions: using bots and other automated methods to generate fake clicks on shoe retailer TOMS’ ads. Criteo claimed this ultimately cost it the TOMS account. Criteo has accused Steelhouse of committing this type of ad fraud to prove it offered a more effective service than Criteo’s own.
Twitter: Elon Musk claims that the platform hosts a high number of inauthentic accounts
The Elon Musk and Twitter saga is one of the biggest and most tangled tech deals in recent history. It doesn’t end with Twitter suing Musk for backing out of his $44 billion deal to buy the company.
In yet another twist, Musk has also claimed that Twitter hid the real number of bots and fake accounts on its platform. He has also accused the company of fraud, alleging that these accounts make up around 10% of Twitter’s daily active users who see ads. That would mean 65 million of Twitter’s 229 million daily active users never see them at all.
6 lessons marketers can learn from these high-profile ad fraud cases
All of these cases demonstrate that ad fraud is a pervasive, ubiquitous practice. It has incredibly damaging, long-lasting effects on even the most well-known brands around the world.
The bottom line: marketers and advertisers can no longer afford to ignore ad fraud if they want to reach their goals. Here are some of the most important lessons and takeaways from these high-profile cases.
1. No one is safe from ad fraud
Everyone — from small businesses to large corporations like Uber — is affected by ad fraud. Plus, fraudsters have no qualms about location. No matter where in the world you operate, you’re susceptible to the consequences of ad fraud.
2. Ad fraud is incredibly hard to detect using manual methods
Fraudsters use a huge variety of sneaky techniques and channels to scam advertisers, making ad fraud incredibly difficult to detect manually. This is especially true if organizations lack the right tools and people dedicated to tracking and monitoring ad fraud.
Even worse, when organizations do have teams monitoring ad fraud, those teams are rarely experts. They often can’t properly pore through the sheer amount of data each campaign produces to accurately pinpoint it.
3. Ad fraud wastes your budget, distorts your data, and prevents you from reaching your goals
Ad fraud drains your budget significantly, which is a huge burden for any company. However, there are also other ways it impacts your ability to deliver results.
For example, fake clicks and click bots lead to skewed analytics. When you assess advertising channels and campaigns based on that traffic and engagement, you’re relying on flawed data. That flawed data then shapes your future strategic decisions.
Finally, stolen budgets and a reliance on flawed data seriously compromise your ability to reach your goals.
4. You’re likely being affected by ad fraud already, even if you don’t know it yet
As seen in many of these cases, these brands suffered massive damage simply because they didn’t realize fraudsters were targeting them. Plus, because awareness of ad fraud is generally so low, ad fraud is highly likely already affecting you.
5. You have options to fight the effects of ad fraud
Luckily, as these cases demonstrate, you have options to counteract the impact and losses caused by ad fraud. These include requesting a refund or even building a case to sue. In such cases, ad fraud detection solutions are extremely useful to uncover ad fraud and gather evidence.
6. But the best option is to prevent ad fraud from the get-go
The best ad fraud protection is ad fraud prevention. The only surefire way to stop fraudsters from running sophisticated fraud schemes against your campaigns is to implement equally sophisticated solutions. Anti-ad fraud software that uses machine learning and artificial intelligence helps you keep fraud at bay. That frees you up to focus on what matters: optimizing your campaigns and hitting your goals.
This article was originally published on Digital Marketer.