Who Exactly Is Behind Ad Fraud?
There’s a lot of talk about how fraudsters drain budgets, ruin campaign data, and tarnish reputations. But in reality, the term “fraudsters” actually covers a handful of distinct groups, each with their own skill, commitment, and threat level.
Here, we identify the five main perpetrators behind ad fraud, including their motivations and the type of threats they pose to your organization.
The 5 main perpetrators of ad fraud across the digital advertising and marketing industry
Let’s take a look at the entire spectrum of fraudsters in the digital advertising and marketing industry, as well as their level of experience, commitment, and threat.
1. Black hat marketers
The opposite of “white hat” marketers, black hat marketers rely on their extensive knowledge of SEO, affiliate marketing, or webmaster background to manipulate ads. These tactics make the ads more easily found and can appear as something they’re not in order to attract more clicks.
Black hat marketers can also manage bots that click on competitor ads to waste their budgets and sabotage targeted marketing efforts. Often, they are publishers themselves who own the media where the ad will be shown, meaning they can control it and create ad fraud schemes on it.
These types of fraudsters are considered to be experts in ad fraud practices. Since the payouts and rewards can be extremely lucrative, their commitment is very high.
Many organizations think that running PPC ads, display, and video ads automatically opens them up to competitors targeting their ads with invalid clicks. And, yes, competitors will click on your Google Ads or other PPC ads in an attempt to sabotage your marketing efforts.
While competitor-based foul play can slowly drain your budget (since you are paying for non-convertible clicks), negatively impact your ad score, and drive up your cost per click (CPC), the threat level of competitor ad fraud is very low in comparison with other perpetrators. Plus, as the leading ad network, Google is particularly good at detecting and preventing competitor sabotage.
3. Fraudulent ad networks
Not all ad networks operate legitimately. Some knowingly carry out and/or contribute to ad fraud practices by existing as the middle-man between black hat marketers and ad exchanges. Others turn a blind eye to the ad fraud happening beneath their nose since its existence helps line their pockets.
On the surface, many of these ad networks appear to be completely legitimate and have access to significant advertising budgets of brands and agency partners.
4. Unorganized, ordinary fraudstersAd fraud is attractive for those with backgrounds in other cybercrimes (as well as spam and phishing) since the payouts can be very rewarding and they are already skilled in many of the ad fraud techniques used to perform it.
Since very few criminal complaints are made when ad fraud occurs, alongside the potential for high gains to be made, these common cybercriminals continue to be a threat to the industry.
5. Sophisticated and organized criminal fraudsters
This group poses by far the most significant threat to the digital advertising and marketing industry. It’s even been claimed that the activities performed by these highly-organized criminals can cause wider economic instability.
This group does not consist of the 'hoodies behind a computer screen in a dark room' that we see depicted in the media. Instead, they are large, complex organizations. These criminals create elaborate fraud schemes that generate automated and fake activity to get paid on a CPM, CPL, or CPC basis. These schemes can result in earning millions of dollars.
The most notorious case of this type of group is the Methbot operation, where fraudsters stole $7 million by making deals with ad networks to place online ads and then using bot farms and rented servers to mimic users. These “users” then visited domain-spoofed versions of websites such as the New York Times.
How can your organization effectively protect itself against these perpetrators?
Each type of fraudster listed above has their own motivation for engaging in ad fraud, be it money or damaging their competition. They also have different skill and commitment levels and pose varying levels of threats to your organization.
However, ultimately, no matter who performs the fraudulent activity, the outcome is the same: your ad campaigns are ruined, your budgets are drained, and your data is flawed.
That’s why you must prioritize a proactive approach to ad fraud prevention with a robust ad fraud prevention function that helps you not only avert fraud but improve your key business metrics too.
With fraud prevention built into your overall business strategy, you’ll be more than prepared to protect your campaigns, achieve your business goals, and make better business decisions.
To find out how Opticks can form part of your fraud prevention process, contact us now.