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Ad Fraud: A Plague on Display Advertising

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How much do you spend on ad fraud? This is the simple question at the heart of a massive issue currently plaguing display advertising. 

On average, 45% of ad spend was wasted on click fraud in 2019 – totaling over $40 billion. By 2023, this number is expected to reach over $100 billion worldwide. Interesting data reported by Dr. Augustine Fou even posits that Ad Fraud can reach as much as 95% of a company’s existing display ad spend.

Imagine spending $100,000 on a new advertising campaign and immediately burning $95,000 of your budget. This is not acceptable. Eventually, all advertisers will demand a new solution.

So, What Exactly is Ad Fraud?

Ad fraud is a crime that cheats advertisers, publishers, and users out of billions of dollars annually. It risks the future of the digital advertising industry and threatens to undermine trust in advertising. 

Ad fraud occurs when marketers overpay for ad inventory that they believe is seen by real human users but is in fact never viewed, engaged, or clicked on. It’s also known as “viewable impressions fraud”, “bot fraud”, “click fraud”, and “Non-Human Traffic” (NHT).

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What Kinds of Online Advertising Fraud are There?

There are many types of online advertising fraud, but the most common are:

  1. Hidden ads:  When an ad is shown in such a way that the user doesn’t actually see it. This kind of fraud targets networks that pay based on views instead of clicks.
  1. Domain spoofing: Domain spoofing is a form of fraud where a fraudster impersonates a company’s domain in order to pass off low quality inventory as high quality. Fraudsters fool buyers into thinking their ad is going to a premium site when in reality it’s going to a low-quality website or one that is unsafe.
  1. Ad Stacking: Placing multiple ads on top of each other in a single placement where only the top ad is viewable. Advertisers are paying for impressions even when users are not seeing their ads.
  1. Botnet fraud: Hackers can install bots on your computer without you knowing it. They then use the bots to surf the web, click on ads, and play videos. This increases traffic while passing the expense on to the advertiser.
  1. Location Fraud: Advertisers pay a premium to have their ad served in a particular region, but fraudsters send false location information with the ad actually serving elsewhere.
  1. Blank pages with no content that only contain a few ads.

How do we Eliminate Ad Fraud?

Eliminating ad fraud might not be as difficult as it looks. At its core, eliminating ad fraud requires us to look at the fundamental way display advertising works and innovate on its glaring flaws. 

For example: Current display ads rely on click-throughs to drive traffic to websites, which provides an opportunity for bots to conduct click fraud. The solution: Bring the entire customer journey inside the ad. This way no bots can partake in click fraud, allowing an advertiser to pay only for direct engagement with human users. 

At TransAd, we are excited to showcase the first ever “In-Ad” landing page display ads. These ads use our patented technology to eliminate ad fraud, while increasing ad engagements.

Now Back to the Original Question. How Much do you Spend on Ad Fraud?

This is not a trick question. We really want to know. So we are conducting a rudimentary, albeit unscientific, fully disclosed survey. 

If you know the fraud stats on your ad spend, please send the % as your comment. Let’s see what we uncover.