Click Fraud: Protect Your Digital Ad Spend – Multichannel Merchant

Beware the click fraud lurkers in the weeds!

While the rate of growth has slowed somewhat, ecommerce continues to find new adherents and stickiness among consumers. This has led most online retailers to invest more of their marketing budget on advertising, estimated at $58.5 billion.

Unfortunately, this increase has led to a new wave of ecommerce ad fraudsters. In 2020 alone, online retailers lost over $3.8 billion to click fraud. These bad actors see ecommerce ads as free money opportunities, employing shady tactics to rip off advertisers.

To stop click fraud, brands must be knowledgeable about it, learn why they tend to be the primary targets, and be aware of the various click fraud schemes.

A Rich Target

The average monthly ad spend by most ecommerce businesses is a significant contributor to the rising attraction of fraudsters. The owners of most ecommerce websites spend up to $1,000 monthly on advertising, and it can range up to $20,000 or even $150,000.

To get a piece of this ad spend action, fraudsters render ecommerce ads ineffective by spamming them with invalid clicks, a process known as click fraud.

Click Fraud Attacks

Online retailers fear losing ad spend to click fraud, with an estimated one in five clicks in a PPC campaign being fraudulent. Fraudsters use techniques that trick online retailers into thinking their ads are converting. Following are three main types of click fraud:

Ad Injection

This involves inserting ads or replacing existing ones without the site owner’s permission. Since these ads are monetized, the fraudsters – not the publisher – get credit anytime someone clicks. This type of click fraud sneaks in through users downloading shady plugins, extensions, software or attachments. A good example is the Rewards Arcade ad injection attack on Facebook.

Ad Stacking

Ad stacking involves placing or “layering” multiple ads on top of each other in a single placement, making only the top ad visible. Advertisers get charged for the impressions, clicks and traffic of the top ad — even though their ads are hidden.

Click Farms

Bots are responsible for an astounding 42.3% of all internet activity. While they can be good or bad, the latter category controls 27.7% of all website traffic. Fraudsters create these bad bots and interconnect them to mimic human activity, enabling them to quickly generate fake clicks targeting ecommerce PPC campaigns.

While generating a large number of clicks using bots is often detectable, with humans, it’s far more difficult to see. In the highly prevalent click farm scheme, workers are paid to generate invalid clicks on paid advertising. The typical impact on ads is high click-through rates and traffic, but zero conversions.

The Lasting Effect of Click Fraud

As only legitimate buyers make an ecommerce business go, one that’s known to display illegal or sensitive content — even if injected —-could ruin or damage its reputation. Ad injection involves sneaking an ad into a spot it shouldn’t be on a publisher’s website, using malicious software. This can affect the customer’s relationship with the brand, as they might believe their private data isn’t secure.

The various forms of click fraud use techniques that drain most, if not all, of the marketing budget using false impressions and clicks. With most businesses spending 1%-40% of gross revenue on marketing and advertising, the lack of positive return on ad spend (ROAS) negatively impacts your bottom line, leading to wasted marketing budgets.

Lastly, false impressions and traffic from click fraud skew your marketing metrics and data. This means you keep running marketing campaigns using data that doesn’t yield results. Ultimately, it leads to more money wasted on ads yielding little to no sales.

How to Stop Click Fraud

Click fraud takes so many forms with several techniques that it’s hard to track them all. While no single solution will fix every problem, being adept at identifying the problem will help to ensure ad fraud doesn’t drain your entire advertising budget. Some tips to help fight click fraud include:

Inspect Your Traffic Sources

Monitoring the places from which your ad receives the most traffic is the first step in detecting ad fraud. First, analyze where you’re getting the most clicks and look at the conversion rate. If you notice the clicks from a certain region are high but have a low session duration, that’s a red flag. That means traffic from that location visits your ads and bounces almost immediately. To address this, collect the IP address of that region and add it to your blacklist to block ads from showing in that area.

Use ads.txt Files

Short for Authorized Digital Sellers, ads.txt is a text file with a list of authorized ad vendors who can resell a publisher’s inventory. This means advertisers want to ensure publishers have ads.txt enabled on their website before deciding to place your ads. With this, ad fraudsters can’t use techniques such as domain spoofing and inventory arbitrage to steal your ad profits.

Also, some irregularities to watch out for include:

  • Traffic from non-targeted locations
  • A sudden spike in traffic at different hours
  • High bounce rates

It’s been said that “sunlight is the best disinfectant.” This information on click fraud, including how to detect and stop it, will make you better armed against the hit to your brand’s reputation and help prevent ad budget theft.

Jacob Loveless is CEO of Edgemesh

Leave a Reply

Your email address will not be published.