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Ad Fraud – what is it, how much does it cost, and why do you need to protect yourself from it?
Clicking on ads – dangers and remedies
Ad budgets being clicked away by competitors or bots cost advertisers $19 billion in 2018, representing 9% of the total online advertising budget in the United States. The scale of this phenomenon is therefore very large in developed markets and deserves closer scrutiny.
Traps that await your advertising
According to a Juniper Research report, advertisers will lose an estimated $80 billion in ad click fraud next year, equivalent to $51 million per day. This figure, which represents ad budgets across web and mobile devices, will continue to rise, reaching $44 billion by 2022. For more information on how to protect yourself, check out our case study. New research from Juniper, Future Digital Advertising – AI, Ad Fraud & Ad Blocking 2017-2022, suggests that the closed-platform approach, where ad campaigns restrict the flow of ad performance data to advertisers and publishers, should be abandoned to ensure ad performance is transparent to stakeholders.
Simulated ad clicks, mouse movements, and fake social media accounts
According to the report, ad fraud rates will continue to rise, further hampering advertisers' efforts to combat fraud. Unfortunately, fraudsters are becoming increasingly innovative in their approaches to mimicking authentic advertising activity, including simulating clicks, mouse movements, and creating fake social media accounts. Depending on the budget, fraudulent activities can result in losses of up to several thousand złoty per month. These types of fraudulent practices result in wasted budgets for online campaigns, including Google Ads . Advertisers spend money on clicks that yield no further results. This is a common occurrence, especially in highly competitive industries. "Fraudsters will continue to invest heavily in domains, user accounts, and bot farms to appear genuine," argued study author Sam Barker. "Advertising stakeholders will require constant vigilance against ad fraud, which is only possible with the proper implementation of machine learning services."
Machine Learning and the Data Race
Research predicts, however, that artificial intelligence will be a key solution in the fight against fraud, thanks to its ability to analyze the vast amounts of data generated daily from advertising activities and minimize losses caused by fraud. Platforms using artificial intelligence will account for 74% of total online and mobile advertising spending by 2022. However, with the saturation of artificial intelligence, only platforms demonstrating the most effective algorithms will be able to guarantee full ad protection. According to the research, these platforms will need to focus on new data sources to improve the proficiency of AI algorithms. An example of a solution that protects ads against click fraud is Anti Click Fraud. This tool works not only for ads displayed in Google search but also for display ads, meaning those displaying banners on Google partner sites such as OLX or Onet.
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Ad Fraud FAQs
This is the deliberate, dishonest, and repeated clicking on paid online advertisements (e.g., Google Ads) without any intention of learning about the offer or making a purchase. The primary goal of this practice is to maliciously "burn through" a company's daily advertising budget.
Click fraud is most often caused by direct competitors who want to exhaust your budget and remove your ads from search results. This is often achieved by using automated scripts (bots) or hiring organized groups of people, known as click farms.
The primary consequence is real financial losses – the budget disappears rapidly, and conversion rates plummet. Worse still, once the funds are exhausted, the ad stops running, effectively losing the opportunity to reach real customers seeking its services.
Yes, Google uses advanced filters and machine learning algorithms to continuously analyze traffic. If the system detects suspicious, repetitive patterns (known as invalid clicks), it typically automatically filters them out and refunds the wrongly collected funds back to the advertiser.
In addition to relying on Google's built-in security, constant traffic monitoring (e.g., via Google Analytics) is crucial. If you notice suspicious anomalies, you can manually block specific IP addresses in the campaign dashboard. In cases of very severe attacks, it's worth considering implementing external, specialized click fraud protection tools.
Summary
The above article covers the following topics:
- what threatens your ads and how to prevent it,
- what to watch out for when running online campaigns,
- artificial online interactions (clicks, bots and fake users),
- machine learning in the fight against fraud.
