Detecting fraud is an essential part of customer acquisition and retention. That’s why, it makes sense to invest effectively in fraud detection, prevention, and even reversal. How can you protect your online business? The answer is pretty simple: By knowing the warning signs, recognizing fraud and responding to it.
So, you’re interested in using fraud detection technology. You’ve heard about the benefits of technology and how it can improve your business. You’re ready to make a decision about whether to use the technology. However, what does it all mean? Is it really worth the time and money? There are a number of factors you need to consider, including whether the technology is right for your business, how well it works, and whether it fits your business goals. First, let’s take a look at what fraud detection actually is and what you can do about it.
This guide is designed to help companies develop an effective online fraud detection strategy and identify ways to improve fraud prevention.
What’s display fraud?
Display fraud is a fake advertising activity, such as fake traffic, fake leads, and ineffective ad placements. This means that any revenue generated by display fraud isn’t organic numbers. That’s true. More impressions mean more money. Consequently, fraudsters find ways to create fake impressions (or impression fraud) to increase the price for advertisers. However, ad fraud creates uncertainty, harms the entire industry, and causes a loss of trust. The digital advertising ecosystem is built on trust. To achieve the best results, all participants must have good intentions, and no one should try to deceive another. The harmful potential of ad fraud is that it can undermine this trusted environment. Advertisers need to be confident that their ads will appear in the right places. Publishers, for their part, don’t want to lose revenue by selling false ads.
Moreover, who is responsible for this fraud? Some publishers can be vigilant. For example, after placing a display ad on their website, they automatically click on their ads via a bot. They’re fraudulently trying to increase their ad revenue. On the other hand, your competitors may also send irrelevant clicks to your ads to harm you. Besides, those who want to collect ad data for various reasons may also resort to fakes.
Of course, the ad networks struggle to take some measures against this click fraud. However, they’ll later reimburse you for clicks they deem fraudulent after a certain analysis. However, it’s up to your company to find ways to prevent these clicks.
If you don’t take the necessary precautions against ad fraud, your brand can suffer greatly both in terms of material and moral damage. The first way to avoid fraud is to be well aware of ad fraud. There are two different types of ad fraud, called non-human traffic and human traffic.
Ad fraud for non-human traffic
- Simple bots
- Sophisticated bots
- Botnets
Ad fraud through human traffic
- Click farms
- Invisible ads
- Cookie stuffing
- Domain spoofing
- Ad injection
What’re the effects of display fraud?
Display fraud can have a variety of negative consequences, from financial damage to brand reputation. Your advertising budget, which you use to increase conversions, is spent on malicious click activity. You then have to spend extra time analyzing the data and questioning its reliability.
How to detect display fraud
You can often spot this type of ad fraud by watching for a combination of high impression counts, low click-through rates, and below-average install and retention rates for specific media sources, campaigns, site IDs, or even regions.
However, this is no easy feat if you’re doing it yourself. We recommend you use a fraud solution or software for this purpose. These types of solutions will help you block fraudulent impressions from IP addresses that are known to send fraud. Some solutions even allow you to set up automatic alerts to look for site IDs or networks with particularly low conversion rates between impression and click.
- Check your conversion rates: If your conversion rate is very high, but your overall conversion rate is lower, look for historical trends in conversion rates.
- Check your bounce rates: Bots don’t navigate the website like a human. They just visit the page. So if you have a high bounce rate, you might have encountered click fraud.
- Check your CTR (click-through rate): If your click-through rates are high, but your conversions are not as expected, you can check if you’ve been exposed to fraud. Analyze your CTTs after the fact.
- Check the expected CTR in the Quality Score for each keyword: If the CTR for a certain keyword is higher than expected, but your other keywords are lower than expected, this could indicate a click fraud.
- Review your display placements: Check your ad placements weekly or even daily. Exclude sites you think are illegitimate or those with high CRTs (over 3 percent of impressions).
What technique can you use to detect display fraud?
Know your enemy
Fraudsters are using advanced machine learning and artificial intelligence to combat fraud solutions. While advertisers find new solutions, fraudsters also find new ways. Businesses can encounter new fraud at any time. So to prevent them, you first need to know your enemy well.
Monitor metrics
Time to install (TTI), clicks to install (CTIT), IP address, and user agent are important metrics you can monitor to detect mobile ad fraud.
Ask these questions
You’ll encounter many types of fraud in your digital marketing efforts. There are some details you should pay attention to in order to spot them. When you review your reports, ask these questions:
- Are you observing an unusually high or low CTIT (Click to Install Times)?
- Are too many old devices and operating systems showing up? Or too many downloads from users running an older operating system?
- Too many clicks or downloads from another country?
- Is session duration down despite increased ad clicks and registrations?
Use of software against ad fraud
Fraud detection and prevention tools help companies manage and prevent online fraud. With these tools, you can analyze and detect potentially suspicious and fraudulent activity.
Key takeaways
🔵 Advertising fraud is a serious problem for marketers and a risk factor for an entire industry.
🔵 Identify display fraud correctly and take action to detect and prevent ad fraud.