Click Fraud: Are Bots Eating Your Ad Budget?

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​Your computer has been hacked!

But what does that mean, exactly?

Hackers might be trying to learn your email or bank account passwords, steal your identity, or…
…click online ads?!

That’s right — some malware is made just for the purpose of surreptitiously clicking online ads.

So, why would hackers go to the trouble of creating malware just to click on online ads? What do they get out of it? Simple: money.

This practice is known as “click fraud.” And it is a huge industry. Some estimate that click fraud takes up about a third of all digital ad spending. Pages displaying ads make more money the more clicks those ads get, whether or not they’re made by a real person.

Competitor click fraud can also occur. This is where the perpetrator purposely drives up their competitor’s advertising costs by clicking on their ads over and over.
Click fraud is estimated to cost advertisers tens of billions of dollars a year.

The web seems like a perfect marketing opportunity: companies like Google and Facebook gather detailed demographic and behavioral data about their users, and then use it to sell highly targeted ads to businesses. Want to advertise your business only to 30 year old stay-at-home moms who are interested in yoga? The web makes that cheap and easy. Compared to expensive advertising on TV, magazines, or billboards, it’s a no-brainer.

Unfortunately, click fraud can make even digital advertising costly, and greatly reduce its effectiveness.

Many of those highly targeted clicks you are paying for are actually from bots or low-paid workers.

Thinking about buying ads for your business? Advertising online can be an incredibly effective method to grow your business, but only if you’re aware of click fraud and take steps to minimize it.
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Find out how it all works in the graphic below.

Panic Over Click Fraud
​The real costs of click fraud are likely immense:

• It could have cost marketers $11.6 billion in 2014 alone
• Cost of it is up 22% from 2013
• Various marketing reports show growth in click fraud between 23% and 50% in the last two years
• In 2013 Google disabled:
  • 2 million bad ads on Adwords
  • 5,000 AdSense accounts for copyright violations
  • 400,000 sites on its Google network for disguising malware
  • 10,000 sites on its Google network for pushing get-rich-quick schemes
• Major brands have complained about click fraud:
  • L’Oreal
  • General Motors
  • Verizon
    • Claims $1 million worth of fraud
  • Mercedes-Benz
    • Security firm Telemetry claims 57% of ads were viewed by bots
    • Ad tech company Rocket Fuel, who ran the ads, claims their numbers say only 6% of the digital ad campaign was questionable and possibly fraudulent
  • Limited Run
    • Accused Facebook of allowing up to 80% of its ad traffic to come from bots
• Experts agree that click fraud is a problem, but disagree on how widespread it is:
  • ComScore Senior Vice-President Brian Pugh says that bots may account for anywhere from 4% to 36% of online traffic
  • White Ops, a web security company, says fraud costs marketers at least $6 billion (roughly 4% of ad buys) every year:
    • They suggest one sixth of all U.S. computers are infected with bots that fraudulently visit sites
  • Medialink, a networking products company, says about 25% of online ad budgets go toward fraudulent traffic
  • Advertisers usually say the problem is huge
    • The Association of National Advertisers suggests it is around 50% of digital ad budgets

Reduce Your Risk of Click Fraud

• Know how fraud happens, and stay up to date on techniques and risks:
  • Watch out for easy-to-fake measurements, like:
    • Ad views
    • Click-through rate
    • Completion rate
    • Cookie attribution
  • Focus on return on investment (ROI), because it shows the real effectiveness of campaigns
    • Know your goals
      • Increased inquiries
      • New customers
    • Carefully measure results using human interaction metrics like:
      • Purchases
      • Subscriptions
      • Inquiries
    • Utilize third party tools to analyze ROI and possible click fraud
      • Improvely
        • Click/conversion tracking and click fraud detection
      • Voluum
        • Marketing analytics in real time
      • There are also services like those from Marin Software that monitor and optimize PPC traffic
• Design your ad campaign correctly
  • Target your market as closely as possible
    • Specific geographic areas
    • Longer keyword phrases
  • Be prepared to pay more for genuine media
    • Targeted, quality ads cost more than low-quality, randomly-placed ads
  • Work with reliable advertising agencies and brokers
    • With good reputations
    • Committed to aggressive fraud detection techniques
• Be proactive with your ad campaigns
  • Create unique landing pages for PPC traffic to better track data
    • Landing pages with unique URLs allow you to isolate PPC from regular traffic
  • Study ad stats for unusual patterns
    • Sudden increases in bounce rate
    • Duplicate IP addresses
    • Sudden spikes in PPC traffic with no corresponding ROI

Although fraudulent traffic will be a problem as online advertising grows, you can mitigate the risks of click fraud. Keep hackers from destroying your digital ad campaigns, and reach real customers for your business.

sources

​Sources

• Advertisers Join Forces To Fight Online Ad Fraud
• Click Fraud Costs Marketers $11B, IAB Issues Key Report
• The frighteningly overblown reports of online ad fraud
• Online Ad Fraudsters Are Stealing $6 Billion From Brands
• Bot Problem Keeps Getting Worse
• A ‘Crisis’ in Online Ads: One-Third of Traffic Is Bogus
• 36% Of All Web Traffic Is Fake
• How Much of Your Digital Ad Traffic is Fraudulent?
• Facebook ‘Investigating’ Claims That 80% of Ad Clicks Come From Bots
• Rocket Fuel Hits Back At ‘Sensational Headlines’ In Bot Traffic Row
• Coming clean: The truth about fraud in digital advertising
• Return on Investment (ROI)
• How To Avoid Becoming A Victim Of Click Fraud
• How to Identify Click Fraud on Your Pay-Per-Click Ads
• Voluum
• Improvely
• The PPC Guide for Beginners, Part 1: Intro to PPC ROI

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