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A digital marketer knows that online advertising is crucial to a company’s strategy to attract new customers. Finding the right audience, whether it’s through Google ads, a Facebook campaign or an industry-relevant blog, can make a difference. Online advertising is growing by leaps and bounds: 378 billion. USD was spent alone in 2020, and consumption is expected to reach 646 billion. USD in 2024.
In recent years, much of digital advertising relied on information derived from third-party cookies that capture browser data at the user level. But now the internet is moving towards a future without cookies. And it affects how companies can advertise.
Marketers need to be aware of where their expenses are going. The campaign’s success goals are constantly shifting so that advertising costs can be misused – so much so that up to 74% of total media consumption is wasted. Dollars lost specifically due to ad fraud are set to exceed $ 50 billion. USD globally in 2025, according to the World Federation of Advertisers.
Ad fraud is not always obvious
The most immediate consequence of fraud is wasted advertising budgets with no results. But there can also be invisible implications: If reporting data is filled with elevated numbers due to false clicks or impressions, it can skew performance metrics and give marketers a false sense of what’s working in their advertising.
Fraud can also adversely affect future campaign planning. If marketers make future advertising spending decisions based on skewed campaign metrics, they may end up investing in campaigns that are not set up for success, which could potentially lead to more wasted advertising spending later on.
But the problem goes beyond recovering losses caused by bad actors. Where fraud can really hurt a business is wasted labor hours. If a cybercriminal injects clicks or engages in pixel stuffing, there’s a good chance someone on the sales team has spent time chasing poor quality leads instead of closing active deals.
The more companies spend on digital advertising, the more they can lose. The problem with the bad actors themselves is that some popular advertising players have been accused of deliberately misrepresenting the potential reach that ads on their platforms provide, either due to duplicate accounts, bots, or issues with various measurement tools.
Smarter criminal and more sophisticated schemes mean companies need to know how bad actors are exploiting media platforms and third-party vendors to find every possible loophole.
Five tactics used in digital advertising fraud
Marketers and business leaders need to stay vigilant in the fight against ad fraud, including the following five common fraudulent tactics.
1. Cookie filling
Cookie-stuffing is effective in “plugging” a browser with multiple affiliate tracking cookies, so that if a visitor goes to a website with an affiliate code, the metadata is transferred. Therefore, an affiliate marketing program gives credit to the bad actor, which creates error attribution that can erode advertising costs and harm affiliates because the entity that commits fraud steals leads and sales.
Cybercriminals can hijack a site and turn it into their own pirated pop-up – or infect an existing pop-up with malware that floods affiliate partners with ghost clicks when the site opens.
2. Domain spoofing
Domain poofing is the creation of a site that is similar to another known – and more valuable – site. Creating a fake version of a website is tricking cybercriminal advertisers into paying a premium based on the name, even though the ad traffic does not match the credibility of the domain.
Two red flags to look for if a third-party provider is offering an ad rate that is too good to be true:
- The price per. mile (CPM) is too low for a top-level site
- The domain owner does not sell ad space at a real-time auction (RTB).
A spoofed top-tier domain can place display stocks in multiple ad exchanges, as well as video ads on other exchanges – even if the spoofed vendor does not sell programmatic video ads. It lets scammers make big bucks by claiming they are an institution they are not, whereas companies are not all the wiser.
Click on injection
Cybercriminals put malware on the user’s devices, which generates clicks on ads across channels like Google or Facebook, which increases consumption. An infected device is known as a “botnet”; a developer makes a junk app that facilitates downloads in the background. The app continuously clicks on third-party affiliate ads, which make the app money but cost companies.
Click injections come in many forms, such as automatic change of wallpaper or flashlights. The app seems harmless and is usually available in an app store for free. Android users are particularly prone to this kind of scam due to their “installation broadcasts”, which are signals sent by apps that update automatically.
The malicious app will keep installing and reinstalling if the model is Cost Per Installation, which means the advertiser spends a lot of money on banner ads that should be in the app so users can look holistic. Instead, the app runs over and over again and costs them a lot of money while no actual users click.
4. Pixel fill
Pixel-stuffing takes a 1×1 area of a site and buries several ads in the background. It leverages impression-based marketing programs in that users unknowingly interact with the site, giving the cybercriminal credit for impressions.
Pixel stuffing happens on mobile pages where the ad is so small that most users do not even see it, but it still counts as a viewed impression. Due to this “in plain sight” strategy, the scam can be repeated more than once on the web page.
Depending on the site and the continental location, campaigns have different budgets. What people may be willing to spend in Southern California, they may not be ready to spend in Sacramento. Geo-masking hides the generated lead placement by spoofing an IP address that drives up the price, making a lead look more valuable so the criminal can charge more for advertisers.
A cybercriminal can break down even more affluent areas of a city and base ad prices on the demographic group with location switching. Even if the company thinks it is getting an end user with high dollars, it may be getting someone with less disposable income who is not the right target for the price of the product.
Businesses can fight the horror by using media intelligence
How can companies keep up with digital advertising fraud and the many other challenges in the media advertising landscape?
Media Intelligence, PwC’s programmatic media analytics platform, consolidates media transactions and analyzes them within a single platform, allowing you to respond more quickly to campaign dynamics and identify areas of waste and fraud. You can see an overview of where clicks come from and how campaigns perform at a detailed level.
Media Intelligence provides powerful visibility into the various parts of digital and programmatic media investments.
If you would like to know more about how Media Intelligence can help your business combat ad fraud, click here to schedule a demo.