Ad Fraud has existed since the beginning of digital advertising, but with the rise of programmatic and automated ad buying, it has gained significant traction over the past few years.
According to a recent report from the ANA, it has been estimated that in 2019, fraudsters stole $5.8B of ad dollars from marketers. However, with some types of ad fraud difficult to detect and fraudsters methods evolving as soon as old methods have been detected, the actual figure is likely even higher.
So What is Ad Fraud?
Ad Fraud is the process of misrepresenting digital ad impressions to generate revenue. Historically, marketers have pointed the finger at Ad Networks as the main culprit. However, with the rise of programmatic and automated ad buying, there is no denying that the issue has rapidly plagued the broader industry, beyond just Ad Networks.
Common Types of Ad Fraud
Ad Fraud comes in many different flavors and sizes but below are some of the industry’s most common types:
- Bots - a computer running a script that masquerades as a person. While generally easy to catch, these scripts are quickly evolving to closely resemble real human behavior.
- Domain Spoofing - A practice where a fraudster pretends to represent another site.
- Pixel Stuffing – The placement of an ad in an invisible pixel that’s not actually displayed on a page.
- Ad Stacking – Ad placements that are layered on top of each other so that only one is visible to the user but multiple impressions are counted.
- Ad Injections – When a publisher is not permitted by an advertiser or browser to insert an ad onto a page but does anyhow and fraudulently earns ad revenue from it.
Combating Ad Fraud
The industry is taking heed of the issue and responded with its first steps to fight ad fraud in 2017 with the adoption of Ads.txt, a text file that publishers host designed to prevent domain spoofing. Ads.txt is a listing of companies and services whom the publisher deems as authorized to sell. The buyer’s DSP references this file during the ad auction to determine if the exchange is authorized to sell the publisher's inventory, any unauthorized exchanges are restricted.
Following the adoption of Ads.txt, the industry established supply chain and sellers.json in 2019 to combat the latest methods of Ad Fraud.
Supply Chain or SChain is an object in the bid request that lists the seller IDs of each party who has touched the individual requests, while Sellers.json is the dictionary that allows buyers to look up the sellers listed in the SChain. These two initiatives allow buyers to have visibility into the steps the bid request has taken between themselves and the publisher, enabling DSPs to make a better buying decision.
While Ad Fraud continues to persist today, the good news is these initiatives have seen a positive impact. With the estimated number of dollars lost to ad fraud down in 2019 when compared to 2017 ($6.5B), there is reason to stay optimistic that this trend will proceed as the industry continues to invest more time, effort and resources towards the war against Ad Fraud.
