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By: Stephen Hoops has been a writing major ever since he received his BA in journalism from West Virginia University. Stephen is a content creator from WV who specializes in blogging and enjoys connecting with people through social media.

Whether we like to admit it or not, the internet we know and love wouldn't be what it is without the precious advertising dollars. From social media to search engines, the internet has something in common with traditional media before, that advertising has been the lifeblood of the internet since its inception.

Advertising dollars are critical to the state of the internet, but some have been trying to get a piece of it. Digital advertising has been plagued by "ad fraud" for decades, and many people are aware of it. It is estimated that almost 50% of every dollar spent on digital advertising is wasted as a direct result of ad fraud.

This type of fraud comes in many forms and ways, but the main way fraudsters commit ad fraud is through the use of automated bots.

Among marketers, some claim that bot traffic and click fraud are two of their main concerns when spending online advertising dollars. Digging deeper, there are some statistics worth considering:

15% of ads are likely to be seen by real people (Mediapost);
60% of the traffic on the network is bots (TheAtlantic);
The cost of ad fraud was estimated at $7.2 billion in 2016 (ANA);
54% of ads are not viewable (Adweek).

Considering the above statistics, one thing is very clear: Ad fraud is big business, and it is likely to continue for the foreseeable future. Not only does ad fraud directly impact SEO and SEM efforts, the share of marketing fraud also rises due to these malicious bots.

How bots help fraudsters steal ad dollars

If ad fraud has been synonymous with digital advertising since the beginning, why is it still so popular? More importantly, what is the actual impact of these bots on digital ad revenue?

When asked about the actual impact of ad fraud on the industry, "No one knows the exact numbers, but roughly 50% of online advertising dollars are stolen." This was in a 2015 Bloomberg interview, Words from widely respected advertising professional Bob Hoffman. Hoffman is also an authority on the advertising industry, and the data certainly supports his claims.

If marketers already know this, why does fraud continue to happen?

Digital Advertising: Like a Fish in a Bucket

In fact, very few stop fraudsters from taking inappropriate ad dollars from marketers. The current ecosystem is both a playground and a safe haven for these people.

The most common reason why digital advertising is like a "fish in a bucket" is that advertisers turn a blind eye to fraud after it occurs, not realizing it until much later. Unfortunately, however, part of the cost of capturing real leads and customers includes the cost of ad fraud, which means that spotting ad fraud can be an insurmountable task without the right help.

Another reason for the prevalence of ad fraud is that few ad networks have systems in place to prevent fraudsters from applying to be part of the network. When applying, fraudsters simply submit data about who became the site's users, user engagement and overall traffic. Once approved, the site will start showing ads using its ad network membership.

In fact, online advertising has almost nothing to lose when it comes to ad fraud. Ultimately, if a website can consistently generate traffic, everyone will be happy. However, if they fail to drive users to their website, they will show fewer ads and will lose their earning potential. Because it directly affects their bottom line, ad networks may never fight back against ad fraud.

Many forms of ad fraud

Ad fraud comes in many forms, but automated bots do most of the heavy lifting. If a bot visits a page, it's hard to tell if the visit is legitimate. Therefore, if an ad is displayed on the page during a bot visit, which would normally be considered a legitimate visit, the advertiser must pay.

But there are other ways to engage in ad fraud:

1. Pixel fill systems embed one or more ads into 1x1 pixel units on a particular page. These ads are relatively invisible to the average person, so the chances that the ad will be seen are low.

2. For programmatic ad buying, the URL of a page where the ad will eventually be served is first hidden. This results in marketers not knowing what type of sites their ads will be served on, which means relevancy and placement quality ultimately suffer.

3. Fraudsters will also turn to content farms, which are sites that scrape content from other sites. Bots are then deployed to compose fake "qualified users". In this way, these content farms will be suitable for becoming part of a digital advertising network to place ads on their sites. Ad networks block content farms from time to time, but many fly under the radar in the guise of fake-crafted traffic numbers.

How to Fight Ad Fraud

Fraudsters will always adapt, and ad fraud will always be part of the cost that marketers must consider when using digital advertising. Dealing with fraud can be confusing, frustrating, and even common misunderstandings.

It's time to fight back, and here are three sure-fire ways to do it.

1. Restoring control

Publishers have the most control, as many actively engage in questionable traffic sourcing practices where bots are a major contributor to traffic. Because their business is directly affected if they try to control bot traffic, there is little incentive for them to do something that reduces their ability to earn ad revenue.

Really dig into your website traffic data and try to see if anything looks suspicious or unusual even remotely. From there, you can add appropriate measures to clean up the data. If your site relies on a generic analytics service (like Google Analytics), the best place to start is to create a custom filter. Even if your bot spam list never stops growing, they can be applied to any traffic source by creating filters and snippets in Google Analytics.

2. Apply trusted software solutions

Fighting back is about making life extremely difficult for the crooks, even if you can't completely stop them. Finding a solid solution specifically for fraud is the best thing you can do in the long run. The best defense against ad fraud is to reduce the role of bots, and there are two ways to implement these solutions.

The first option to reduce the role of bots is software launched through JavaScript code. When the code snippet is applied site-wide, the software will begin collecting data on each visit to help differentiate between genuine and fake visits.

Lowering the role of bots can also be deployed at the CDN level, these solutions evaluate every HTTP request as it occurs. If you want a more proactive software to prevent ad fraud, this is definitely worth considering. While they are great at protecting your website from automated bots, they require a lot of resources to implement.

No matter what you think is the best solution for you, detection and mitigation are the tools that will ultimately help you stop fraudsters.

3. Vigilant monitoring

Take a look at where you are today and dig into your data to gain insight into the type of traffic your website is getting from online advertising channels. Then, evaluate the relationship between what you earn and what you spend on digital advertising.

If you think there will soon be a perfect solution to combat ad fraud, I suggest you not hesitate. Acknowledging and understanding the threat is the first step in taking back control and preventing your ad revenue from being stolen.

From there, you have to take action and minimize the level of fraud.

This article was translated by NetEase Yunyidun, translator: Lu Xiaofeng.

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This article is published by NetEase Cloud .

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