Impression Fraud – the Burning Issue in Digital Marketing

Posted by | June 23, 2015 | Impression Fraud | No Comments
Impression Fraud in Digital Marketing

Digital marketing has grown to become a major player in the world of marketing and is poised to completely replace traditional methods.  Reasons for its success include speed of communication, versatility and high conversion rates.  Combined with the constantly increasing consumption of online media, digital marketing offers potential to both marketers and consumers.  Often viewed as ‘the future of marketing’ , it is nonetheless not without its problems.  Many papers on digital marketing cover areas of concern such as limited budget, effective targeting and privacy considerations.  However, one burning issue less frequently addressed is that of impression fraud.

Defining Impression Fraud

Also known as ad fraud, impression fraud takes a number of different forms.  It is generally defined as the practice of serving ads that will never be viewed by consumers, and as the registering of ad views and clicks by non-human traffic.

Hidden Impressions

One of the most common methods of digital ad fraud is via “hidden impressions”.  This is where numerous ads are “stacked” on top of one another in the same space, or where a 1×1 pixel iFrame is “stuffed” with ads that are invisible to users.  The practice affects all types of display ads, including video.  Ad stacking and ad stuffing lead to huge amounts of worthless inventory on ad exchanges, with estimates in 2014 indicating that ‘a quarter or more of exchange media could be fraudulent’.  Sceptics believe the figure is much higher.

Fake Sites

Unfortunately, hidden impressions aren’t the only type of ad fraud that marketers need to be aware of.  “Fake sites” are another lucrative source of income for fraudsters.  Websites are created that have minimal or generic content – sometimes no content at all – and contain many ad spaces.  They often mimic popular, in-demand domains.  These sites avoid suspicion by not drawing excessive amounts of traffic, which is also fake.  They generate vast amounts of revenue for those operating the scams.  With regards to fake sites and traffic, an impression fraud detection agency reported that in 2013, ‘fraudsters had stolen some $6 billion in the US alone’.  This type of ad fraud remains rife, and is predicted to cost the US ‘$6.3 billion in losses in 2015’.

Fake Traffic

Hand in hand with fake sites is “fake traffic”.  Fake, non-human traffic is generated through botnet systems or malicious software to view and click on ads.  The botnet approach implements machines, or bots, to view pages and click on impressions, while the malicious software tactic uses viruses to hijack computers.  Once hijacked, users’ browser cookies are employed to mimic human viewing and clicking behaviour.  It is thought that ‘36% of online traffic is suspicious or non-human’.

Other Forms of Impression Fraud

Hidden impressions, fake sites and fake traffic are arguably the most widespread forms of ad fraud, however, there are other scams that marketers should watch out for.  These include “laundered impressions”, where ads are rerouted through fake sites.  Another is “cookie stuffing”, whereby illegitimate cookies are placed to take cuts of affiliate marketing referral commission.

Browser toolbars are not as common as they once were, but their usage is still widespread.  Although there are valuable toolbars around, there are fraudulent ones in operation that match their impressions with those served by publishers.  As such, ‘the inventory usually costs advertisers a fraction of what it would cost from the publisher directly — and buyers are told by exchanges that their ads were served on that publisher’s domain’.

Victims of Impression Fraud

It’s not just marketers of SMEs that should be concerned about impression fraud.  Large businesses also fall victim to digital advertising scams.  US telecommunications provider, Verizon Wireless, are one of the country’s largest advertisers, with a spend of $1.2 billion in 2013.  The company sought compensation following an investigation into its ad purchases that ‘found more than $1 million in fraud’.  French cosmetics giant, L’Oréal, claimed that some of its impressions were viewed by fake traffic, and also demanded compensation in 2014.

Combating Impression Fraud

With such a level of prevalence in the digital advertising world, marketers cannot ignore the likelihood of encountering ad fraud.  Impression fraud reduces ad quality, and this in turn creates a demand for more traffic, perpetuating a vicious cycle that only benefits the fraudsters.

However, by teaming up with a specialist digital marketing aggregator, almost all risk can be eliminated.  An aggregator, like PRGRMTK, has the advantage of being an independent party, so there is no bias when managing campaigns.  By utilising all the major providers, the aggregator also has a breadth of access that enables insight into the strengths and weaknesses of the platforms.

With the aggregation approach, budget is balanced across multiple providers simultaneously.  The aggregator has no buying commitments and is thus able to transfer budget from one provider to another in order to avoid fraudulent activity.  By working with a specialist like PRGRMTK, marketers can relax in the knowledge that a solution proven to deliver incremental returns is also combating impression fraud.

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