By Andrius Palionis, VP of Enterprise Solutions at Oxylabs.io
Are you spending a considerable portion of your marketing budget on online advertisements without achieving a significant return on your investment? While there may be issues with the creative or copy, there is also a possibility that your advertisements are being shown on the wrong website, to the wrong demographic, in the wrong country. While mistakes can be made, these types of incidents can also be the result of fraudulent advertising practices.
Advertising fraud deceives digital advertising networks with techniques that include misrepresenting traffic, inflating clicks, and replacing ads. Estimated to reach $100 billion by 2023, ad fraud is a growing problem that costs marketers money, cripples advertising efforts, and destabilizes the entire online advertising industry.
How Ad Fraud Occurs
Fraudsters make money by taking advantage of the bidding system used to pay for clicks that is based on audiences with different demographic characteristics in varying locations. For example, if a shoe company wants to sell winter boots, they should probably target audiences in Northern countries with cold climates. Advertisers know this and will charge the company a much higher cost-per-click rate to run advertising in a country such as Norway when compared to a warm-weather country like Egypt.
Fraudsters leverage those cost-differentials by using techniques to show ads to lower-cost audiences while pocketing the difference. Using the example above, the shoe company paying a premium to show their ads in Norway will actually have their ads displayed in Egypt in a fraudulent scenario. And it doesn’t stop there. Along with substituting audiences from different locations, other fraudulent practices can misrepresent impressions, clicks, conversion, and other data events to manipulate numbers and produce false results.
Types of Ad Fraud Techniques
Besides location-based parameters, the bidding system adopted by most advertising services uses other pricing factors that leverage audience demographics, website content, and placement type. Fraudsters use those parameters to exploit price differentials employing various ad fraud techniques that include:
Domain spoofing tricks advertisers into believing they’ve paid for high-quality traffic while substituting lower quality traffic through methods that include:
- URL Substitution: the replacing of a URL from the actual placement with a fake one making advertisers think they’re placing an ad on a high-value site when it’s a low-value site
- Cross-Domain Embedding: the use of an iframe to overlay a high-quality site over a low-quality site, making advertisers think their ad is on the high-quality site
- Bots & Custom Browsers: the use of bots with customized browsers to visit sites that change the URL of the sites they visit with a premium-site URL, creating an illusion that the advertisement was placed on a high-value site
Click spamming injects code into systems that result in a flood of low-quality clicks. This is accomplished with software or human-powered click farms where low-paid workers click on ads or install/uninstall applications to generate revenue.
Pixel Stuffing & Ad Stacking
Pixel stuffing uses website code to cram a maximum number of advertisements into a tiny 1×1 pixel area invisible to most users. Ad stacking uses the same idea, but stacks ads on top of each other. Both techniques allow fraudsters to display multiple ads in a minimum amount of space to generate maximum impressions.
Ad injection uses code to “inject” ads into spaces that belong to different advertisements. The technique produces non-existent clicks through browser extensions and adware plugins.
Geo masking is a technique where fraudsters substitute lower-quality traffic for higher-quality traffic by artificially manipulating the actual click locations. Since there is a wide cost differential among audiences from different locations, this technique enables fraudsters to make significant money from the price differences.
Click injection inflates the number of clicks through the use of malicious apps that run in the background and click “invisible” ads without the user’s knowledge.
Proxy-Based Ad Verification is the Definitive Solution
Ad verification practices that leverage proxies can verify if your advertisement is being displayed on the right site, to the right people, and at the right price.
How ad verification with proxies works
Ad verification with proxies adds verification tags inside your advertisement’s code to collect data about the site content, ensuring that the page is suitable for the ad. Collected data is then reported back to the ad verification vendors, where analysts work to determine the advertisement’s performance.
Fraudsters know they are being watched and can detect and prevent ad verification companies from accessing their sites by blocking their IP addresses. Residential proxies provide much-needed anonymity with unique, organic, and diversely geo-located IP addresses, making it impossible for fraudsters to block your ad verification efforts.
Datacenter vs. Residential Proxies
Datacenter proxies may be cost-effective and fast, but they are not affiliated with Internet Service Providers (ISPs) and do not provide unique IP addresses that provide anonymity. In contrast, residential proxies have unique IP addresses that make them indistinguishable from actual users, giving ad verification professionals an effective way to remain anonymous when accessing sites for ad verification.
Ready to learn more?
The use of residential proxies can eliminate the problem of ad fraud by giving ad verification professionals the anonymity they need to verify that ads are being shown on the correct sites to the correct audience. The use of proxies in cybersecurity is not limited to ad verification, however. To learn more about how proxies are leveraged by the world’s leading cybersecurity companies, read Proxies for Cybersecurity Solutions on the Oxylabs blog.