Interviews, insight & analysis on digital media & marketing

Click fraud bots cost business community close to £25 billion in 2020

Fraud schemes and criminal gangs adapted and ramped up their efforts to defraud businesses of nearly £25billion through click fraud in 2020, according to newly-published research from PPC Protect.

The annual Global PPC Click Fraud Report examined over 1 billion ad clicks to uncover the global  impact of fraudulent activity on businesses of every size – accounting for between £14,000 and £700,000 per year lost to each business.

The report found online display ads most susceptible to click fraud, with over a third of clicks either fraudulent or invalid. The report also found 11% of search clicks and 17% of clicks associated with connected TV campaigns were fraudulent.

Neil Andrew, founder and CEO of PPC Protect said, “Despite the impact of Covid-19, digital ad spend still increased 2.4% in 2020 to a record $332bn as consumers turn to the web. For fraudsters this is like shooting fish in a barrel. With little effort they can defraud small, independent businesses relying on online ad spend to increase their presences out of tens of thousands pounds a year. We are handling huge volumes of ad traffic to make sure these businesses are protected and with this new investment we can explore how our solution stays one step ahead of more sophisticated ad fraud tactics and expand internationally.”

With its low-risk nature, criminal gangs are attracted to click fraud and PPC Protect found that 38% of fraudulent activity are through automated bots and bot fraud. Criminal gangs are investing heavily in sophisticated bots to do their dirty work without having to lift a finger. Not only does this allow them to scale their activity but it allows them to do it on autopilot.

With parents and teachers forced to adapt to home learning in 2020, the educational industry upped their spend on online advertising, which fuelled a rise in fraudulent activity and pay-outs for click-fraudsters. PPC Protect found that education saw the highest rates of click fraud with 31% of clicks being invalid. Click fraud also grew by 53% for healthcare advertisers. 2020 also saw losses in the travel market reduced 21% due to the market shrinking significantly, demonstrating that criminals are following market trends in order to make their activities pay.

PPC Protect handled more than one billion ad interactions in the last 12 months. As it continues to lead the fight against click fraud, it has recently closed its oversubscribed £2m seed round, led by Fuel Ventures to expand into new geographies and territories.

Mark Pearson, founder and managing partner of Fuel Ventures, said: “Neil and the PPC Protect team are at the frontline of the click fraud prevention space and built the first truly automated cybersecurity-driven fraud detection engine that stops bad traffic and fake clicks. They are a security-first not adtech-first firm and their priority on keeping businesses safe is paramount. We are excited to be backing this innovative company with excellent leadership.”

The full report from PPC Protect can be downloaded  here.