Free Advice for Brands to Reduce Ad Fraud

Following on comments by Douglas de Jager (Google.com, Founder of spider.io) at AdExchanger's CleanAds I/O Conference to "raise the sea level" for all advertisers, I am collecting together here the most straightforward and immediate actions that brands can take with the help of their agencies to clean up the most obvious forms of digital ad fraud.

The following actions that I am recommending have been proven and deployed successfully over the last several years for several dozen clients -- literally by cutting off the wasted media dollars due to fraud so that those dollars can be spent on ads shown to humans, that have a chance to convert into business impact.

Advertisers don't spend less; they just spend better. 

Let's start with the basic ingredients of ad fraud. Bad guys need fake sites which can carry the display ads, video ads, or search ads. They they need fake users (aka "bots") to cause the pages to load in order to cause the ad impressions. Brands can take the following steps to cut off the most obvious fraud. 

1. To Reduce Display Ad (CPM) Fraud (and video, mobile)

Seven separate, independent studies have shown that a large portion of bot activity detected (e.g. 40%) come from datacenters like Amazon Web Services (aka "cloud services"). 1) Distil Networks, 2) Incapsula, 3) FraudLogix, 4) WhiteOps, 5) Marketing Science (my company), 6) Are You A Human, 7) Google. 

This is because it is extremely easy for bad guys to "spin up" and "take down" bots by the millions in data centers. And it is extremely cost efficient for them too because the entire premise of cloud computing is that they only pay for what they use. They don't even need to buy expensive server hardware any more. These bots are also very advanced, because they can create fake mouse movements, page scrolling, and clicks on the ads -- and thus even mess up the typical analytics that advertisers use, like clicks and click through rates. 

RECOMMENDATION:  Have your media agency and all the ad networks they use block IP addresses coming from known data centers such as Amazon Web Services, Microsoft Cloud, Google Cloud, Level 3 Communications and others. This is because normal human users do NOT access the internet via data centers. They use cable modems or DSL from home (residential IP addresses). 

2. To Reduce Search Ad (CPC) Fraud

In EVERY single client's paid search programs that utilize search partners network, I have observed fraud. The amounts of fraud have been all over the place. Note that the search fraud primarily comes from the search partner network, NOT on the main properties like Google.com or Bing.com. This is because click fraud on those main sites do not result in bad guys making a revenue share. So they don't bother. 

For this type of fraud to occur, bad guys have to set up fake sites that carry paid search ads from networks such as Bing. They get their sites included in the search partner network so that when a paid search ad is served and then clicked, they earn a portion of the pay-per-click revenue. And they use advanced bots to carry this out -- that is, the bots have to type in the keyword to cause the search ad to load, and then click on it, to generate the CPC revenue fraudulently. 

RECOMMENDATION: The most straightforward way to identify this kind of fraud is to generate the Website Publisher (URL) report from Bing Ads (see screen shot) and look at the click through rates of each unique publisher URL (see slide 16 below). If you see click rates above 5% (for example 100%) those are definitely sites that need to be further investigated and then added to the blacklist so search ads are no longer served to these fraudulent websites. And remember to update those lists frequently. 

3. Reduce Ad Spend between 1a - 5a (definitely 2a - 4a)

As I have written previously, there is overwhelming evidence that humans sleep at night (who knew?) and that bots come out to play at night, specifically between 2a - 4a, and with a higher incidence between 1a - 5a. So there is no reason to spend the same amount of ad dollars during those hours; your ad dollars are better spent during the day when more humans are actually online. Bad guys' bots have also tuned their volume to match the 5+2 weekday vs weekend pattern (see chart below); so reducing ad spend on weekend days also makes sense.   

RECOMMENDATION: Tune your paid ad serving schedule to exclude, or at least serve less to the hours of 2a - 4a.  And consider reducing ad spend on weekend days, unless you have specific reasons to think your human audience looks for your more heavily on the weekends. See screen shot below for adding scheduling in AdWords. 

Feel free to share and pass along to colleagues who might be able to use this right away to reduce the most obvious forms of fraud impacting their campaigns. 

About the Author:  “I advise advertisers and their agencies on the technical aspects of fighting digital ad fraud. Using forensic technologies and techniques I help to assess the threat and the current countermeasures in order to recommend additional steps that can be taken to combat fraud and improve ROI.”

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