Fraud Doesn't Just Hurt the Bottom Line - It Also Affects Marketing

One of the biggest areas of fraud in the Internet age is ad fraud. Clickbots and other methods used to fraudulently boost advertising metrics -- usually with the aim of allowing advertising hosts to charge more for their services -- can have a serious impact on the victim company. 

However, that impact goes beyond just hurting their bottom line. By inflating and fictionalizing ad performance numbers, companies lose the immense value of being able to accurately track their ad campaigns. They lose precious time, resources and ad dollars continuing campaigns that they believe are successful -- when in fact, they might only be eliciting clicks from automated bots that will never purchase a thing.

A Martech Advisor article, "A Marketer’s Worst Nightmare: Ad Fraud or Performance?" explores this serious problem. The article brings up some disturbing statistics. Among them:

  • According to a study by the Interactive Advertising Bureau, ad fraud is costing the U.S. marketing and media industry an estimated $8.2 billion each year.
  • Bot-fueled ad fraud, which is designed to mimic the activities of human browsers, is perhaps the most common. Bot usage was at its highest ever in 2014, with findings from Imperva suggesting that humans drove less than 39 percent of overall web traffic.

As mentioned, the dual threat of ad fraud impacts not only spending budgets, but the potential for engaging in more effective ad campaigns. The article states:

Bot traffic continues to drive a majority of web activity today, posing a threat both to marketers and to the Internet ecosystem as a whole. For marketers, the proliferation of online fraud greatly impacts advertising ROI, since falsified clicks cost money without yielding any sales, conversions or revenue.

 

Here are some things a marketing manager can do to lesson their risk of falling victim to online ad fraud:

  • Advertise with reputable websites. For example, business marketing might be best suited to Forbes or Fortune rather than a little-known business blog that seems set up more for advertising than delivering content.
  • Ask to review their deliverables, and examine their policy for eliminating (or at least reducing) the impact of ad fraud. There are digital countermeasures that providers can use to help limit the scope and effect of "zombie" computers that provide fake advertising clicks. 
  • Carefully follow your ad results. By examining the reports provided by your advertising host, a smart marketing manager should be able to discern if too many hits don't appear legitimate, i.e. they are coming from questionable sources. Also, if a campaign seems to be driving an enormous amount of clicks but is not translating to a reasonable increase in revenue, something might be amiss. 

Ad fraud isn't going away anytime soon. So it is up to marketing managers to better protect their company and their ad dollars by being vigilant and aware of the problem.