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Contributed by Eugene Kim

In the world of online advertising, fraud has quickly become an industry norm. Read along to see how online advertising fraud is being committed and how it affects your business.

What Constitutes Online Ad Fraud?

According to Google, there are two types of online advertising fraud: click fraud and invalid traffic. Click fraud is the intentional manufacture, creation or misrepresentation of clicks that are used for monetary gain and/or to disrupt a competing business’ marketing efforts. Invalid traffic covers both clicks and impressions that are suspected to not be the result of genuine user interest.

Click fraud and invalid traffic are carried out using methods similar to the following:

  • Manual clicking
  • Click farms (hiring individuals to manually click ads)
  • Pay-to-click sites (pyramid schemes created by publishers)
  • Click bots (software to automate clicking)
  • Botnets (hijacked computers utilized as click bots)
  • Shell websites
  • Web robots (software that automates browsers to visit shell websites as humanly as possible)
  • Websites within websites (shell websites with small website embedded within it)

How Online Fraud Affects Business

Click fraud and invalid traffic bolsters clicks and impressions which entices publishers, ad exchanges and advertisers to overlook the issue, but for businesses that are paying for the advertisements, online fraud drains budgets through the misrepresentation of success.

Online fraud will make it seem like a campaign has 500,000 impressions and 50,000 clicks but only 60 percent of those clicks and impressions were users that were actually interested in the ad. Companies are paying top dollar to get in front of their target audience, yet 40 percent of what they paid for are bots.

Online fraud is a growing issue that may advertisers are turning a blind eye to. Join us for part two of this articles about online fraud to find out what we at PPBH do to track and thwart online fraud.

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