I originally wrote this article and posted it on the AdBistro blog. Check it out here.

According to The Bot Baseline, economic losses due to bot fraud in 2017 will be 10% lower than they were in 2016. In 2016’s study, the ANA reported that advertisers lost an estimated $7.2 billion due to ad fraud. Ad Fraud is a much larger issue than people realize. Although the loss will be less this year, advertisers will still lose ~$6.5 billion in 2017 to ad fraud.

This decline in losses due to fraud is promising for advertisers and publishers alike, because it accompanies news that advertising spending will likely increase by 10% or more this year.

What Is Bot Laundering?

Bot laundering is when fake traffic replicates human activity. Scammers can use these bots by selling them to publishers as “real traffic” or by using them to improve the traffic numbers on their own sites to charge more for ad space.

How Does Ad Fraud Work?

AdWeek recently published this article explaining four common ways ad fraudsters make money.

Fake Traffic Brokers

This happens which a publisher wants to increase traffic to its site. They will then go to a traffic broker, who promises to send high volumes of valuable traffic to the publisher’s site. Fraudsters will create traffic broker services that don’t deliver real traffic, but instead use bots. The publisher’s traffic will see an influx of users. The fraudulent traffic brokers are essentially protected and removed from the situation because neither the publisher nor the ad exchange will be unable to track them down.

Publishers who have purchased traffic from fake traffic brokers will likely be unaware that they are buying fake traffic. The bots are often created on real users’ computers using malware.

Ghost Sites

This involves creating content farms which churn out tons of thin, low-value content, and then using bots to create fake “qualified audiences”.

Ghost sites are websites which have tons of thin, low-value content published with the sole intent of ranking highly in search results. A content farm is a website that cranks out a very large number of articles a day full of low quality content written by freelancers or bots. The only intention is to rank highly on search engines. Google has cracked down on these sites, making them less prevalent, though.

URL Masking

CEO of Double Verify, Wayne Gattinella, explains that much of advertising technology’s infrastructure wasn’t designed with fraud prevention in mind. URL masking, an example of this, is when publishers sell their ad space to advertisers without disclosing where the ads will be published. The lack of transparency gives the publishers the abilities to inflate their site’s true value. They can make represent their site as more targeted, relevant and credible than it actually is, and charge advertisers more.

This can also involve a tactic known as “impression laundering,” which is when a site that steals copyrighted content hides the true location of the ads. This leads to ads being served alongside pirated content, which advertisers otherwise would avoid.

Pixel Stuffing & Ad Stacking

Some less-reputable web publications will put ads on their sites in a way that essentially hides them from users. These sites mainly use two tactics, pixel stuffing and ad stacking. Pixel stuffing is when websites cram ads into a 1-pixel by 1-pixel unit. The site loads the ad, but the user will never see it. Ad stacking, then, is when ads are placed on top of each other so the user only sees one ad. The advertiser still pays for the ads, despite the user remaining unaware of the hidden ads. Both methods lead to advertisers losing out on real views, and paying for fake traffic.

AdBistro Takes Action Against Non-Human Traffic

AdBistro fighting ad fraud is nothing new, as we’ve been improving our fraud protection and prevention for years. We’ve been working with DoubleVerify, an industry leader in detecting and preventing non-human traffic, since 2014. For our clients trying to get their message to potential buyers, paying for fake traffic could ruin their campaign. It is in AdBistro and our clients’ best interest to ensure the clicks or impressions are genuine people and not bots.

AdBistro’s BistroAPI is constantly evolving to make the ad buying process better for our clients, both advertisers and publishers.

Read more about how AdBistro avoids fake traffic on the AdBistro Blog