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Ad fraud and the impacts

Ad fraud and the impacts

Basically, ad fraud this the term used to call a methodology which is burning advertiser’s budget without giving any real return’s on the investment and on other hand which will be generating revenue for the publishers/middle technology providers. It is biggest threat in the digital marketing industry and every technology providers/digital security agencies try to find solution to safeguard their brand in the digital ecosystem.

Major types of ad fraud in recent years

Bot Traffic:

These bots traffic further classified in to two types of invalid traffic(GIVT, SIVT). GIVT is the method which generates the impressions from the web servers/hosting providers which can be easily filterable by the technology companies because it was basic level of fraud. SIVT – is the advancement of the GIVT which is also generates the impressions from the servers/hosting providers but with the different parameters/user data’s like different ip’s, user agents like normal human traffic which is hard to predict but the present improved technology solution providers are filtering from the valid traffic.

Domain spoofing:

This type of fraud is the traffic from some different sites/apps with the legitimate website domains or app domains. This one causing major losses to the advertisers and their return on investments.

Ghost sites:

These sites will not have actual human traffic(Mimic of human traffic).

Click spamming:

Generating large number of clicks to make installs as legitimate one.

CTIT anomaly:

This type of fraud is familiar in the install campaigns, CTIT(Click to install time) is a parameter used to check the genuine app installs.


Few apps which might be hijacked to run ads forcibly when the mobile is locked or run behind the users actions. This type of fraud is in increasing trend nowadays. These type of hijacking will be executed by the bad actors in the market or it might be a development bug by the website or app developer. 

Ad spend losses by fraud

Major players in the market have studied the losses incurred by the advertisers due to the ad fraud was depicting the industry is in vulnerable conditions. As per research by cyber security company “Cheq” ad fraud cost would be reach $23bn this year(2019) from $20bn from last year(2018) and this was stated in their report The Economic Cost of Bad Actors on the Internet, Ad Fraud 2019

Further they predicts that this will be in increasing trends as it will cost $26bn in 2020, $29bn in 2021, $32bn in 2022. Cheq further added this will affect the small companies which is yet to register them as a brand in the digital marketing ecosystem.

   Source: The Drum

Also,  a study conducted by “TrafficGuard” (Technology provider for ad quality) indicates loss of ad spend due to the fraudulent activities which is clearly showing that the APAC region will be in the top in coming years followed by America’s, Europe and the rest of the world.


AD Fraud by top 15 countries by volume

As per the reports by the Pixalate – Fraud detection technology tool India is in the top place with 39% ad fraud and U.S ad fraud rate is at 19% of the spend happening on the invalid traffic. Japan has the least rate of ad fraud with over 10% compare to the other countries. This report is based on the Q2 results of the 2019 with the Pixalate inventory scanned volume.

Source: Pixalate

Ad fraud by environment

In display advertising Smartphone in-app has the higher IVT percentage compared to other environment with over 22.7% IVT followed by the Tablet in-app with 20.3% of IVT. Whether Tablet web has lesser IVT across all other environments which are close to 9%.

Like the display advertising In-app is the top environment in Video advertising. Here IVT % for Smartphone In-app has 59.5% morethan the display In-app which is 36.2% IVT followed by the Tablet with 30.8% IVT. Similar to the display, Tablet website video advertising has lesser IVT% which is 10.5%.

Fraud by category

The app categories which caused the major role in the increasing IVT% are mentioned in the below by operating system wise.

Source: Interceptd

In android, finance related apps has more IVT% whereas shopping category apps has more IVT% in IOS operating system.

Operating system Vs Envionment IVT%

As per the report from Pixalate and Interceptd – Android has higher display IVT% and IOS has higher video IVT%.

Ads.txt implementation as solution

IAB tech lab has introduced the ads.txt concept to reduce the ad fraud from the web inventories which has good results after implementation from May 2017. Ads.txt is a text file which is in the root of the site domain which lists the authorized vendors who have access to their inventories either direct or to resell to other partners. Which has reduced the significant level of ad fraud in the desktop and mobile web environments.

As per the IAB report, ads.txt implementation is increased from 57.5% at Q4 2017 to 78.3% in Q4 2018. This will help the buyers to control over the domain spoofing but the bot traffic is still existing in the web environments but the ad fraud rates have reduce by 3.5% compared to the ads.txt implemented sites over the non ads.txt implemented sites.

App-ads.txt implementation as solution

To fight against the In-app fraud IAB has introduced app-ads.txt for the mobile in-apps and CTV apps. This was introduced in March 13, 2019, which will help the buyers to fight against fraud. Like the ads.txt it will also designed to be implemented in the root directory of the apps domain which will be able to find by the tools of the buyers to verify the legitimacy of the inventory and sellers.

Apart from these implementations, there are lot of security firms which are working closely with the sellers and buyers to figure out the fraudulent activities to prevent the ad fraud to protect the digital ecosystem safer for the revenue growth and sustain in the market. We have to closely watch the happenings in the industry and following the reports and blogs from the firms and IAB which will help us to safeguard ourselves from the fraudsters.

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