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Protecting eCommerce from Ad Fraud

ecommers ad fraud
Reading Time: 4 minutes

Today, there are 12-24 million e-commerce stores worldwide. However, only 650,000 of these stores have merchandise worth more than US$1,000 per year. The intense competition in the e-commerce industry has led to a drop in profit margins and has been further eroded by click fraud and other malicious business practices.

If you own or operate an online store, you need to protect yourself from fraudsters who can steal you, damage your online reputation, and alienate your customers. This comprehensive guide covers everything you need to know about preventing e-commerce fraud. How it operates and what you need to do today to protect your online store from the severe threat of online click fraud.

Cost of Ad Fraud to eCommerce

Digital advertising can be a hard nut to crack, even for specialists in paid search marketing. It is easy for thieves to design account hijacking attacks against targeted digital ads.

According to IAB UK data, £7.3 billion was spent on display advertising in the first half of 2019. Considering that even after optimization, fraud remains at around 1%, it is estimated that fraudsters may have intercepted at least 23 million pounds of UK expenditure. Scams vary by country/region and device. IAS pointed out in the media quality report for the first half of 2019 that fraudulent behavior fluctuated from 0.4% to 11.7%, depending on whether the buyer implemented an ad fraud problem prevention or detection strategy.

What Is Click Fraud?

ad fraudFor many eCommerce store owners, the concept of click fraud seems new and confusing. Your model is vulnerable to click fraud because advertisers are responsible for paying for every click they receive, regardless of whether the visitor converted. This means that scammers deliberately click on business ads, have no intention of buying any products or services, and waste their advertising budget. Advertisers get clicks, so they have to pay even if they have no interest or intention to buy.

Those Responsible for Click Fraud

To better understand click fraud, you have to know who is behind it and what they stand to gain. Here are a few of the biggest click spamming offenders:

  1.  Competitors

Some strategies will allow you to rank higher on the keywords you want, but only one ad ranks higher. Competitors waste advertising budgets through fraudulent clicks on ads. If you fix a daily click limit, your ad will be taken down before it arrives, and your competitor is likely to rank first. This is an incentive for companies to use click fraud to boost themselves to the top.

  1.  Fraud Rings

The operation of fraudulent circles is similar to that of webmasters, and the purpose is to earn advertising revenue through fake clicks. The difference is that fraudulent gangs are committing these frauds on a large scale. They have a network of websites and thousands of unique IP addresses. Methbot is the largest ad fraud circle ever discovered, generating over $ 3 million in fraudulent revenue per day.

  1.  Webmasters

A webmaster is a publisher who owns advertising space on their website. They charge advertisers for every click of website visitor. Unfortunately, some webmasters are abusing it by generating fake clicks to increase advertising revenue. These fake clicks are not from real website visitors, nor are they executed by genuinely interested people in advertising. Webmasters can hire click farms or groups to generate fraudulent clicks.

How to Protect Your eCommerce App from Click Fraud

app ad fraud
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By 2022, ad fraud problem is expected to become a $44 billion industry, making it an increasingly threatening advertiser. As publishers develop measures to prevent click fraud, the following practical steps can be taken to detect and resolve click fraud.

Monitor Metrics Closely

Watch out for sudden spikes in campaign activity and advertising costs. This is especially suspicious if your advertising metrics are not consistent with your current PPC strategy. Another indicator is the surprisingly high bounce rate of over 70%. If you have a high percentage of users logging out of just one page, it could sign click fraud.

Refine Ad Targeting

One of the best ways to prevent ads from showing potential click click spamming offenders is to limit their exposure. You can control the coverage of your ads by adjusting your target audience to accurate geographic locations and demographics. You can also determine the priority of remarketing campaigns and target audiences at different sales funnel stages.

Study Traffic Sources

You can see suspicious activity by accessing the IP address information of ad clicks. Repeated clicks from areas are one of the most apparent signs of click fraud. Some publishers offer a way to blacklist offenders and exclude them from the campaign. A third-party click fraud detection service or mobile fraud prevention tool simplifies this process.

Final Words

Ad, fraud detection tool, is an industry that saves advertisers millions of dollars every year. As an e-commerce business owner in a fiercely competitive market, it is essential to actively look for potential click frauds in advertising campaigns to avoid losing marketing budgets to fraudulent competitors.

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