We all know that fraud is a costly threat source confronting advertisers. The question we are left to ask, however, is”why?” What’s the motivation behind those fraudsters’ actions? How do they interpret clicks into cash? And, most of all, what […]
We all know that fraud is a costly threat source confronting advertisers. The question we are left to ask, however, is”why?”
What’s the motivation behind those fraudsters’ actions? How do they interpret clicks into cash? And, most of all, what can we do to jumpstart the marketplace against danger in the face of ever-increasing numbers of strikes?
How & Why Online Advertising Works
To put it simply, fraudsters target online advertisers since it is highly lucrative. To see why, it is helpful to know a few ins-and-outs about these advertisements.
There are lots of different versions of online advertising. As an example, advertisers can pay for their ads to appear within Google’s search results. Advertisers may also publish advertisements on social networking sites like Facebook and Twitter, targeting customers with relevant interests according to their social networking activity.
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Another popular method, however, is to market with an ad network. These entities pool chances to market ads, then organize the sale of these opportunities to advertisers.
The electronic affiliates who run advertisements are usually compensated on a pay-per-click (PPC) method. Their advertising revenue is based on the amount of traffic they could drive to the advertiser’s website. While it isn’t totally reliable, it is at least a fair way of determining an advertisement’s effectiveness.
The average cost per click (CPC) in Google Ads is $0.63 on the screen network. That might appear cheap, but the costs can mount quickly. Having said that, the average company will earn $2 in earnings for every $1 spent on advertising, making online ad campaigns a costly, but ultimately lucrative way of earning new clients.
The Incentive to Commit Fraud
Fraudsters manipulate clicks to accomplish many different goals. As an example, a cybercriminal may create a phishing website, then artificially inflate the website’s click numbers to push this up into the first page of search results. It might also be used to manipulate public opinion by making some pages look more popular than they are. For our purposes, we will concentrate on the effect of click fraud on electronic advertising.
Digital ad spending attained a projected $111 billion in 2018. But obviously, with any market of that size, you are likely to find some bad actors attracted by the chance to earn a fast buck. There is an incentive for affiliates and publishers to create as many clicks as possible. . .even if they are not real.
The expression”click fraud” refers to a practice whereby outlets generate false clicks to artificially inflate the amount of traffic driven to the advertiser’s website. Since these ads are paid-per-click, the fraudsters collect banner revenue with every fake visitor. Alternately, companies may engage in underhanded tactics like click fraud to damage their competitors.
This issue is growing at a rate of 50% annually . And, given that retailers lost almost 20 percent of the electronic advertising spend to click fraud abuse back in 2016, it is now more of a problem than ever.
Advertisers pay a hefty initial price for these events. However, like most other types of online fraud, the costs eventually diffuse and affect other parties, too. As an example, with more of advertisers’ budgets consumed by fraud, they will have less cash to invest with valid outlets and affiliates. People might even lose faith in the long-term viability and effectiveness of online marketing.
Common Click Fraud Tactics
If we are going to prevent click fraud from spreading any further, we will need to delve into the specifics of how this practice works.
As I mentioned in a different article on this subject , there are lots of avenues through which a fraudster could pull-off a click fraud assault. One could, for example, set up a click farm for collaborators to manually-rack clicks up. This is less common for the purpose of ecommerce fraud than it is when seeking to artificially inflate users’ social media followings.
While source – and – time-intensive, click farm attacks continue to be plausible. A much more common strategy, however, would be to initiate an attack by spreading malware to unsuspecting users. Malware attacks targeting smartphones and other mobile devices were up by 50 percent in the first half of 2019 compared to the same period the previous year. A number of these strikes were likely to disperse bots, which then passively click ads without the consumer‘s knowledge.
The publishers are usually the culprits behind click fraud incidents, while advertisers and advertising networks shed billions because of their publishers’ actions. The publishers collect commissions for driving imitation, junk traffic to advertisers’ websites. And here is the rub: minus the know-how to discover bot and other click-based attacks, you can inadvertently hire bad actors who just want to steal from you.
Possible Solutions for the Click Fraud Problem
With the technology now available, you need to be mindful of the warning signs of bot activity. As an example, your click-through rate should be within a reasonable range; abnormally significant numbers suggest something isn’t right. Other warning signals, such as high bounce rates and striking changes in speed ought to be investigated, too.
These and other approaches provide some cover, but aren’t reliable bulwarks against click fraud. However, new developments present a possible solution in the kind of blockchain technology. Blockchain technology should definitely be regarded as a possible game-changer in the reduction of click fraud threat.
Ad purchases are usually conducted with a fairly opaque procedure. There’s very little transparency, so the advertiser scarcely knows anything about who finally gets served an ad, and who clicks on it. This is exactly what makes bot-enabled click fraud so common: it’s easy to eliminate.
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Conducting ad purchases using a blockchain, however, would provide brands the insight to understand precisely where their money goes. This is because the blockchain functions like an open ledger, available to anyone, at any time, and from any device with the ideal software. This type of system allows for transparency and precision, while its decentralized and consensus-based nature prevents any one party from manipulating the document.
Using a blockchain, advertisers can return and confirm both transactions and the writer attached to them. This would make it much easier to spot abuse and questionable activity.
While we might still be far from a universal solution to contend with click fraud, new technologies offer the possibility of mitigating our risk.
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