Spotting and preventing ad fraud

Ad fraud is not an exotic risk but a priced-in cost block. Industry estimates have run into the tens of billions a year for some time. For a single account the relevant question is more practical: how would I recognise it in mine?

The common types

Six warning signs in your own account

1. Unusually high click rates. Normal display click rates run 0.05 to 0.15 per cent. Above 1 per cent is almost always artificial.
2. Clicks without sessions. If the ad account reports 800 clicks and the site 300 sessions, 500 people vanished between click and page.
3. Bounce rates near 100 per cent on specific placements.
4. Traffic at odd hours. A local trade business with click peaks between 2 and 5 in the morning has no night trade.
5. Very even distribution. Real behaviour fluctuates. Exactly equal clicks per hour is a programme.
6. Unknown domains with a high share. If a domain you do not recognise takes 15 per cent of impressions, check it.

The most effective protection

Inclusion lists. Rather than excluding bad environments, admit only vetted ones. A list of 200 to 500 known publishers covers the relevant reach in most markets and shuts out nearly all the fraud surface.

The price is a higher cost per thousand, often double. The return is knowing where your advertising appears.

Further measures by effort

• Free: exclude all mobile apps, review the placement report weekly, exclude your own IP addresses.
• Cheap: add server-side measurement to reconcile clicks against sessions.
• Moderate: commission an independent verification service, one to three per cent of budget.
• Demanding: buy direct from selected publishers instead of programmatically.

The affiliate special case

Affiliate fraud works differently and is harder to spot. Frequently a tracking parameter is injected just before purchase, so a commission is paid on a sale that was already certain.

Signs: partners with very high conversion rates and very short spans between click and purchase; partners with no recognisable website; partners whose revenue rises exactly when you increase other channels. Review your ten highest-earning partners by hand once a quarter.