The digital advertising landscape is constantly evolving, and with it, so is the risk of fraud. Online advertising has many perks, but it can also be abused. Ad fraud is a significant issue that can cost businesses millions of dollars and damage their reputation in the process. In this blog, we’ll explore some of the biggest ad fraud cases and the lessons we can learn from them. We’ll look at the different types of ad fraud and how they can be prevented. Lastly, we’ll talk about how important it is to stay aware and take action to protect your business from ad scams.
What is Ad Fraud?
Criminals commit this type of fraud when they try to steal from a business’s advertising, which causes advertising money to be lost or stolen. This can be done in a number of ways, depending on the type of advertising effort the business is running and the tools the scammers have. Scammers use complex methods, so we must also use complex methods to stop them.
Scams that target your digital marketing efforts waste your advertising budget, bring in fake leads, hurt your image, and can even lead to expensive TCPA violations. Because of this, it’s becoming more and more important to protect your business from this kind of fraud to keep your information, advertising budget, and online profile safe.
Ad fraud is a serious and growing issue, with the latest data indicating it will cost businesses €120 billion by 2023. Big companies like Uber, Procter & Gamble, and Verizon have all fallen victim to ad fraud in recent years, but this issue affects businesses of all sizes and budgets. To protect their own budgets from fraudsters’ increasingly sophisticated tactics, marketers and advertisers must learn from previous cases. Here, I outline some of the most shocking cases of ad fraud we’ve seen and the lessons we can take away from them.
The Biggest Cases of Ad Frauds in The Past Few Years
Fraudsters have tried everything from fake clicks and click flooding too bad bots and fake ad views to steal money from your advertising budgets.
Let’s look at some of the worst and most well-known cases of ad theft in the past few years, which hurt some of the most well-known brands in the world.
Methbot: Fake Video Views Cost $5 Million a Day
In 2016, it was found that Aleksandr Zhukov, who called himself the “King of Fraud,” and his group of scammers were making between $3 million and $5 million a day by making fake clicks on video ads.
“Methbot” is often called the biggest digital ad fraud scheme ever found. It was a complex botnet scheme that defrauded brands by letting millions of bots watch 300 million video ads per day on more than 6000 fake websites.
Due to the high cost-per-mille (CPM) of video ads, Aleksandr and his group were able to steal millions of dollars every day by focusing on high-value markets. The New York Times, The New York Post, Comcast, and Nestle are just some of the companies that were scammed by the Methbot fraud ring.
Late in 2021, Aleksandr Zhukov was given a 10-year prison term and told to pay back more than $3.8 million.
Uber Spent $100 Million on Ads That Were a Waste.
Uber sued and won a 2019 high-profile case against Fetch, BidMotion, Taptica, YouAppi, and AdAction Interactive.
Uber said that its ads weren’t working, but it turned out that about $100 million, or two-thirds of its ad spend, wasn’t needed. This happened because ad retargeting companies were taking advantage of the system by sending fake traffic.
The company found out how bad the ad fraud was when it spent $100 million less on ads and saw no change in the number of rider app downloads.
In 2020, Uber also won a case against Phunware Inc. when they found out that most of the installations of the Uber app that Phunware Inc. said they did were caused by a practice called “click flooding.”
Criteo Sues a Competitor For Supposedly Running a Harmful Click Fraud Scheme With Fake Ads.
Criteo, a retargeting and display advertising network, said in 2016 that Steelhouse, now MNTM, ran a click fraud plan against it to damage its reputation and take credit for visits to retailers’ websites that users didn’t make.
Criteo filed a case saying that it lost TOMS as a client because Steelhouse allegedly used bots and other automated methods to make fake clicks on TOMS’ ads. Criteo has said that Steelhouse is doing this kind of ad fraud to try to show that Steelhouse’s service is better than its own.
Twitter: Elon Musk Says That There Are a Lot of Fake Accounts on The Site.
Elon Musk and Twitter are involved in one of the biggest and most complicated tech deals in recent history. Twitter is taking Musk to court because he broke a deal to buy the social media giant for $44 billion. However, this is not the end of the story.
Musk has also said that Twitter hid the real number of bots and fake accounts that were on its site. He has also said that the company is dishonest because these accounts make up about 10% of Twitter’s daily active users who see ads. This means that 65 million of Twitter’s 229 million daily active users are not seeing any ads at all.
Advertisers Can Learn 6 Things From These High-Profile Cases of Ad Fraud
All of these cases show that ad theft is a common and widespread problem that hurts even the most well-known brands in the world in ways that last for a long time.
The bottom line is that marketers and advertisers can no longer ignore ad fraud if they want to reach their goals and aims. Here are some of the most important things we can learn from these high-profile cases.
- Nobody is Safe From Ad Fraud
Ad theft affects everyone, from small businesses to big companies like Uber. Also, scammers don’t care where they are. If you do business anywhere in the world, you could be affected by ad fraud.
- Using Human Methods, it is Very Hard to Find Ad Fraud
Fraudsters use a wide range of sneaky methods and channels to trick and steal from marketers. This makes it very hard to spot ad fraud by hand. This is especially true if companies don’t have the right tips and people who are always looking for and keeping an eye on ad fraud.
Even worse, companies rarely have teams of experts to spot ad fraud in the massive amounts of data each campaign generates.
Ad Fraud Wastes Your Budget, Messes up Your Data, And Keeps You From Meeting Your Goals
Ad fraud takes a big bite out of your budget, which is a huge problem for any business. But it also affects your ability to get things done in other ways.
For example, fake clicks and click bots lead to skewed analytics. This means that when you evaluate advertising channels and campaigns based on the traffic and engagement they get, you’re actually using bad data to make smart decisions for the future.
Even if You Don’t Know it Yet, You May Already be a Victim of Ad Fraud
As we saw in many of these cases, scammers did a lot of damage because the brands didn’t know they were being targeted. Also, because people don’t know much about ad fraud in general, it’s possible that you’re already being affected by it.
Last but not least, your ability to reach your goals is seriously hurt by stolen funds and faulty data.
You Have Options to Fight The Effects of Ad Fraud
Luckily, as demonstrated by these cases, there are some options available to counteract the impact and losses caused by ad fraud, such as requesting a refund or even making a case to sue. In such cases, ad fraud detection solutions are extremely useful to uncover ad fraud and gather evidence.
But The Best Option is to Prevent Ad Fraud From The Get-Go
The best ad fraud protection is ad fraud prevention. Fraudsters can only be stopped by equally sophisticated remedies. Machine learning and artificial intelligence anti-ad fraud software let you focus on improving campaigns and meeting goals.
Ad fraud is an ongoing issue in the online advertising world and often causes harm to both businesses and consumers. With an understanding of the major ad fraud cases that have taken place, we can learn from the mistakes made and apply better fraud prevention practices in the future. By being aware of the consequences of ad fraud, businesses can take steps to protect themselves from becoming the next victim. As the digital advertising industry continues to evolve, it is essential for companies to stay up to date on the latest trends and technologies to protect their brand and maintain the trust of their customers.