What is Programmatic Fraud and Why Does it Exist?

December 20, 2015Diana Lengerson

whyAdvertising-sm3A wide range of technologies that involve automated buying, optimisation, and placement are known as programmatic. This system creates profitable advertising campaigns that allow media buyers to generate traffic to their websites. However, as with any marketing campaign, there are concerns around programmatic fraud because it’s largely focused on buying ads and who actually sees these ads. The open nature of this system puts it at risk of fraud, which affects the entire supply chain. Here is a look at why programmatic fraud exists and what can be done about it.

Non-Human traffic
Non-human traffic can generate fake page views and click. In some cases, it can even lead to fake submissions and conversions. Many hosting providers nowawadays run simple bots from a server so they can easily identify user agents and block the non-human traffic from entering their websites.

Botnets are the other fake users who click on ads and generate fake traffic, making it look legitimate. However, this is the ultimate price that advertisers pay as it’s relatively difficult to detect and block botnets. If you don’t have an advanced anti-virus system installed in your PC, your advertising efforts may be a waste of time.

This type of fraud will only lead to excessive tracking, slow-loading sites, and spyware making its way into the personal computer of the user. It is for these reasons that many online advertisers together with popular search engines and sites such as OnlineScam.net have decided to take measures to stop programmatic ad fraud.

Human traffic
Human traffic is perhaps harder to block as the end users are real people who generate fraudulent clicks. Since these people are real and not bots, the merchants tend to only look for bots. Fraudulent publishers can also use invisible ads, which have no chance of being seen by actual visitors. This is often referred to as ad stacking, meaning hiding adverts behind other ads. The publisher uses multiple impressions for a single page view, but the only advert that’s visible is the top one.

The downside of open marketplaces
The programmatic advertising campaign is all about being open on the marketplace. This means any marketer or publisher is free to participate and create the opportunity for bots and fake users to join the website and click on the ads. As the line of entry for newcomers in the advertising market is so low, anyone can buy or sell their product or service online. Although this is a good thing for small advertising businesses and agencies, it is also advantageous for illegitimate users. The amount of fake traffic generated to websites is only causing Web pollution instead of conversion leads.

The victims of ad fraud
The main victims of ad fraud are obviously the online advertisers. Everyone else tends to benefit from this system, even though it’s short-lived. But the other victims who are not identified publicly in the ad-blocking debate are the Web users. Most of these people get enticed by thinking they will earn money and incentives for every click, whereas this couldn’t be far from truth. This type of fraud will only lead to excessive tracking, slow-loading sites, and spyware making its way into the personal computer of the user. It is for these reasons that many online advertisers together with popular search engines have decided to take measures to stop programmatic ad fraud.

Eliminating fraud
Google has started taking steps in reducing advertising fraud by ensuring botnets cannot hide behind suppliers. Although it’s quite impossible to identify exactly which vendor is responsible for the misrepresented inventory, Google is still looking for ways to change this system so that fraudulent ads are identified right away. With the help of Google, the buyer can get a refund on the fake ad and block the supplier. Eliminating online fraud is everyone’s top priority, but there is still a need for more transparency.

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