Protecting Your Advertising Investments: How Advertisers Combat AI Fraud

Over the past year, there’s been a marked increase in the daily use of AI technologies, particularly within the business world. For example, 76% of advertisers already use AI generative tools for basic content creation, and many more intend to capitalize upon this trend.

However, while there are many clear benefits associated with the use of AI in marketing, there are also many pressing challenges, including AI fraud.

Whether it takes the form of click fraud, impression fraud or ad fraud, this can quickly derail your business marketing efforts, resulting in a loss of income and conversions. This is particularly concerning when you consider that the cost of digital ad fraud already sits at $120 billion annually and will likely continue to rise alongside the use of AI.

This article will explore the various types of AI fraud while providing advertisers with the insight they need to safeguard their businesses.

Understanding AI Fraud

AI Fraud can take many different forms, including:

• Click Fraud
• Impression Fraud
• Ad Fraud

Click Fraud

Click Fraud occurs when bots are used to “click” or interact with ads, resulting in a spike of engagement that does not translate into conversions. When companies have opted to generate PPC ads, this can quickly begin to impact their bottom line.

Click Fraud is generally noticeable through analytics — paying attention to times when traffic increases but sales and conversions do not.

Impression Fraud

Impression fraud sometimes referred to as “display fraud”, occurs and is used to suggest that an ad has received views or engagement when it actually has not. In this scenario, the individual responsible for the fraudulent activity can make money by generating large amounts of false impressions.

Ad Fraud

There are many other forms of ad fraud that advertisers must keep an eye out for. For example, this could include ad injection. Here, ads are added to websites or mobile apps without permission from the owner, often “replacing” the existing ads on your platform. Domain spoofing is another major issue, wherein fake hosting websites are curated, and advertising space is sold to unknowing advertisers, who may believe they’re entering a partnership with a well-known brand.

The Consequence of Ad Fraud & The Need for Safeguards

There are many consequences associated with falling victim to ad fraud. Firstly, it is a significant drain on both the resources and finances you have invested into advertising campaigns, especially when you will not receive a positive ROI through false traffic and engagement. Furthermore, it can also harm your brand’s reputation quite considerably.

As such, there is a clear need for safeguards that, once established, will protect advertising campaigns from AI ad fraud in all of its many developing forms. Failure to combat this issue now will lead to a greater distrust of AI technology within any capacity in the marketing world at a time when establishing consumer trust is essential. After all, only 20% of consumers have a “high level of faith that AI systems are trustworthy” before you begin to factor in their experience with AI fraud.

Safeguard Strategies

Each year, more and more money is invested into digital marketing, with the industry amassing $521 billion in 2022 alone. As such, it’s crucial that advertisers ensure they are spending their advertising money wisely by knowing exactly how to mitigate AI Fraud.

There are many safeguarding strategies that advertisers are currently employing to prevent AI fraud in their advertising and marketing efforts. This includes:

• Paying attention to analytics.
• Choosing advertising platforms carefully.
• Reacting quickly to signs of fraud.

Paying Attention to Analytics

One of the most effective ways in which you can protect your business from AI advertising fraud is to pay close attention to your analytics and metrics. For example, this will enable you to pick up on some of the warning signs of fraud, such as an increase in clicks that do not correlate with your typical conversion rates.

In relation to click fraud specifically, markets may benefit from using some form of click fraud prevention software. This is particularly important when you consider that “11% of search ad clicks and 36% of display ad clicks are fraudulent, according to a recent study from PPC.

Choosing advertising platforms carefully

If your company has fallen victim to domain spoofing in the past, then it’s crucial you are able to choose advertising platforms or ad-hosting websites carefully in order to protect your best interests. Work only with legitimate websites that you recognize, and assess the legitimacy of any company before uploading to their website. Keep a keen eye out for obvious signs of domain spoofing, such as website domains that are similar to larger, more reputable brands, only with a different spelling or a single character difference.

Reacting quickly to signs of fraud

Being able to pick up on and react quickly to signs of AI fraud can also work to protect your business and uphold the effectiveness of your advertising campaigns. For example, if you notice an onslaught of traffic from untrustworthy websites or IP addresses, you can quickly block them. This enables you to ensure that you are receiving quality traffic toward your site. You should also ensure that you are quick to report fraudulent activity on other hosting sites, as many will have systems in place to resolve the issue once alerted.

Challenges & Future Outlook

As AI technologies advance further, so will AI Fraud. While this may seem daunting, it’s important to note that this is often a natural consequence of the introduction of new technology — there will always be those who attempt to exploit it for personal gain. However, intervention methods, such as anti-click fraud software, will also improve as we begin to find new ways to target this issue.

As such, advertisers should continue to research new ways in which they can prevent AI fraud, ensuring they put their best foot forward in this rapidly evolving digital world.

Conclusion

In conclusion, while AI is undoubtedly a valuable tool for advertisers across all industries, it is important that you work to avoid AI fraud moving forward. In short, you need to ensure this advancement is working for you, not against you.

This requires constant vigilance on behalf of the advertising team. In the same way, you analyze metrics to assess the effectiveness of specific adverts, look out for signs of fraud, and employ effective strategies to prevent you from falling victim to AI fraud.