Digital ad revenue has reached an all-time high in the United States, increasing 19 percent in the first half of 2015 versus the same period in 2014 according to the IAB Internet Advertising Revenue Report. Frighteningly, the report also indicates that up to $18.5 billion is projected to be lost to ad click fraud in 2015; that equates to $1 out of every $3 spent.

This is a serious issue that affects everyone in Internet marketing – publishers, ad networks, ad exchanges and, most importantly, marketers, since it’s our money they’re stealing. According to a White Ops/ANA study, 11 percent of display ads, 17 percent of programmatic, 23 percent of video ads and 19 percent of retargeting ads are affected by click fraud.

Criminal activity is varied in pay per click (PPC) online advertising – from advertisers clicking on competitor ads to drive up costs, to dishonest publishers clicking on ads to drive revenue and click farms where low wage earners in foreign countries are paid to click ads.

The larger and more commonly known click fraud issue is the imitation of human behavior, generated by an automated script or bots clicking ads to divert revenue. It’s difficult to catch the criminals behind these attacks and more difficult to hold them accountable. It’s organized crime in the digital age.

Industry experts are beginning to get on board with the fight against online ad fraud. Programmatic leaders like Google make strong efforts to filter out click fraud activity in their algorithms. Google reflects this transparently as invalid clicks or interactions and also employs a team of 100-plus ad fraud specialists. Recently, they’ve joined other ad networks and agencies in pledging support for the efforts of the Trustworthy Accountability Group (TAG) to fight against ad click fraud and create transparency. TAG, created in partnership by the 4A’s, ANA and IAB, has a two-part “Verified by TAG” initiative that includes TAG Registry to identify responsible ad providers and Payment ID to prevent payment to fraudulent companies.

Feel like a tiny fish in a large, murky pond? Wondering what can you possibly do to combat such a large problem? Don’t be discouraged.

There are actions you can take to identify and reduce click fraud in your campaigns. Look for the following:

• A sudden, large increase in traffic or clicks with a significant drop in conversion rates
• Sudden or significant drop in conversion rates with little or no change in bids
• Lower user engagement such as a sudden rise in bounce rates
• Repetitive clicks from the same IP address or increase in traffic from foreign countries or regions differing from normal traffic pattern
• Spike in traffic for a single keyword or ad
• Spike in clicks from one search engine but not for others

Here are best practices you or your service partner can implement to protect your pay per click advertising dollars:

• Monitor your campaigns daily, noting unusual activity. Don’t set them and forget them.
• Diligently block unwanted sites and activity (again, daily), excluding IP addresses or regions if necessary.
• Refine your targeting, excluding targeting responsible for fraudulent activity.
• Demand transparency from ad networks and other providers.
• Change your KPIs from clicks and page views to stronger conversions that require more complex tasks bots cannot perform, such as filling out a form or purchasing a product.
• Provide, in writing, your anti-fraud policies, terms and conditions for non-human visitors to all external partners/providers.
• Report possible fraud to your provider.

These best practices are not difficult to employ and will result in much better-performing campaigns.

If you would like to more information about how you can combat click fraud, please reach out to wstorey@wrayward.com.