Is Programmatic Advertising the Solution to Click Fraud?

Mention click fraud to your digital marketing agency rep, and you might just see their face go pale. Click fraud is a growing problem that generates billions of dollars in losses every year. Security experts continue to look for ways to stop it. Could programmatic advertising be the solution?

As things currently stand, an advertiser’s best defense against click fraud is to utilize some sort of fraud detection and prevention solution. It could be in the form of a software package, like Fraud Blocker, or a service that combines both software and hands-on analysis of a company’s ad data.

Programmatic advertising could be leveraged to improve click fraud detection and prevention by bringing even more automation into the equation. Exchange Wire’s The State of Programmatic in JAPAC 2022 report seems to suggest that deploying programmatic advertising alongside proven click fraud prevention solutions is helping companies fight back.

More About Programmatic Advertising

The programmatic concept makes heavy use of automation for purchasing media. In online advertising, the concept is applied to pay-per-click (PPC) and mobile advertising by automating both ad buys and placement. Automating the process helps companies better control their ad spend across ongoing campaigns.

Under the programmatic model, a company would create its ads along with the parameters it wants to use for purchasing and placement. The software would take over from there. Bids would be placed automatically; placement would begin occurring immediately thereafter. The whole thing happens in mere seconds.

Even setting click fraud aside for just one minute, programmatic advertising saves online advertisers a ton of time. It makes buying and placing add exponentially more efficient from a labor perspective. But does it actually do anything to prevent the fraud?

With Ad Verification, Yes

Programmatic advertising can minimize click fraud when ad verification is part of the process. According to Integral Ad Science’s Saurabh Khattar, ad verification does several important things:

1. Analyzes Context – Context is everything in terms of ad placement. If an ad is not placed in the proper context, it doesn’t do advertisers much good.
2. Analyzes Platforms – Ad verification solutions analyze the platforms on which ads are placed. The goal is to ensure they are placed on quality websites/apps and in the right positions to generate traffic.
3. Analyzes Audience – Most importantly, ad verification analyzes audiences to ensure that actual human beings are seeing ads. This is necessary to get around the hidden ad and ad stacking strategies scammers often rely on.

It has also been suggested that programmatic advertising gives advertisers the ability to interact directly with platforms rather than having to go through third-party publishers. And if this is true, it’s big. The third-party publishing space is where so many click fraud perpetrators do their dirty work.

With Click Fraud Detection Software

The benefits of combining programmatic advertising with click fraud detection software go directly back to the idea of automation. Just as a programmatic advertising solution buys and places ads automatically, a click fraud detection solution automatically monitors the key metrics that tend to indicate if something is wrong.

For example, consider click fraud perpetrated through the use of bots. Bots are automated software packages written with one goal in mind: to seek out and continually on PPC ads. Just by monitoring where clicks are coming from and how quickly they are being registered, an advertiser can uncover evidence of foul play.

Under normal circumstances, legitimate ad clicks do not come in at a consistent rate. There are peaks and valleys. There are busy times and quiet times. A fraud detection package should account for this. Assuming it does, a sudden surge in clicks that come in at a steady rate and from the same general location suggests a bot is at work.

What Software Is Designed to Detect

Specialized detection software is designed to detect certain types of click fraud by monitoring the digital paper trail fraudulent activity leaves behind. A well-conceived package can detect:

1. click bot activity
2. click farm activity
3. hidden ad scams
4. stacked ads
5. accidental click scams.

No piece of software can protect against fraud 100% of the time. That’s why the suggestion is to combine click fraud software with programmatic advertising. The programmatic advertising part of the equation increases the chances of mitigating fraud by verifying advertisements on-the-fly.

Programmatic Spend on the Rise

Exchange Wire says that programmatic spending in the Japan and Asia-Pacific (JAPAC) region is on the rise. Their 2022 report suggested that companies would increase their spending by up to 70% in 2024. It is clear that companies want to make better use of programmatic advertising moving forward. It will be interesting to see if there is any correlation between increased spend and click fraud losses among programmatic users.

The mere fact that programmatic advertising is gaining traction suggests that engineers should find a way to couple it with click fraud detection in order to mitigate advertising losses. The one or two companies that master it first will have a leg up on the competition.

An Easy Crime

In the meantime, click fraud continues to proliferate because it is so easy to pull off. Why is it so easy? Because online advertisers tend to shy away from the topic rather than deal with it head-on. Khattar says it could be a matter of fear.

It could be that advertisers are afraid to get into click fraud because they do not understand how it works. They think stopping it is far too difficult. It’s not as difficult as one might think, especially when automated tools are deployed. That takes us back to programmatic advertising and fraud detection software.

Both technologies are finally coming of age. As more advertisers embrace them, we are seeing that programmatic advertising and click fraud detection can work together to minimize fraud losses. Now the question is this: could programmatic advertising become the click fraud solution we have been waiting for? Anything is possible. We will have to wait to see what happens.