How AI Can Help Reduce Ad Fraud & Save Your ROI

How AI Can Help Reduce Ad Fraud

When it comes to digital marketing, you want to know the digital ads you use and the money you spend is worth the investment, and fraud complicates this process even more. That’s why it’s important to understand how Artificial Intelligence (AI) is helping to combat this so you can stay on top of your campaigns and get the best results. In this blog, we will look at how AI is being used to prevent and detect ad fraud so you can reduce it in your business. 

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What is Ad Fraud?

Ad fraud has become a big issue for companies all over the world that use ads online to reach leads. Individuals may commit fraud to generate revenue without giving any actual value to businesses. This could be click fraud, impression fraud, fake traffic, etc. Businesses can end up paying a high price for fraud when they waste money on ads for no return. 

Key Types of Ad Fraud:

  • Click Fraud: This is when artificial clicks are made on ads to drain the budget behind the ad. 
  • Impression Fraud: Is when the business is given false stats on the impressions they receive on their ads. 
  • Fake Traffic: Sending non-human traffic through ads. 

How AI is Combating Ad Fraud Prevention

1. Real-time Monitoring and Detection

AI is able to monitor ad traffic in real time and compare it to real human behavior. This means suspicious activities are flagged and investigated immediately. AI algorithms are excellent at finding patterns that show fraud, even in large amounts of data. 

2. Fraud Score Calculation

AI uses a fraud score that they place on every interaction a user might make. This helps AI to determine if something might be fraud. But trusting AI to handle what is and isn’t fraud alone is not wise. In fact, digital marketers will set thresholds using these scores that trigger specific actions more tailored to your industry in a way that AI cannot. This should save you time and money and not upset potential leads.

3. Behavioral Analysis

User behavior is a big part of how AI can detect fraud. If there are any unusual patterns or anomalies, the AI can flag them. This might mean that it detects an unusual click-through rate (CTRs) or rapid, repetitive clicks. By studying user behavior data, AI can tell the difference between human and bot use. 

4. Device Fingerprinting

AI can track unique device fingerprints when someone interacts with an ad. It tracks and profiles devices to identify anything that is suspicious, like more than one click from the same device. 

How AI Can Reduce Ad Fraud

There are lots of ways that AI can reduce ad fraud. Below is a table of features AI might use: 

 

AI Solutions Benefits
Predictive Analytics AI uses historical data to predict future fraud attempts, enabling proactive prevention.
Pattern Recognition AI algorithms recognize complex fraud patterns, adapting to new tactics as they emerge.
Machine Learning Models These models evolve with data, improving accuracy over time and staying ahead of fraudsters.
Anomaly Detection AI identifies deviations from expected user behavior, quickly flagging potential fraud.
User Authentication AI verifies user identities, ensuring that genuine users interact with your ads.

How to Implement AI for Ad Fraud Prevention

Step 1: Choose the Right AI-Powered Platform

First, the digital advertiser or business will need to find a trusted AI platform with extensive knowledge of fraud prevention. It’s so important to find one that gives real-time monitoring and adaptation if you want to stay ahead of fraud, which changes all the time. 

Step 2: Set Up Fraud Scoring 

Find a fraud scoring system that works for you and your business. This scoring system should be flexible as you do not want disgruntled customers/clients or fraud attempts. This scoring system should help you respond to fraud quickly, too. 

Step 3: Regularly Update AI Models

AI models are constantly being updated as new ways to commit fraud come to light. Keeping your fraud detection AI up to date helps combat fraud more accurately.

Step 4: Monitor and Analyze Results

Monitoring is essential for finding and eliminating fraud in online ads. Looking at the reports from AI can help you spot things you might not have before or the AI has missed. Reports will also let you know how effective your fraud prevention is so you can adapt and change as needed.  

Trends in Ad Fraud Prevention with AI

The better technology gets at the detection of ad fraud, the more advanced the fraudulent techniques become. AI will become more integral for fraud prevention as time goes on. Here are some trends in AI fraud detection that are worth paying attention to:

  • AI-Enhanced Fraud Detection: AI will be able to find sophisticated ad fraud schemes like deepfakes and AI-generated content. 
  • Blockchain Technology: Blockchain technology records information in a way that makes it almost impossible for the system to be hacked or changed. AI and Blockchain Technology combined can create an immutable ledger of all interactions on ads, making fraud methods even more challenging for the fraudster.
  • Improved User Authentication: AI authentication methods will help to enhance security more and spot when someone is genuinely interacting with your display ad. 
  • Global Collaboration: The industry will create better relationships between advertisers, AI, and regulatory bodies that already combat fraud. 

3 Cases of Ad Fraud and How AI Beat Them

Below are a few examples of fraudulent activity that has taken place when it comes to online digital ads. Take a look to see how AI might combat these kinds of cases.

Case 1: White Ops

In 2014, an infamous group of Russian organized criminals created a vast network of fake websites and apps to try and defraud digital advertisers out of millions. They did this with bots that generated fake traffic and clicks to make the websites look more popular. The fraud was put to an end by White Ops, who made an AI system to find fraudulent traffic. The AI was able to analyze patterns in data and see the clicks and traffic were not behaving in a human-like manner.

Case 2: 3ve

Symantec, the FBI, and law enforcement got to work in 2018 to take down a global ad fraud botnet called 3ve. Criminals used 3ve to create fake traffic and clicks on ads to cost digital advertisers millions. AI combatted 3ve botnet by identifying the fake traffic and clicks and ultimately determined the behavior of the bot was not human-like. 

Case 3: Methbot

In 2016, Methbot started its sophisticated ad fraud scheme. Fraudsters made between $3-$5 million a day by targeting specific high-value marketplaces. They created fake websites, then used bots and watched video ads from digital advertisers who paid for the space. Eventually, The Trustworthy Accountability Group (TAG) caught them by collecting and sharing data about the fraud. 

Conclusion: How AI Can Help Reduce Ad Fraud

Ad fraud is a big threat to businesses in the digital marketing realm, as it can cost time and money and give fake reports, leading to inaccurate campaigns. AI is getting better every day at combating this by monitoring, detecting, and real-time tracking so you can maximize your ROI. 

If you need assistance with custom content that ranks and gets clicks, improves your brand’s exposure online, increases quality traffic to your site, and converts visitors into customers, contact ClickGiant today. We are a leading digital marketing agency serving clients nationwide. 

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