An IP Proxy Network (IPPN) allows brands to test their campaigns from every angle to fight ad fraud. Or Lenchner, CEO at Luminati, look at how brands can use an IPPN to retain their competitive advantage.
Digital advertising is the lifeblood of marketing. Digital ad spend hit £13.4 billion last year in the UK alone; a 15% increase an 2017. Developments in ad technology have allowed marketers to buy ad placements which are highly targeted to specific audiences. However, whilst the spend on ads increases, so too do the losses suffered by marketers.
Global ad fraud is a lucrative business and is predicted to reach $23 billion this year, though this could climb as high as $30 billion when indirect economic and social impacts are taken into consideration. This means that many marketers are wasting valuable advertising budget on ads that reach the wrong audience or simply don’t reach an audience at all, with ad spend instead pocketed by fraudsters.
Ad fraud is nothing new: its impact on the marketing industry has been felt for the past three decades. However, in recent years the problem has worsened. As a result of the growing digital ecosystem and the arrival of new stakeholders to the market, the advertising supply chain has expanded – and complexified. The advertising environment now involves thousands of intermediaries and presents a plethora of dark corners for fraudsters to hide and in which to conceal criminal activity. Of all the activities they seek to hide, those which exploit the pay-per-click advertising model are the most common.
How does click-fraud work?
Click-fraud refers to premeditated clicks on ad content that are not driven by a genuine interest in the ad’s subject. By arranging false clicks on ads, shady publishers take advantage of pay-per-click agreements and charge for clicks with extremely low conversion rates. When performed effectively, this can significantly impact advertising costs and revenue potential. In fact, by the time we reach the end of the year, an estimated $42 billion will have been lost to ad fraud.
Perhaps even more worrying is the fact that this figure is a massive 21% increase on the sum lost in 2018. Ad fraud is an increasingly sophisticated, high-profit crime, and one which comes with relatively little risk to its perpetrators.
Fraud attempts currently amount to 20% to 35% of all ad impressions; which is not just a lot of impressions lost to fraudsters, but a significant share of an advertiser’s audience which is not exposed to valuable inventory.
Traditional approaches to fraud detection have had little noticeable success, as the development of this technology has not progressed at the same rapid rate that fraudsters have been evolving their own techniques, resulting in an arms race in which fraudsters lead by a mile. Techniques leveraged by criminals include the use of botnets, which can be weaponised to create fake social media impressions or to behave like users in order to simulate other activities for monetary gain. These include streaming music to increase royalties, inflating app store downloads or creating fake reviews.
It is relatively easy for a fraudster to masquerade as a legitimate partner in this ecosystem. Let’s say a brand wants to advertise to a specific demographic in a specific market – teenage, male smartphone users in North America, for example. The brand will send ad content to the ad network or server, which is then published on a mobile application. The brand will be billed on a pay-per-click basis, which would be money well spent if the ads were served to the correct demographic. However, fraudulent service providers can easily (and all too often do), serve ads to a completely different audience (female pensioners in Egypt, for example), and still charge the brand. Fraudsters are also able to pass off low-quality inventory as a high-quality or premium site.
What can advertisers do to fight ad fraud?
How can advertisers today manage their valuable ads with confidence? How can they verify the digital journey of each of their ads and ensure they haven’t been hacked? And how can they guarantee that their ads are served to the right people at the right time, and serve as the revenue-generator they’re intended to be?
In order to track the digital journey of ad content and ensure that it reaches its intended demographic, country, city etc. advertisers need to be able to view ads as if they were that same intended demographic in that same country, same city etc. These details are revealed by a user’s IP address, meaning a brand can’t simply use its own computer network to check and verify ads. Fraudsters can spot brand IP addresses, and when they know that they’re being watched, will quickly respond by covering their tracks, blocking access to a site or serving misleading content.
On the other hand, having a physical presence (and therefore IP address) in every city, country etc. which a brand intends to test and then target with an ad campaign is prohibitively expensive and resource-intensive. Yet failing to detect ad fraud, in itself, results in significant financial loss for advertisers – as well as potential damage to their brand’s reputation.
Brands need a way of viewing the internet as if they were any one of millions of consumers being served an ad, and based anywhere in the world, at any time of day or night, and using any one of a multitude of connected devices an ad campaign is targeting. The solution is to use a sophisticated IP proxy network that will allow the brand to track a digital advertising campaign throughout the specific customer journey, allowing them to test links, ad placements and more – as if they were that specific customer.
What is an IP proxy network?
An IP proxy network leverages real IP addresses from real consumers based in locations across the world, and who have willingly opted-in via a landing page. These global consumers usually do this in return for ad-free applications that will improve their user experience. They can also opt-out at any given time. These millions of real consumer IP addresses provide a gateway for businesses to browse the internet without being blocked and enable them to view the internet as an individual or consumer would do – openly, transparently and freely.
How does an IP proxy network tackle ad fraud at scale?
Digital advertising technology is a double-edged sword. It allows for the automated distribution and targeting of ads on a massive scale, but as a result, presents a major challenge for advertisers, which are tasked with checking and verifying a massive number of ads. Furthermore, each of these ads may be unique in terms of what/where/when they’re served, and the variables dictating this are changing all the time.
An IP proxy network is needed to create a session based on the attributes of a specific user (via their IP address), and then to test the multiple different ads that might be presented to the user – and which are all competing for his/her attention. Take a social media brand, for instance, which could leverage an IP proxy network to split a user session and check all ads served to that particular user at that particular time, simultaneously.
Ad fraudsters have developed multiple methods to identify a business’s advertising ‘soft spot’ and exploit its revenue chain. The investment in digital advertising is huge and every business is a potential target for ad fraud.
Fraudsters can execute criminal campaigns very quickly and on a massive scale; the same approach must now be taken by brands. This can only be achieved via an IP proxy network, leveraging the real IP addresses of consumers who have willingly opted in to the network. Brands can ensure their ad journey is protected, does not feature any broken links, and is not compromised by hackers. In short: your ads are seen by the right people, in the right places, and at the right times – and you get the right level of return on your ad spend.
By Or Lenchner
CEO