Ad fraud is a type of scam in which the perpetrator fools advertisers into paying for something that is worthless to them, such as fake traffic, fake leads or misrepresented and ineffective ad placement.
Types of ad fraud include:
Click fraud: One of the oldest and most common types of ad fraud, click fraud is the generation of fake traffic through automated clicking programs called hitbots or the efforts of large numbers of low-wage earners employed by a click farm. Despite the high click rates, there is no possibility that any of the fake traffic will lead to a sale, so the advertiser is paying for nothing.
Search ad fraud: The perpetrators create websites and use keyword stuffing to artificially improve their position on a search engine results page (SERP). The fraudsters focus on popular keywords, which yield the highest cost per click. Advertisers for whom those keywords are relevant then buy ads on the fake websites, where they have little chance of being seen.
Ad stacking: The publisher sells multiple ads on the website for a given spot. All of the ads are placed there, generating impressions when people view the page, but the ads are stacked so that only the top one is visible.
Domain spoofing: The fraudster misrepresents the domain where an ad is to be placed as that of a legitimate and high-profile website. In real-time bidding (RTB) advertising, publishers can sometimes identify their domain. The publisher of a website offering pirated videos, for example, might pretend to be associated with the site for a legitimate movie studio.
Pixel stuffing: Ads are placed within pixels on the page. Because they are on the page, an impression is registered when anyone visits it but because they are invisible, no potential customer actually sees them.
According to White Ops, a security vendor, ad fraud costs the advertising industry $7 billion annually, on a global basis.
See also: ad fraud botnet