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The 2023 pandemic impacting your bottomline

Global ad fraud is now a US$127bn problem and affects businesses in every sector across Australia, from a two-person start-up to a 20,000-employee multinational. 

No online business is immune from this, as fraudsters, competitors, and bots attack online spending for their own advantage. At TrafficGuard, we think companies need to be better informed about the risks and how much they could be losing.

Regardless of the size of your budget, anyone trying to reach customers through digital channels could be losing, on average, 15-20 per cent of their budget to sophisticated online scams.

Clearly, ad fraud – whether bot-driven or not – will impact your bottom line in terms of both returns on ad spend (ROAS) and customer acquisition cost (CAC). A less obvious problem is that it lays false trails meaning that not only is your current campaign less effective than it should be, but the bad data collected from it could also potentially negatively impact your future campaigns as well. 

SMEs are at risk due to industry size

We know that SMEs account for 90 per cent of the world’s businesses, employing more than half the total workforce. And with 94 per cent of consumers researching products online before buying and three in five using search engines as digital shopping malls, small businesses can see up to 80 per cent of their business coming from digital advertising, meaning ad fraud can be the difference between success and failure.

We also know that when it comes to invalid traffic, not all are the result of malicious and deliberate ad fraud; we have all clicked on ads by mistake or accident, but whatever the cause, the result of invalid traffic is zero ROAS, which is why it’s important to have a robust way to detect and tackle traffic of all types.

One-fifth of your clicks could be fake

Digital ad spending rocketed in 2021/22 as the world came to grips with the Covid-19 pandemic. Much of it was driven by Pay Per Click (PPC) as one of the most accessible, targeted and cost-effective forms of digital advertising, particularly for SMEs. 

Click fraud is one of the most common forms of ad fraud enacted against PPC campaigns through the use of bots, clicks farms or false websites, as well as decreasing ROAS and increasing CAC, which often leads to a false sense of success because marketeers are seeing an inflated number of clicks and think it’s due to running a successful campaign.

The reason click fraud is so attractive to bad actors is due to the sheer amounts of money to be made. According to reports by the Winterberry Group, digital ad spend in 2023 is expected to exceed half a trillion dollars. Of which an eye watering US$100 million could likely be lost to fraudulent players.

Combating this can feel like it takes more time than creating the ad campaigns themselves, with marketing teams forced to manually review and filter IP addresses and constantly look for anomalies or patterns that indicate fraud may be taking place, which is often outside of their capabilities.

We also know that the risk of mobile ad fraud in the APAC region is particularly high, with an estimated $75 billion lost in this way in 2022. Research conducted on our behalf showed that the three top categories of mobile ad fraud are:

  • app install farms/SDK spoofing at 42 per cent
  • click injection – around 30 per cent
  • click spam and ad stacking at 27.3 per cent

Calculating your risk

To help Australian businesses understand the impact on their budgets, we have developed an industry first calculator which uncovers the scale of the problem for every type of business, from e-commerce-focused SMEs to enterprise level companies with seven-figure marketing spends. 

The unique calculator is an invaluable first step in uncovering the scale of the problem. Based on our legacy data, the calculator has just four simple steps and can be completed in seconds. The calculator asks for the major digital marketing channels a business uses, its industry, region and monthly spend in order to provide a highly accurate estimate of how much of that money could potentially be being wasted.

With our advanced machine learning algorithms and big data analytics which analyse vast amounts of data in real-time, identify unusual patterns and anomalies, and distinguish between human and non-human traffic, we help businesses maximise their budget and improve results by eliminating the impact of ad fraud and invalid traffic on ad spend across all digital campaigns, delivering a far healthier ROI.

More: https://www.trafficguard.ai

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Mathew Ratty

Mathew Ratty

Mathew Ratty is the WA based co-founder and CEO of TrafficGuard - a business that specialises in detecting and preventing invalid traffic and ad fraud in the digital advertising industry.

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