According to Statista, digital ad spending amounted to $204 billion worldwide in 2017. A few years later, in 2019, the industry generated over $120 billion in revenue. This figure is likely to increase in the upcoming years as more brands turn to the programmatic advertising market.

Like any industry in which exorbitant sums of money are involved, the world of online advertising is extremely attractive to scammers. Indeed, ad fraud is one of the biggest challenges facing publishers, advertisers, and companies today. Every year, publishers are losing more and more revenue to fraudsters. And 2020 seems to be especially profitable to scammers.

Indeed, the FBI reported that cybercrime has spiked since the beginning of the coronavirus pandemic. It wouldn’t be surprising to see a rise in ad fraud attempts as well. Scammers have gotten creative with the ways they drain money from this multi-billion dollar industry. And the ad fraud examples we’ve prepared are going to show that.

For now, one thing seems to be on every publisher’s mind — how to protect themselves from ad fraud. As technology advances, there are many ways to save your revenue and detect fraudsters before they do any real damage to your business.

Unfortunately, there are still companies and individuals who fall victim to digital ad fraud. Let’s look at the scammers that targeted them.

Video Ad Fraud That Drained Phone Batteries

The ad fraud examples in this article prove just how damaging scammers can be to the industry. Here’s the first case.

When can a banner ad be deceptive? When it’s actually a hidden video ad that produces fraudulent ad revenue while also draining your customer’s phone battery and using more mobile data than expected.

In 2019, BuzzFeed reported that Android apps using MoPub ad platform were embroiled in an ad fraud scheme. Their in-app banner ads were hijacked to generate revenue for scammers operating in the digital advertising industry. The victims of this scheme were both consumers and app developers. Without any obvious reason to developers, their apps quickly drained customers’ phone batteries.

Fraud detection firm Protected Media uncovered a fraudulent activity that explained what drained the batteries. Scammers would purchase cheap in-app display inventory only to hide auto-playing videos behind fake branded display ads. Customers didn’t see these videos although they played in the background, thus generating revenue for fraudsters.

Here’s how the scheme worked:

Another ad fraud lab, DoubleVerify, identified the same scheme at the end of 2019. The company detected at least 60 million ad calls being made for fraudulent video ads per month. This gives you a clear picture of the scale of this battery-draining scheme.

Let’s now move to our other ad fraud examples!

Methbot Ad Fraud That Generated Millions

In 2016, the cybersecurity company White Ops uncovered one of the biggest online ad frauds ever involving the now infamous Methbot. This botnet was located in Russia and relied on foreign computers and networks across Europe and North America to set up its scheme.

A group of Russian cybercriminals were making between $3 and $5 million every day by attacking the online advertising market. They were able to generate this revenue thanks to their meticulous planning. Namely, their infrastructure consisted of 571,904 IPs. The crew then created over 6,000 domains and 250,000 distinct URLs that only hosted a video ad. These websites used variants of the names of big publishers to come across as legitimate as possible.

This helped the fraudsters deceive the system, tricking algorithms to select their fake websites over those of larger and legitimate companies. They would then show the most profitable ads on these pages, charging advertisers at a premium who were unaware of the fraudulent activity. Aren’t these ad fraud examples worrying? Wait until you hear more!

Scammers faked traffic with the help of their large bot farm, producing revenue due to the pay-per-click system. These bots “watched” between 200 and 300 million video ads per day, with an average payout of $13.04 per thousand impressions. At best, Methbot could earn an estimated $5 million a day.

How much did the online advertising industry lose? Some sources claim that Methbot siphoned over $180 million from digital companies tricked into running their ads on fake websites.

We’ll finish our ad fraud examples with an operation that also generated a lot of money by scamming advertising companies.

Large Click-Fraud Scam

Another botnet caused headaches to publishers and advertisers in 2015 — Chameleon. In another one of our ad fraud examples, you’ll see that it’s possible to fake billions of page and ad views. Let’s see how this happened.

Fraud analytics firm Spider.io identified a small botnet that cost display advertisers around $6 million every month. The botnet would falsely view billions of pages and ads on 200 websites run by a group of publishers. Chameleon would mimic human behavior on these sites, including clicking or rolling a mouse over display ads. This would generate billions of ad impressions and fraudulent income for its creators.

At the time, Spider.io claimed that Chameleon was the first botnet to attack online display advertising rather than text-based advertising. It operated from 120,000 infected hosts in order to bombard specific websites with billions of fraudulent visits. In addition to that, Spider.io reported that advertisers paid around $0.69 per one thousand impressions generated by the botnet.

These ad fraud examples are both alarming and concerning! But you can avoid falling victim to scammers with the help of TargetVideo.

Prevent Ad Fraud With TargetVideo

Experts estimate that the costs related to digital ad fraud worldwide would increase between 2018 and 2022, from $19 billion to $44 billion! So, it’s safe to say that fraudulent ad activities will plague the industry for years to come. However, you can protect yourself by utilizing TargetVideo’s state-of-the-art feature — the ad fraud detection solution.

TargetVideo Ad Fraud Detection ensures you will be safeguarded from ad fraud proactively. Namely, our system will detect our fraudulent activities before an ad is served. We will spot any invalid traffic so you won’t get charged for it! This will save your revenue and you will continue to grow your business. Avoid the scenarios mentioned in our ad fraud examples!

Choose TargetVideo to host, manage, and monetize your video content, and remove any danger from ad fraud!