Ad fraud: Criminal bots rinse companies out of £700k a year

Jan 21, 2021 | Ad tech, Online advertising, Regulation

Ad fraud: Criminal bots rinse companies out of £700k a year
Criminals are defrauding advertisers out of their ad spend, with brands losing up to $700k a year and agencies losing $200k a year to criminal gangs using bots for fake clicks, according to new research.

PPC Protect launched its annual Global PPC Click Fraud Report which examined over 1 billion ad clicks to uncover the sheer global impact this fraudulent activity has on businesses of every size – accounting for between £14,000 and £700,000 per year lost to each business.

As fake clicks grow, PPC Protect raises £2m to invest in its click fraud protection solution

• 11% of all search clicks are fraudulent, whilst for connected TV campaigns this rises to 17%, and to 36% on display campaigns
• SMEs risk losing £14k per year and enterprises risk losing up to £700K per year due to click fraud from online advertising
• PPC Protect has raised £2M in an oversubscribed seed round led by Fuel Ventures as it ramps up its Automated Real Time Click Fraud Protection solution to continue to provide the best protection for businesses online spend

As the world changed in 2020 and consumer priorities shifted to homeschooling, one’s health and eCommerce, fraud schemes and criminal gangs adapted and ramped up their efforts to defraud businesses of nearly £25billion1 lost through click fraud in 2020.

With people turning to online ads to save and even boost sales as the highstreet remained shuttered for most of the year, fraudsters have been rinsing businesses of tens and hundreds of thousands pounds a year with fake clicks.

PPC Protect’s report found online display ads were most susceptible to this crime with over a third of clicks either fraudulent or invalid. The report also found 11% of search clicks and 17% of clicks associated with connected TV campaigns were fraudulent.

Recognized as the industry leading click fraud prevention solution for paid search advertisers, PPC Protect handled more than one billion ad interactions in the last 12 months. As it continues to lead the fight against click fraud, it has recently closed its oversubscribed £2m seed round, led by Fuel Ventures to expand into new geographies and territories.

With its low-risk nature, criminal gangs are attracted to click fraud and PPC Protect found that 38% of fraudulent activity are through automated bots and bot fraud. Criminal gangs are investing heavily in sophisticated bots to do their dirty work without having to lift a finger. Not only does this allow them to scale their activity but it allows them to do it on autopilot.

PPC Protect also found a significant impact that Covid has had on online advertising fraud. With parents and teachers faced with home learning, the educational industry upped their spend on online advertising, which fueled a rise in fraudulent activity and payouts for click-fraudsters. PPC Protect found that as a result education saw the highest rates of click fraud with 31% of clicks being invalid. PPC Protect also found healthcare also hit hard as click fraud grew by 53% for healthcare advertisers. 2020 also saw losses in the travel market reduced 21% due to the market shrinking significantly, demonstrating that criminals are following market trends in order to make their activities payout in a huge way.

Neil Andrew, founder and CEO of PPC Protect said, “Despite the impact of Covid-19, digital ad spend still increased 2.4% in 2020 to a record $332bn2 as consumers turn to the web in their masses to stay informed, in touch and entertained. For fraudsters this is like shooting fish in a barrel. With little effort they can defraud small, independent businesses relying on online ad spend to increase their presences out of tens of thousands pounds a year. We are handling huge volumes of ad traffic to make sure these businesses are protected and with this new investment we can explore how our solution stays one step ahead of more sophisticated ad fraud tactics and expand internationally.”

Mark Pearson, founder and managing partner of Fuel Ventures added, “Neil and the PPC Protect team are at the frontline of the click fraud prevention space and built the first truly automated cybersecurity-driven fraud detection engine that stops bad traffic and fake clicks. They are a security-first not adtech-first firm and their priority on keeping businesses safe is paramount. We are excited to be backing this innovative company with excellent leadership.”

The full report by PPC Protect can be downloaded here

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