There’s more than an extra day to look forward to in 2024: new episodes of our favorite shows, a total solar eclipse, the Summer Olympics in Paris, and the U.S. presidential election, just to name a few.

Still, there’s another thing we don’t look forward to but expect to see this year: an increase in ad fraud. Last year, the advertising industry lost $125 billion to ad fraud; with digital ad budgets continuing to grow this year, it’s reasonable to expect that figure to go even higher in 2024.

Fraudsters will continue to rely on their old tricks, but a new year also brings new threats. Advertisers must stay apprised of all the risks to protect their budgets, bottom line, and brand reputation.

We’ll delve into the emerging challenges and some of the usual suspects, as well as signs to watch for and how you can stop ad fraud and its damaging effects beyond wasted ad spend.

What Ad Fraud Threats Will We See in 2024?

Pixel stuffing, ad stacking, spoofing, masking… Digital marketers may be familiar with these common types of ad fraud, and we don’t expect them to go away in 2024 or the foreseeable future. But you may not be as familiar with newer threats on the horizon, and there’s really no end to what’s lurking out there. So, for now, we’ll focus on those you can count on one hand.

1.      Artificial Intelligence (AI). Many advertisers use AI to improve ad targeting, create content, or offer online chat features. AI can make marketers’ lives easier; it also makes it easier for fraudsters to commit all types of ad fraud.

While marketers use ChatGPT to write copy and research their target audience, fraudsters use its dark web cousin, FraudGPT, to create fake content, fake advertisers, fake clicks, fake inventory, test stolen credit card numbers, and so on. The more AI is used, the more it learns. Unfortunately, FraudGPT learns fast and understands context, helping it generate fake ads that are realistic enough to convince users to click on them.

2.      Residential Proxy Attacks. Residential proxies allow fraudsters to route traffic through a real person’s network by “borrowing” their IP address, which allows them to disguise themselves as that person. By using these residential IPs, fraudsters can click on ads, scrape data, fill out forms, and commit fraud of all kinds while remaining anonymous.

Services such as SmartProxy, LunaProxy, StormProxies, and more sell access to these legitimate, residential IP addresses. While residential proxies can be used for legitimate purposes such as ad placement and cybersecurity penetration tests, fraudsters can then use them to disguise their identity and location so they can bypass ID address blockers and get paid to click on ads or fill out forms.

3.      Human Fraud Farms. Sure, bots can act like humans and commit ad fraud. But humans are even better at behaving like humans. That’s why fraudsters hire them at low cost and in large numbers, known as human fraud farms, to bypass CAPTCHAs, fill out forms with real names and contact information, and interact with the website to avoid detection. Human fraud farms are becoming more sophisticated, accounting for even more malicious activity.

4.      Inferior Fraud Solutions. Just because you have an ad fraud solution doesn’t mean you’re completely protected against ad fraud. To begin with, the barrier to entry is low. Many detect basic bots by attempting to block IP addresses, but it’s rare for an IP address to be used for the sole purpose of fraud.  Blocking by IP address can and will block real people by mistake. Think of an IP address belonging to a Starbucks location, a school, a convention center, or even a cell tower. How many people might share that same IP?

Using an inferior solution may be worse than using none at all because it can also provide a false sense of security. If the solution in place cannot detect and stop sophisticated invalid traffic, you likely still have ad fraud going undetected—draining your budget and wasting your time.

There are about a hundred ad fraud detection providers in the market, with new ones popping up every day. Out of all of them, only eight are third-party certified to follow industry standards set by the Media Rating Council (MRC) or are not just verified but also certified by the Trustworthy Accountability Group (TAG). Using an ad fraud solution that is MRC-accredited or TAG Certified Against Fraud is so important that Responsible Enterprises Against Consumer Harassment (R.E.A.C.H.) makes it a requirement.

5.      Regulatory Changes. If you haven’t heard, the FCC decided to “close the lead generation loophole.” It’s imperative that you understand the new regulations, from what actions your company needs to take to be compliant, to the impact they will have on your marketing efforts and your business’s bottom line.

You can find the latest news on the ever-evolving regulatory environment and other valuable resources at REACHmbc.com and TCPAWorld.com. While you likely have 12 months to comply with the recent changes, you’ll want to start as soon as possible so you have time to vet new partners and test new technologies and processes.

How Will I Know If These Threats Are Affecting My Ad Campaigns?

There are signs to look for that can indicate ad fraud in general, and some of these signs can indicate the type of threat. Lots of traffic with few conversions is an umbrella sign that you have ad fraud, but when you dig a little deeper, you may notice some subtle differences that can help identify the threat.

If you notice a surge of traffic from one or more sources with few or no conversions, AI is likely behind the threat. AI can be used to generate a lot of fraudulent traffic in a short period of time. Early on, that can make it seem like your campaign is working, but then the generated leads don’t convert—because they aren’t real.

If you detect similar behavioral characteristics from traffic that isn’t converting, fraudsters may be using residential proxies to mask their IP address. IP blockers may not stop these fraudsters, but they can block real consumers who use a VPN for security reasons, such as using public wi-fi. According to a study by security.org, 46% of Americans use VPNs; if you’re blocking a VPN’s IP address, you’re also blocking legitimate customers using the same VPN.

If you see a pattern of plenty of traffic but few or no conversions, despite having an ad fraud solution in place, that ad fraud “solution” is not working for you. Another indication is a high number of false positives. On average, other ad fraud solutions mark approximately 15% of legitimate traffic as fraud; this lowers your conversion rate and causes you to miss out on new revenue. This average false-positive rate then tosses out around 4% of your good traffic. If you think of a campaign that spends $100,000, an inferior fraud solution could cause you a loss of $4,000. It is vital to thoroughly test a vendor and make sure you agree with their findings before allowing it to dictate your marketing budget.

It’s always worth a conversation with your provider to determine what the exact issues are and how, or if, they can be resolved for your situation. But it also may be time to check out other ad fraud solutions that can accurately stop it in real time.

How Do I Find An Ad Fraud Solution That Works Best For My Company?

Finding the right solution to prevent ad fraud can seem overwhelming. You can start by asking your network what solution they use and how they’re performing. Another way to quickly narrow down your choices is to look for partners who are TAG Certified Against Fraud, as Anura is, or are accredited by MRC. This cuts the list down to fewer than ten potential partners.

Next, you will want to talk to and evaluate a few of those to see which one best fits your needs.

Here at Anura, we offer a fully functional, 15-day free trial. During this time, we’ll review your data to identify the level of fraud you currently have, as well as pinpoint exactly where the fraud is coming from. We’ll walk you through our user-friendly dashboard that allows you to customize the information you see to make the best decisions for your campaigns and your company.

How do we detect ad fraud with 99.999% accuracy? You might say we fight fire with fire, using machine learning, combined with experience and human expertise, to constantly learn about, identify, and block new threats. Our analytics also allow you to identify where your best traffic is coming from so you can shift your ad strategy to deliver solid results.

You may think your current solution is working just fine, or you are blissfully unaware that you even have an ad fraud problem. Just know that when you run digital ad campaigns, it’s not a matter of IF you have fraud, but HOW MUCH fraud do you have? It’s time to take proactive steps to protect your budget and your brand.

How did Anura detect more than 200% of fraud overlooked by a major ad fraud solution? Download our case study!