It’s been a turbulent year, especially when it comes to ad fraud and click fraud. In fact, 2020 looks like it’s a bumper year for digital fraud online in general.
Although the year isn’t over yet, a report from Cheq estimates that click fraud has cost marketers at least $35 billion in 2020, with potential for that to rise to closer to $40 billion.
So what has happened with click fraud in 2020, and what does the future look like?
A 2020 click fraud retrospective
At the beginning of the year, research from the University of Baltimore estimated that click fraud and ad fraud would cost advertisers at least $24 billion. Of course no one could see the disruption that Covid-19 was about to unleash, including hackers and fraudsters. But these click fraud lowlights sum up the state of digital fraud in 2020.
In February 2020 it was revealed that the long running 404Bot has generated at least 1.5 billion fraudulent impressions on video ads. First spotted in early 2019, it’s thought that 404Bot first started some time in 2018. Since then, 404 Bot has been committing ad fraud fairly consistently, with several activity peaks in 2020.
Then, in March 2020, Tekya, a member of the Haken malware family, was found to have been downloaded at least 50,000 times. Tekya is designed to commit mobile ad fraud, mostly on in-app ad banners.
Most of the offering apps were removed from the Google Play Store in February and March 2020, however a second round of Tekya infected apps was discovered in June 2020, highlighting just how hard it is to stay ahead of the fraudsters.
Apple users thinking that their platform is less open to fraud, think again. In August, an SDK distributed by Mintegral was found to be responsible for enabling the SourMint malware to proliferate on the Apple ecosystem.
Capable of click fraud, data theft and spying, SourMint was thought to have been downloaded millions of times, infecting around 1200 apps.
Apple actually denied the extent of the problem, and have taken no steps to remove the supposedly affected apps from their store.
Fraud legal and court cases
Among all this chaos, we’ve also seen some high profile legal action against fraudulent operators.
A class action lawsuit against Google by Californian businessman Gurminder Singh has been allowed to continue as of September 2020. Singh alleges that Google overstates the effectiveness of it’s click fraud prevention software and that his own ad campaigns were subject to higher than expected levels of non-genuine (bot) traffic.
And in April 2020, a Las Vegas based golfing supply company Motogolf, sued a competitor Top Shelf Golf for alleged ad click fraud. The case states that Motogolf lost both $5000 in ad spend, as well as valuable demographic information about their customers due to distorted data. The case is ongoing as of late 2020.
The future of click fraud? Looking to 2021
There have been all manner of global disruptions in 2020, from the Coronavirus pandemic to the American elections and civil unrest around the world. It’s a safe bet that 2021 will see more changes, and plenty of opportunity for fraudsters to capitalise on.
As with any global disruption, fraudsters often take advantage of the situation by targeting the trending terms and playing on people’s worries. In fact, it’s even estimated that the US election lost $377 million to ad fraud.
It’s not just click fraud that has had a busy 2020. We’ve also seen record volumes of data breaches and ransomware attacks, with cyber fraud across the board on the up. Click fraud and ad fraud have seen year on year increases consistently, and it looks like click fraud in 2021 will be no different.
For businesses and digital marketers, paid search and social are indispensable tools but remain open to fraud. So far industry wide initiatives have not proven effective, with independent click fraud prevention software still the best way to stop fraudulent clicks.
The fact remains that digital fraud and cyber attacks are big money for savvy operators, and globally we’re nowhere near closing down these threats.
What can marketers do?
Although the major platforms do have some measures in place to prevent click fraud and ad fraud, you can be forgiven for thinking more should be done. And with few industry wide measures to prevent fraud on paid links, it remains down to individual businesses and marketers to take their own steps to avoid fraud.
Check out our free trial to get a look at the volume of fraud on your paid links.