What is Ad Fraud and How to Prevent It

Advertising (ad) fraud has become a silent, costly menace that has drained billions from marketing budgets and undermined the effectiveness and metrics of online campaigns. From fake clicks to bot-driven impressions, malicious actors have developed sophisticated schemes to threaten brand reputation, reduce ROI, and create compliance risks.

For C-suites, SOC analysts, marketing leaders, and compliance professionals, the stakes are high. Manual detection methods are often inefficient, leaving organizations vulnerable. Without a proactive ad fraud prevention strategy, businesses may lose critical marketing dollars, damage brand trust, and face compliance challenges.

We created this guide for organizations to learn more about advertising fraud—what is digital ad fraud, how ad scams work, and why it’s an escalating concern. Plus, we’ll provide actionable strategies to identify and prevent ad fraud while protecting investments.

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What is Ad Fraud and How to Prevent it

Curious about what is ad fraud? Ad fraud is a deceptive practice where threat actors manipulate digital ad systems to generate fake traffic, clicks, impressions, or conversions. These fraudulent actions are often carried out through bots, click farms, or domain spoofing to drain advertisers' money without delivering real engagement or value. As a result, businesses end up paying for fake interactions rather than real customer intent, leading to wasted marketing budgets, skewed campaign metrics, and less-than-optimal digital strategies.

According to Business of Apps, $62 million out of $407 million advertising spend per user was wasted due to digital ad fraud, which represented 15% of the total spend in the United States alone. On top of that, a Forbes article predicted digital ad spend waste to increase to $172 billion by 2028. This provides just a little glimpse of how much marketing funds can be drained from digital ad fraud.

By establishing clear KPIs, monitoring ad performance for unusual spikes, and working with trusted third-party fraud prevention providers, organizations can strengthen their defenses against ad fraud and maintain brand integrity.

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What Are Paid Ad Scams and How Do They Work?

Paid ad scams are designed to exploit digital advertising platforms by generating fake engagement, misleading consumers, or stealing advertising budgets. Paid ad scams are executed by cyber criminals through bot networks, click farms, and malicious websites that mimic user behavior.

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By infiltrating legitimate ad exchanges and platforms, they manipulate bidding systems and create fraudulent conversions that mislead businesses into thinking their campaigns are real and successful. As a result, brands end up paying for traffic that leads to fake engagement.

Types of Ad Fraud in Digital Advertising

Ad fraud may come in many forms, but all are designed to exploit digital advertising systems for financial gain. Some of the most common types include:

1. Click fraud: Bots or fraudulent users repeatedly click on ads to drain an ad’s budget.
2. Ad stacking: Multiple ads are layered to charge for impressions that users won’t see.
3. Impression fraud: Fake views are generated to inflate ad metrics artificially.
4. Domain spoofing: Low-quality websites are disguised as premium sites to trick advertisers into paying for high-rate placements.
5. Install fraud: Fraudulent app downloads or engagements, like Vapor, are generated to claim attribution and payouts in mobile advertising.

Digital Channels at Risk of Paid Ad Scams

Paid ad scams can occur across various digital platforms, but some channels are more vulnerable to risk than others due to their scale, automation, and reliance on programmatic advertising.

Here are a few digital channels at risk of paid ad scams:

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The Risks and Impact of Ad Fraud on Your Business

Ad fraud poses significant business risks, leading to financial losses, distorted marketing data, and reputational damage. Sadly, many companies invest heavily in digital advertising to drive brand awareness, generate leads, and increase sales, but ad fraud degrades these investments by delivering fake impressions, clicks, and conversions.

Financial Loss

Ad scams contribute to wasteful spending, which not only reduces return on investment (ROI) but also limits the effectiveness of future campaigns, making it harder to optimize strategies and allocate budgets effectively.

Brand Reputation Damage

If ads appear on fraudulent or low-quality websites, businesses risk being associated with harmful or inappropriate content, which can damage their credibility and customer trust. It can also ultimately impact their long-term profits due to their negative reputation.

Legal and Compliance Risks

Companies that fall for fraudulent ad schemes may accidentally violate advertising and data protection laws, leading to fines and lawsuits due to false reporting. Additionally, advertisements placed on low-quality or malicious sites can lead to legal liability if associated with illegal content or consumer deception.

To minimize risks, businesses must comply with advertising data protection regulations such as:

• General Data Protection Regulation (GDPR): Regulates data privacy and requires user consent and transparency in ad tracking
• California Consumer Privacy Act (CCPA): Protects consumer data and holds businesses accountable for how personal information can be used
• Federal Trade Commission (FTC) Advertising Guidelines: Prohibits deceptive advertising practices such as fraud impressions and misleading placements
• Digital Services Act (DSA): Applies strict rules on ad transparency and accountability for ad-hosting platforms
• Children’s Online Privacy Protection Act (COPPA): Regulates data collection and advertising practices as it applies to minors

Without proactive fraud detection measures and brand protection solutions, companies leave themselves vulnerable to ongoing scams that drain resources, distort campaign effectiveness, and expose them to regulatory scrutiny.

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How to Protect Your Organization Against Paid Ad Scams

For organizations to prevent paid ad scams, they need to stay informed about the latest fraud tactics and continuously audit their advertising budget and metrics. By taking a proactive approach, companies can protect their ad investments and maximize the effectiveness of their digital marketing efforts.

Below are a few actionable steps organizations can take today to stay on top of paid ad scams:

1. Use Ad Fraud Detection Tools

Investing in AI-powered fraud detection tools and social engineering defense platforms, like Doppel Vision, empowers businesses to identify ad scams early, preventing waste and reducing exposure. These advanced tools actively eliminate fraudulent ads, protecting brands and ensuring their audience encounters only authentic content.

2. Implement Robust Ad Monitoring Systems

Recognizing ad fraud tactics requires careful and continuous campaign performance monitoring to detect anomalies. Unusual spikes in impressions or clicks, low engagement rates despite high traffic, and suspicious patterns—such as excessive activity from a single IP or region—can indicate fraud. With real-time monitoring, organizations can track these correlations and take immediate action.

3. Partner with Trusted Ad Networks

Working with reliable ad networks that prioritize transparency and fraud prevention can significantly reduce the risk of fraudulent ads. When choosing an ad network, organizations should ensure they employ strict verification processes and that the ad placements are legitimate for high-quality engagement.

4. Conduct Regular Audits of Ad Campaigns

Running routine audits and analyzing campaign performance for red flags helps organizations verify ads are displayed correctly without compromise. Regularly reviewing ad placements, engagement metrics, and traffic sources can quickly unveil discrepancies where fraud may be at play.

5. Educate Employees and Teams

Training employees on how to recognize and prevent ad scams is critical. Humans are often a downfall in security, but by educating all employees on fraud tactics and warning signs, they can detect and report suspicious activity.

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How Doppel Protects Your Business from Ad Fraud

At Doppel, we provide the necessary tools and expertise to prevent ad fraud and protect your vital channels. Through our powerful platform and our custom brand protection strategy, we ensure your ads stay authentic and your brand is respected. From Google, Bing, and Facebook, our paid ads protection monitors all major ad networks, while detecting and removing fraudulent ads.

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Safeguard Your Business from Paid Ad Fraud

Protect your organization from ad fraud and discover how Doppel’s digital risk protection covers you from ads, URLs, Crypto, social media, and all the way to eCommerce platforms. Whatever the digital platform, Doppel tailors a solution to meet your unique business needs.

‍Book your customized demo today to learn how to protect your brand reputation, make the most of your ROI, and automate fraud detection.