Big Faces, Big Spend, Low ROI: Why Ad Fraud is Increasingly Damaging Brands

Brands are increasingly seen to be employing familiar and expensive faces to ambassador ad campaigns and new products. However, with an estimated 26% of ad spend lost to ad fraud, businesses are wasting big money on big faces instead of targeting pain points.

Simply put, you can’t get the ROI you deserve if you aren’t protecting budgets when investing heavily in famous faces.

The disconnect between big brand campaigns and the realities of digital marketing in the AI-era is growing unmanageable. Too many companies are spending big on building brands but not seeing that turn into new users, customers, or ROI.

In a 2023 Statista survey, 26% of respondents said they spend more than 40% of their marketing budget on influencer marketing. With companies spending such an enormous chunk of their profits on marketing products through famous faces, they must be implementing rock-solid fraud protections to keep hold of that hard-earned cash, right? Wrong.

The Risk in Advertising

A report published by Juniper Research reveals 22% of all digital advertising spend in 2023 was attributed to fraud, which is a huge $84 billion. If nothing is done to halt fraudsters, the trend will continue and is projected to reach $172 billion by 2028.

In today’s tough economic landscape, businesses must maximize the impact of every click. They can no longer take for granted that all traffic from their pay-per-click (PPC) campaigns or new AI-based ads comes from genuine leads. The increasing prevalence of fraudulent traffic is undermining campaign effectiveness and causing significant revenue losses. As consumers become more cautious with their spending, it is crucial for advertisers to connect with real potential customers and avoid wasting their budgets on hefty influencer costs.

Invalid traffic (IVT) and ad fraud can severely affect campaign ROI while creating the illusion of generating legitimate traffic. This situation is particularly frustrating for digital marketers, as they struggle to assess the quality of the traffic they attract. Meanwhile, fraudsters continue to exploit campaigns and distort traffic data.

With businesses putting more and more budget into influencer branding, ads are becoming heightened targets for fraudsters. However, instead of cutting budgets, organizations should delve deeper into analyzing the effectiveness and efficiency of their campaigns.

Unlocking Ad Potential

Before launching costly ad campaigns, organizations must evaluate their ad fraud protection services. Invalid traffic (IVT) is non-human traffic or traffic that doesn’t contribute to growth. Fraudsters exploit campaigns with IVT, often going unnoticed. AI-driven campaigns like Google’s Performance Max (PMax) aim to enhance marketing efficiency but struggle to identify fraudulent activity. AI assumes all user engagement is positive, allowing fraudsters to bypass detection and skew campaign data.

This unfiltered traffic undermines the effectiveness of campaigns like PMax, providing unreliable data that hampers organizational growth. IVT causes campaigns to optimize for fraudulent sources with no intention of converting, rather than legitimate ones. Consequently, marketers lose potential profit and misdirect future efforts, compounding losses over time.

Without proper traffic analysis, advertisers risk depleting their budgets unknowingly, diverting funds from more effective strategies such as influencer campaigns. By filtering out fraudulent activity, businesses can unlock the full potential of their digital ad campaigns and achieve increased revenue.

Protecting Campaign Profits

Return on Advertising Spend (ROAS) is crucial for assessing the success of paid campaigns, especially influencer-led ones. To maximize ROAS, it’s essential to optimize advertising budgets fully, making fraud prevention solutions critical.

Here are some steps to enhance preventative measures and achieve a higher ROI:

• Analyze and Optimize Campaign Traffic:Fraudsters use bots to generate IVT, which AI platforms struggle to detect. By leveraging analytics and reporting tools, organizations can spot irregular patterns caused by fraudulent activity. Exposing and blocking false engagement allows for better optimization of ad spend toward legitimate sources.
• Improve Audience Signals:Targeting the correct audience is vital for conversion success. Audience signals help identify appropriate groups based on behavior and demographics. Refining these signals by excluding IVT enables AI ad campaigns to tailor ads more effectively to the right audience.
• Enhance Initial Security Measures:Implementing security measures before launching costly ad campaigns ensures that advertising spend is directed towards attracting genuine customers and legitimate spenders.

Organizations can protect against fraudulent tactics by taking a proactive stance. The right solutions can enable real-time data scanning and identification of fraudulent engagement. This proactive approach allows organizations to counter fraud effectively and safeguard their investments, providing bigger budgets for bigger stars going forward.

Maximizing Campaign Value

The prevalence of influencer campaigns and the success they can achieve make them increasingly tempting targets for fraudsters. Bad actors are constantly evolving their methods to infiltrate systems undetected, and if it continues, marketing and advertising teams won’t be able to reap the full benefits of their campaigns.

There is time, however, to stop bad actors and preserve the integrity of campaigns. Taking an active stance against fraud will allow organizations to stop interference with their data, ultimately protecting their advertising budgets. This way, they can capture revenue in the long term with their attractive, fame-filled campaigns.

About the Author

Chad Kinlay, Chief Marketing Officer, TrafficGuard is a driven, open-minded, creative senior marketer with a strong sense of dedication and commitment. With over 15 years of progressive international experience in marketing and communications management, Kinlay has a credible history of commercial success.

Chad can be reached online at our company website https://www.trafficguard.ai