In the digital-first world that we live in today, every click counts, yet an alarming number of those clicks are worthless. As brands increasingly turn to data-driven strategies, the stark reality of ad spend wastage looms larger than ever. A report by Lunio revealed that 1 in every 11.7 paid traffic website visits needed to be validated. With $71.37 billion in ad spending forecasted to be lost to IVT in 2024, the implications of ad inefficiency stretch far beyond mere financial drains. “The financial impact of IVT is substantial. Industry estimates suggest that billions of dollars are lost annually due to invalid traffic. This not only affects advertisers’ bottom lines but also erodes trust in the digital advertising ecosystem,” Gopa Menon, chief growth officer – APAC, Successive Technologies, told BrandWagon Online. As marketers pour money into campaigns that fail to connect with genuine audiences, the consequences include diminished credibility and reduced consumer trust. In a world where advertising effectiveness is paramount, the question remains: how can advertisers safeguard themselves against the rampant issue of invalid traffic?
What is Invalid Traffic?
Invalid traffic (IVT) refers to any website visits that don’t come from a real person with genuine interest. It can include bots (both good and bad), fake users, misattributed accidental clicks, malicious clicks from competing advertisers, and otherwise invalid visitors that have zero chance of converting to customers, the report mentioned. IVT encompasses non-human interactions with digital ads that do not result in legitimate engagement or conversions. It can be categorised into two primary types: fraudulent traffic, generated by malicious entities, and general invalid traffic, which includes non-fraudulent interactions like accidental clicks or unintentional impressions. Accidental clicks can occur when users mistakenly interact with ads, or when ads are displayed on irrelevant sites, leading to a false impression of engagement.
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“Ad fraud is often referred to as invalid traffic. IVT is a broad term that describes an online activity that does not always come from a real user; therefore, the impressions do not represent legitimate advertising consumption. Ad fraud continues to be costly, with advertisers losing billions annually due to fraudulent activities such as non-human traffic, click fraud and impression fraud,” Scott Pierce, head of fraud protection, Integral Ad Science, said.
Juniper Research reports that ad fraud accounted for $84 billion in lost ad spend in 2023, projected to skyrocket to $172 billion by 2028. IVT poses a significant threat to small businesses, depleting limited budgets, reducing return on investment (ROI), and curbing customer engagement opportunities.
The distortion of ad performance statistics due to IVT has serious financial repercussions for advertisers. When examining the staggering 2.6 billion clicks, a striking contrast emerged between Google and non-Google channels. The data revealed that invalid traffic (IVT) rates were significantly lower on Google channels, with only 5.5% of traffic classified as invalid. In stark contrast, a concerning 17.5% of traffic from non-Google channels fell into the invalid category. Specific industries, such as e-commerce and travel, are particularly affected, with the e-commerce sector reportedly losing over $15 billion to IVT in 2023. Given this context, how can companies ensure that their marketing dollars are effectively utilised rather than funnelled into the abyss of invalid traffic?
Furthermore, IVT can be classified into two categories, general invalid traffic and sophisticated invalid traffic.. “General Invalid Traffic (GIVT) often originates from legitimate sources but does not represent genuine human interaction with ads. Common examples of GIVT include search engine crawlers, which are bots that index web pages for search engines, and data centre traffic, which stems from data centres and is frequently used for server maintenance or testing purposes. Additionally, accidental clicks can also fall under GIVT; these are unintentional clicks on ads that occur due to poor ad placement or user interface design,” Menon added. Invalid traffic rates vary significantly by channel, with LinkedIn showing the highest rate at 24.64%, followed by Google Video Partners at 24.55%, and X (formerly Twitter) at 23.61%. Platforms like YouTube and Google Search perform better, with IVT rates of 3.93% and 4.72%, respectively. By industry, sectors like insurance (21.55%) and retail (19.02%) are most affected by IVT, the report revealed.
On the other hand, Sophisticated Invalid Traffic (SIVT) is more malicious and is intentionally designed to defraud advertisers. This category includes bot traffic, generated by automated bots that mimic human behaviour, such as clicking on ads or visiting websites. Other forms of SIVT involve ad stacking, where multiple ads are placed on top of each other, causing only the top ad to be visible while impressions are counted for all. Domain spoofing is another tactic, where falsified website information is used to create the illusion of a reputable or high-traffic site. Additionally, click farms—groups of individuals paid to click on ads, often from low-quality websites—also contribute to SIVT. The impact of IVT on advertising metrics can be significant. It can inflate impressions and clicks, creating a misleading perception of ad performance. Furthermore, IVT distorts key metrics like click-through rate (CTR), conversion rate, and cost-per-click (CPC), making it challenging for advertisers to assess campaign effectiveness accurately. Ultimately, this results in wasted ad spend, as advertisers end up paying for impressions and clicks that do not originate from real users, leading to a misallocation of their advertising budgets.
When it comes to businesses, smaller businesses may be more affected by ad spending being wasted in invalid traffic. “Regardless of invalid traffic (IVT), small businesses may see some returns, but with lesser impact. Budgets for small businesses are usually more restrictive, giving them less flexibility to absorb losses from ad fraud. In the case of IVT, this often results in no returns. However, larger companies are better equipped to combat such issues, as their capital allows them to invest in expensive detection hardware and dedicated teams,” Hariom Seth, founder, Tagglabs, added.
Moreover, when ad spending is wasted on invalid traffic, it leads to inefficiency in overall marketing strategies. Advertisers typically design campaigns to achieve specific goals, whether it’s brand awareness, lead generation, or direct sales. However, IVT inflates key performance indicators (KPIs), such as impressions, clicks, and engagement rates, without delivering any real value. This misrepresentation can cause brands to invest further in underperforming channels or tactics, eroding their overall marketing effectiveness.
Moreover, IVT diminishes RoI. For brands spending millions on programmatic advertising, even a small percentage of invalid traffic can lead to substantial losses. When ad dollars are wasted, there’s less room for genuine customer engagement and fewer resources available to experiment with new platforms or creative strategies.
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Fake versus real
One of the key challenges advertisers face is differentiating between legitimate and invalid traffic. Programmatic ad buying, which relies on automated processes to place ads across various platforms, makes it difficult to vet traffic quality in real-time. Advertisers need sophisticated tools and strategies to discern which traffic sources are legitimate and which are inflated by bots or other fraudulent means. “Advertisers can differentiate between legitimate and IVT by leveraging advanced tools and strategies to detect fraudulent activities. These include using machine learning algorithms, partnering with trusted ad verification vendors, and analysing traffic patterns for unusual behaviour, such as abnormally high click-through rates or short session durations. Advertisers should regularly audit their traffic sources and avoid placements on low-quality or MFA sites. Proactive use of fraud prevention technologies helps ensure ad spend reaches real users, maximising campaign effectiveness and ROI,” Pierce added.
Ad verification platforms play a vital role in this process, helping brands identify discrepancies in traffic patterns. These tools analyse data such as user behaviour, click patterns, and site engagement to flag suspicious activities. However, even with verification tools, it’s difficult to eliminate all instances of IVT, and the technology must continually evolve to keep pace with increasingly sophisticated fraud tactics.
IVT can significantly damage brand safety and consumer trust in several ways. “For instance, SIVT can result in ads being displayed on unsafe or fraudulent websites associated with malware, hate speech, or other inappropriate content, which ultimately harms a brand’s reputation,” Menon said. Additionally, inflated metrics caused by IVT can create a false sense of campaign success, misleading advertisers and potentially eroding their trust in digital advertising. Moreover, IVT can contribute to a negative user experience, manifesting as intrusive ads or slow loading times that lead to frustration and growing distrust in online advertising. Collectively, these factors underscore the urgent need for advertisers to address IVT to maintain brand integrity and consumer confidence.
Are programmatic ads the weakest?
Programmatic ad networks and exchanges are particularly susceptible to IVT due to their automated nature. While automation offers efficiency and scale, it also creates opportunities for fraudsters to exploit the system. Some of the most common loopholes include the use of botnets to generate fake clicks, ad stacking, and domain spoofing. These vulnerabilities highlight the need for increased oversight and stricter regulations in the digital advertising ecosystem. Advertisers need to be cautious about the partners they work with and ensure that they’re not inadvertently supporting fraudulent traffic.
“In a complex ecosystem with multiple intermediaries—such as demand-side platforms (DSPs), supply-side platforms (SSPs), and ad exchanges—it becomes difficult for advertisers to trace their ads’ placement. Fraudsters take advantage of this opacity by injecting IVT, fake impressions, or bot activity into the ad supply chain. Advertisers can inadvertently purchase fraudulent or low-quality traffic without clear visibility into each step, wasting ad spend and reducing campaign effectiveness,” Pierce commented.
How to combat IVT?
To combat IVT, companies are adopting various solutions, such as employing ad verification tools, collaborating with trusted programmatic partners, and implementing strict traffic filtering protocols. “Advertisers should take a multi-faceted approach. Partnering with reputable ad networks and publishers is crucial, as trusted partners typically have strong IVT prevention measures in place,” Pierce added. Additionally, implementing sophisticated IVT detection and prevention tools can help identify and filter out invalid traffic. Regularly monitoring traffic sources and analysing user behaviour patterns allows advertisers to detect anomalies that may indicate fraud. Furthermore, adopting robust fraud prevention measures, such as ad verification, pre-bid filtering, and post-bid analysis, can significantly mitigate the risks associated with IVT. Lastly, staying informed about the latest IVT trends and techniques will enable advertisers to proactively protect their campaigns and ensure their ad spend is utilised effectively.
To minimise the risk of IVT, advertisers should adopt a proactive approach. This includes setting up robust fraud detection mechanisms, regularly reviewing traffic sources, and working with transparent ad networks that offer detailed reporting. Advertisers should also avoid overly relying on low-cost, high-volume traffic sources, as these are often breeding grounds for fraudulent activity.
The long-term impact of IVT goes beyond financial losses. When a brand is associated with fraudulent traffic, it risks damaging its reputation among consumers and industry partners. Customers expect brands to engage with them in meaningful ways, and if they discover that a brand’s advertising is being wasted on bots, trust can erode. Additionally, IVT can distort a brand’s customer data, leading to misinformed decisions that affect product development, customer service, and overall brand positioning. In a digital age where consumer trust is hard to build and easy to lose, minimising IVT is critical for maintaining a positive brand reputation.
