ReverseAds Blog

How to Stop Click Fraud

May 12, 2021How to Stop Click Fraud

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The search ad industry is built on a model that derives prices from the number of clicks and impressions that are generated. This is the origin of the term “cost-per-click” or CPC, which is applied to instances in which an advertiser pays a specific cost to a publisher every time that an ad is clicked on. In theory, this process reduces unnecessary costs associated with ads, as you are only paying when someone actually clicks on an advertisement. In reality, this model has become extremely outdated and costly.

The traditional CPC model leaves businesses relying on publishers for clicks from actual buyers, when many clicks never lead to a conversion. The reason for this is a combination of click fraud and accidental clicks. Google themselves openly admit that 50% of mobile ad clicks are accidental, which means at least half of the clicks that are purchased are a complete waste of money. Meanwhile, 36% of display ad clicks are fraudulent or invalid.

Who is Benefitting from Click Fraud?

Click fraud has become a significant issue within pay-per-click advertising, with 78% of marketers citing it as a primary concern. In 2020 alone, this practice cost businesses nearly $23 billion in ad revenue and this number could increase by 50% every year.

Fraudulent actors are constantly looking for new methods to turn a profit. For example, when an auto-clicker, automated script, or computer program imitates a user, they can subsequently click on an ad without expressing any legitimate interest in the product or service being advertised. While businesses lose money to fraudulent clicks, advertising networks reap the rewards as the money being generated with each click is still being paid out by the business. This is why some believe that this model incentivizes click fraud, as revenue is shared between advertisers and networks.

Some of the biggest advertising networks function as publishers as well, which creates a potential conflict of interest. While money is lost to undetected click fraud, more money is made upon the collection of advertising fees, which results in short-term profits for these massive corporations. This leads to an average of 20% of ad budgets being wasted on undetected fraudulent clicks.

Is There a Solution?

While industry leaders have made progress in click-fraud detection techniques, there are still serious flaws in the current model that are left unaccounted for. While these leaders attempt to sort out short-term solutions for an industry-wide problem, we have been focused on long term solutions through innovative technologies such as blockchain.

click fraud preventionInstead of CPC advertising, ReverseAds has built an entirely new model around “Pay per Considered Visitor”. By developing a blockchain and distributed ledger solution, we provide businesses with 100% validated reporting and privacy protection. Most people probably know about blockchain through the emergence of cryptocurrencies like Bitcoin and Ethereum. However, this technology has far more applications than just currency and ReverseAds believes that it will be a significant tool in the battle against click fraud.

The essence of blockchain technology is the open ledger system, which allows for previously unrealized transparency of transactions. Every transaction is accounted for, with every party being made accountable, leaving little room for mistakes or abuse. Within advertising, this allows for the identification of traffic and breakdown of ad spend. So, if a significant percentage of traffic is originating from a location outside of your target geography or demographic, you can quickly identify it.

Blockchain allows for decentralized advertising, which eliminates reliance on centralized systems that act as middlemen between you and your customers. Ultimately, a decentralized model eliminates click fraud in four specific ways…

  1. Verification

    A transparent open ledger model makes it possible to verify that every unique advertisement was served to the right person at the right time. This can be utilized by both the advertiser and the publisher, as the source of every impression can be confirmed that it originated from an authorized domain.

  2. Transparency

    A major benefit of blockchain is the extreme transparency that it provides in regard to ad campaign performance. All applicable metrics from views to engagement rates to precision of targeting can be tracked.

  3. Privacy

    Transactional data on the blockchain can only be accessed with a unique key, which eliminates points of failure and keeps data secure. The result is much more control over personal data so that users can feel confident in the privacy of their information instead of sacrificing it to cloud service providers.

  4. Transaction Accountability

    The use of a distributed ledger ensures that every transaction is documented and ad exchanges are held accountable. This makes it easy for advertisers to know exactly how their budget is being spent, which brings more trust to the relationship with networks and third-party providers.

The ReverseAds Guarantee

ReverseAds ensures that your brand eliminates overspending on ad campaigns and improves targeting accuracy by eliminating fraudulent clicks. We are so confident in our assignment algorithm that we only charge for customers that reach the consideration point.

Through our Cost-Per-Consideration-Point (CPCP) model and blockchain technology, businesses can rest easy knowing that they aren’t throwing money at fake clicks and are paying for truly considered clicks only when users spend longer than 20 seconds on your website, visit three pages or reach 100% scroll depth with every campaign that you run with us.

Start buying traffic with high conversion potential, email to find out more about our exclusive CPCP pricing model, the first in digital advertising history.

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