How click fraud has worsened in the wake of Covid-19

Stewart Boutcher, CTO and Data Lead at Beacon, examines how click fraud – which was already a serious threat to companies engaged in digital marketing prior to the pandemic – has worsened considerably in its wake. He seeks to provide a forecast on how the situation is likely to evolve overtime, and advice on what businesses can do to mitigate the risks.

In 2019, market research company, eMarketer, estimated that digital ad fraud was costing firms globally between US$6.5bn and $19bn every year.

While these figures are certainly concerning, the level of click fraud – one of the most common forms of ad fraud – is even more alarming and has worsened considerably as the world has battled the coronavirus pandemic.

This can largely be attributed to the Covid-19 crisis forcing many businesses to shift their advertising budgets to have a greater online focus, which has provided cybercriminals with a golden opportunity to carry out their illicit activity on a far greater scale.

For companies to understand the ever-growing threat that click fraud poses to them and the various measures they can take to mitigate the risk, it is first necessary to consider how the problem has been exacerbated over the last 18 months.

How the problem has grown

According to a recent industry report, 11% of all search clicks are now fraudulent, rising to 17% for connected TV campaigns and 36% for display advertising campaigns.

This increase coincided with the closure of many physical retail stores for a significant part of 2020, as limits on social contact were introduced in response to the pandemic.

Because conducting bot-led click fraud – the practice of using automated programs to steal clicks and divert traffic – is a low-risk crime, this gives scammers the confidence they need to invest heavily in increasingly sophisticated technology and expand their operations alongside growing web traffic.

Which sectors have been affected the most?

Some sectors have been far worse hit than others by click fraud in the wake of the pandemic.

For example, homeschooling became commonplace for many students during lockdown, and the consequential increase in ad spending resulted in the highest rate of click fraud taking place within the education sector, with nearly one-third of clicks disabled. 

The health and medical sector also experienced a 53% rise over 2019 levels of click fraud, according to the Search Engine Journal.

This is most likely due to the increase in businesses running campaigns for vitamins, face masks, antibody tests, and other Covid-related items, which has presented fraudsters with a lucrative opportunity to capitalise on.

Furthermore, separate industry research found that small businesses are at particular risk from click fraud.

The data, which included 78 and 1.8 billion clicks, concluded that that the rate of invalid clicks on global paid search campaigns conducted by the small business sector had risen by 21% during the period of Covid-19.

Based on those levels of click fraud – and considering that the average small business using Google Ads spends between $9,000 and $10,000 per month on paid search campaigns – firms were projected to lose more than $15,000 a year in 2020; money than no small business can afford to waste in light of the crisis.

The forecast

With the remaining Covid-related restrictions due to be lifted soon in the UK, many might expect the amount of click fraud taking place to begin falling and to soon return to pre-pandemic levels.

However, the coronavirus crisis has brought about a fundamental change in consumer habits, with many likely to continue using the internet as their primary method to shop, rather than returning to physical stores and face-to-face transactions en masse.

Therefore, the aforementioned industry report predicts that click fraud will continue to increase year-on-year by about 13%, and much of this will be carried out with the use of click bots on platforms like Facebook and Google.

This means that, rather than shrinking in size as the UK looks to a future post-Covid, the problem is actually growing and will be here to stay – unless businesses act now to mitigate the effects and limit the heavy losses they would otherwise incur.

What businesses can do to combat the issue

Business owners can find comfort in knowing there are ways they can take back the control and combat click fraud. Properly setting up rules on their website’s robots.txt file – a file that lives on a web server and specifies the rules for any bots accessing the website – is the first step they should take.

Although this will not necessarily prevent malicious click bots from accessing the website, it could hamper the efforts of overly aggressive crawlers – programmes that systematically browse the web to create an index of data – to take the site down.

Another method of reducing the risk is using Google’s reCAPTCHA security service, which requires human input or other validation, such as email verification or texted one-time codes.

Additionally, web-based solutions, like firewalls, can stop many threats from ever reaching a website, while identifying unusual traffic sources in a business’ analytics or spikes in login attempts can both often be tell-tale signs of bot activity.

Conclusion

With click fraud constantly on the rise due to increased ad spending brought about by the pandemic, businesses must take every possible step to mitigate the risks; especially at a time when so many are aiming to recoup the losses, they have incurred.

READ MORE:

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• Is your e-commerce business’ growth attracting fraud?
• Scaleup Spotlight: SEON, the fraud fighters who secured the highest SERIES A funding for a Hungarian company
• Fraudsters capitalise on fear, uncertainty and doubt during the pandemic

However, the bot problem is of such significance that it often requires substantial time and effort to tackle it, and this is why it is vital for businesses to seek expert advice so that their specific needs can be assessed.

As coronavirus continues to cause disruption, both socially and economically, firms must not make the mistake of underestimating the threat that click fraud poses to their future growth.

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