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02 August 2022
02 August 2022
Posted by TrafficGuard

Ad Fraud in eCommerce — What’s the deal?

From holiday shopping sprees and black friday madness to back-to-school hauls, the summer months can be a lucrative time for eCommerce brands and online marketplaces who benefit from sunshine spending. We know these seasonal events have a tangible effect on people’s online purchasing habits, with “cyber week” spending accounting for 23% of the online gross merchandise value (GMV) for that period last year. Though even without the seasonal increase, it’s a good time to be in eCommerce: it’s predicted that annual eCommerce sales will surpass $1 trillion this year for the first time.

However, as a consequence of this growth, it’s been a great few years for ad fraud too. Fraudsters always follow the money, making eCommerce businesses particularly susceptible to the malicious intentions of bot farms and bad actors.

Ad fraud is a growing concern for PPC Managers and Marketing Execs in the eCommerce space, but you’re not in it alone! Today we’ll be exploring some key trends the TrafficGuard experts have noticed in the industry, and we’ll give you some valuable tips on how to keep your campaigns safe.

Fraud is making life difficult in a competitive industry.

It’s not just the price of physical materials and shipping costs that are rising: PPC managers are having to deal with CPC inflation as competition for prime keywords increases. With click costs climbing, marketers are finding their precious ad budgets are getting squeezed more than ever, making it difficult to reach ambitious targets. Considering many businesses' marketing budgets haven’t yet returned to pre-pandemic levels, marketing teams are already expected to do more with less.

They therefore need to do everything within their power to ensure their campaigns are as optimised as possible. In a competitive industry like eCommerce, attracting as much high-quality traffic to your online storefront is incredibly important to ensure conversions, sales, and a healthy overall bottom line. Mitigating ad fraud should be high on the agenda for eCommerce marketing teams as a matter of course, but is especially important for those who want to stretch their budget as far as possible.

It’s messing with metrics.

It’s super important for eCommerce businesses to have a good grasp of their metrics -especially CTR and conversions- as many have to manage large inventories and fluctuating seasonal demands. Of course “data is king” in all industries, but eCommerce in particular relies heavily on accurate insights into how each of their ad campaigns and products are performing.

As well as having an effect on budgets, invalid traffic can wreak havoc on performance metrics. Symptoms of invalid traffic in your campaigns can include…

  • Concerningly low conversion rates, as bots/bad actors click on your ads but do not make a purchase.
  • Spikes in traffic after steady periods.
  • HIgh bounce rates which indicate a large volume of users on your site who quickly navigate away.

eCommerce marketers can’t make informed decisions on product callouts and launches, discounts, influencer campaigns, or pretty much any wider marketing strategy without reliable and clean data. Invalid traffic and its effects should be a priority for online marketplaces who want to capitalise on growth.

The proof is in the numbers.

We recently worked with an online marketplace who was running $40k in Google Ads every month across multiple accounts. Their ad ops team would attempt to deal with invalid traffic by analysing placement reporting and manually updating exclusion lists across their Google Ads accounts and properties. This approach was neither fast nor comprehensive enough to offer adequate protection against ad fraud and invalid traffic. The result? Wasted ad budget and lost opportunities. Here’s a rundown of what we found:

  • We identified 135% more invalid traffic than Google, representing a cost-saving of $3k+.
  • Invalid traffic sources were set to waste another $7k of ad spend that month if left untreated.
  • These numbers represented approximately 25% of the client’s monthly ad spend.

There was a happy ending to this story, however. After drafting in TrafficGuard to deal with the problem of invalid traffic, the online marketplace turned their ad campaigns around. We enabled…

  • A 12% reduction in their cost-per-conversion.
  • An 8% improvement in their conversion rate, as their traffic quality was improved.
  • 24 x ROI, purely because of mitigated invalid traffic.

Want the TrafficGuard treatment?

It’s a good time to be an online marketplace, but with the effects of invalid traffic wreaking havoc on marketing campaigns, eCommerce businesses must prioritise invalid traffic prevention in order to stay competitive. The only way to safeguard against large-scale bot attacks is to implement a strategy fit for the demands of your industry, not a one-size-fits-all approach which many legacy partners offer.

TrafficGuard enables eCommerce companies to access better results for their PPC campaigns with a proactive, multipoint approach. If you’d like to know more, reach out to our team.