The Google Search modules leak exposed by Rand Fishkin, SEO tool Moz creator and SparkToro founder, two weeks ago has wide implications, and one of these is how it made advertisers vulnerable to ad fraud.
About $84 billion or 22% of global ad spend was lost in 2023 due to ad fraud, which involves manipulating traffic or click statistics, according to data compiled by Juniper Research.
TV commercials used to rule advertising spend, but when the pandemic happened, most brands naturally followed the trend and shifted their budgets online.
Now, digital video ad spending has overtaken traditional TV, with Statista projecting an almost 50% disparity between the two by 2026.
From pre-pandemic 2019 to post-pandemic 2022, digital video ad spending in the U.S. more than doubled from over $30 billion to nearly $70 billion, overtaking linear advertising by almost $10 billion.
![Digital advertising spending in the U.S. from 2021 to 2028 Statista data on the digital advertising spending in the U.S. from 2021 to 2028](https://media.designrush.com/tinymce_images/637909/conversions/dtatista-digital-ad-spend-statistics-content.jpg)
Comparing data from Statista and IBIS World shows that companies in the U.S. spent $243.1 billion on digital ads in 2022, which makes up 70.6% of the year’s total ad spend of $344.5 billion.
Of the $243.1 billion, $99 billion or 40.7% was spent on search advertising, according to statistics compiled by eMarketer and InsiderIntelligence.
These data sets not only prove how a majority of brands’ ad budgets now go to digital advertising but also highlight the substantial amount spent on search engine marketing (SEM) and search engine optimization (SEO).
SEO is utilized to make websites rank on Google Search, which is used for over 90% of searches, increasing brand visibility and building authority.
But malicious entities saw this burgeoning industry as a way to earn easy money through ad fraud.
What Is Ad Fraud?
Ad fraud occurs when cybercriminals use nefarious methods to take digital ad revenues from brands and agencies.
For instance, device and IP address spoofing entails the impersonation of multiple devices and the use of fake IPs to trick connected TVs (CTVs) into 'thinking' that their ads are being viewed by real users.
They then create fake agencies or publisher accounts that take credit for these ad impressions, enabling them to earn monthly paychecks from advertisers.
Scammers also engage in click manipulation by using bots and hiring people to click on targeted ads and content, directing ad payments to fraudulent accounts.
Pay-per-click (PPC) ads are more vulnerable to click fraud, with advertisers paying for every click on their ads.
Cybersecurity firm Imperva’s “2024 Bad Bot Report” attributes 32% of internet traffic in 2023 to bad bots or software and apps that maliciously perform automated tasks like clicking.
Statista projects that the cost of global digital advertising fraud will reach a whopping $172 billion in 2028.
Now, after the Google SEO leak was analyzed by experts, it shows that click-through rate (CTR) is being used by the tech giant as a ranking factor, which it previously denied doing.
“If just runs a bunch of bots on your PPC ads, and then you’re paying them a million dollars for fake traffic, that’s not going to work,” Mike King, iPullRank founder and technical SEO expert, explained during a DesignRush Roundtable discussion of The Great Google SEO Leak.
“Click manipulation is costing advertisers billions, and this leak shows how easily Google’s system can be gamed,” DesignRush SEO Director Robin Fishley added.
What Does This Mean?
First off, brands use SEO and SEM strategies, which include PPC ads, to rank on Google Search results.
The higher you rank, the more likely people will click on your website, and the higher the chance that people will buy whatever you’re offering.
On top of building brand awareness, it also significantly contributes to establishing your company’s credibility.
CTR (clicks ÷ impressions) essentially means measuring how many clicks a website gets over the number of ad impressions or digital views.
Because the Google Search algorithm leak exposed that Search does indeed use CTR as a ranking factor through NavBoost, it means that its results are vulnerable to click manipulation.
“NavBoost is still, I believe, one of [Google’s] strongest ranking signals. It does look at clicks,” AJ Kohn, SEO expert and owner of the blog, Blind Five Year Old, said.
“It’s essentially a clicks-over-expected-clicks model. If you’re ranking third and Google expects you to get a 12% CTR, and you’re actually getting a 15% CTR, you’ll probably move up,” he added.
What this essentially says is that Google’s system can be manipulated by clicks, and this opens up a whole can of worms about why it didn’t let advertisers know beforehand so they can be better prepared to combat it.
On top of this, it perpetuates a vicious cycle where big brands ranking high on search results continue to get the most clicks, keeping their top positions to “an elite circle” and ultimately isolating small businesses, SEO Stack IO Director Daniel Foley Carter explains.
But King speculates that Google may have intentionally hidden using clicks as a ranking factor because it knows that it will be taken advantage of.
“They (Google) don’t want us destroying such a valuable signal. I think that it’s as simple as that,” he shared.
Whatever Google’s intention may be, the fact remains that the ad industry is losing a big chunk of its precious budget to ad fraud.