“Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” This line has followed marketers for decades, and in today’s digital-first world, it feels more relevant than ever.
Ad fraud in 2026 is emerging as a global problem.
With global digital marketing spends hitting USD 21.2 billion in 2024 and projected to grow to USD 51.1 billion by 2034, expanding at a 9.2% CAGR, brands are investing heavily across platforms, formats, and audiences, betting on data-driven precision to deliver results.
But as digital advertising scales, so does its biggest hidden challenge: digital ad fraud. Brands still see ad fraud as a linear problem, neglecting the roots till which it has extended its feet.
This blog is going to highlight –
- The common types of ad fraud impacting each funnel
- Impacts of ad fraud on brand campaigns
- Measures brands can take against ad fraud
What are the Common Types of Ad Fraud?
Digital ad fraud is no longer a linear problem, it has extended its reach across the marketing funnel, impacting performance at each level. Let us understand the types of ad fraud based on each funnel.
Stage 1 – Impression Level Fraud
Viewability of your ads does not define whether your ads are viewed by the right audience. Fraud is happening at that level as well including,
Ad Stacking
In ad stacking, multiple ads are placed on top of each other in the same ad slot. Only the top ad is seen, but advertisers are charged for all of them.
Pixel Stuffing
In pixel stuffing, ads are squeezed into extremely small spaces that users cannot notice, yet impressions are still counted and billed.
Frequency Cap Violation
Fraudsters show ads to the same user far more times than the set frequency limit. It often happens due to bot activity, cookie manipulation, or device spoofing, causing ads to be repeatedly served to non-genuine users. As a result, budgets are drained, reach is distorted, and real users may see fewer ads than intended.
Domain spoofing
Fraudsters disguise low-quality websites as premium publishers to sell cheap inventory at higher prices.
Made-for-Advertising (MFA) sites
These websites are built to only generate ad revenue, with thin content and little to no real user engagement.
Stage 2 – Click Fraud
Once your ad is viewed, it is important to know who have clicked on your ad. When you believe your campaign is getting all the right clicks, here’s a trap that fraudsters have laid, baiting you to believe that your campaigns are performing well in the metrics, whereas conversions fail. Types of click fraud include –
Click Farms
Fraudsters hire low-paid workers or coordinated setups that manually generate fake clicks, installs, or engagements on ads to make campaigns appear more successful, even though there is no real user interest or intent.
Organic Hijacking
Fraudsters take credit for genuine user actions like app installs or conversions that would have happened naturally, making it look like their traffic drove the result and stealing attribution from the real source.
Click Spamming
Fraudsters generate a large number of fake or low-quality clicks across multiple ads in the hope that one of those clicks gets credit for a conversion. These clicks usually come from bots or automated scripts and inflate click metrics without showing real user intent.
Click Injection
Fraudster sends a fake click at the exact moment a user is about to convert (such as installing an app). This tricks attribution systems into crediting the fraudster for a conversion that would have happened anyway.
Stage 3 – Event Fraud
While you may not notice, fraud is happening even at the stage of soft KPIs (installs, signups, etc.) where low-quality users are draining your ad budgets. The kinds of fraud happening at the event level include –
Incent Fraud
Incent fraud happens when fraudsters run incentive campaigns to attract users by offering points, cash, discounts, or in-app currency for completing actions like clicking an ad, installing an app, or signing up.
Coupon/Referral Fraud
Here, fraudsters misuse discount codes or referral programs to gain benefits they are not entitled to. They may create multiple fake accounts, use bots, or exploit loopholes to repeatedly apply coupons or generate false referrals, leading to revenue loss and skewed performance metrics.
Lead Punching
Lead punching happens when fraudsters submit fake or low-quality leads into a system—often using bots or fake forms—to claim credit or commissions, even though these leads have no real potential to convert.
Retargeting Fraud
Retargeting fraud occurs when fake users or bots are made to appear as interested visitors so ads can be repeatedly shown to them. Since these “users” are not real potential customers, retargeting budgets get wasted on impressions and clicks that have no chance of converting.
What is the Impact of Ad Fraud on the Campaign Budget of Advertisers?
Ad fraud affects not just spend, but also how campaigns are measured, optimised, and scaled. The following are the impacts of ad fraud –
- Loss of Media Spend to Invalid Activity: Budgets are spent on clicks and impressions generated by bots, click farms, or MFA sites that never lead to real users or conversions.
- Reduced Efficiency of Campaigns: When invalid traffic consumes impressions and clicks, genuine users see fewer ads, lowering reach, conversion rates, and overall return on ad spend.
- Misleading Performance Signals: Inflated metrics such as CTR, installs, or engagement make low-quality inventory look effective, leading to repeated investment in the wrong channels.
- Brand Safety and Trust Impact: Fraudulent traffic often originates from deceptive or low-quality environments, increasing the risk of ads appearing alongside misleading or unsafe content.
- Rising Acquisition Costs: Artificial demand created by fraud drives up CPMs and CPCs, forcing advertisers to pay more to reach legitimate audiences.
How can advertisers solve ad fraud?
To fight ad fraud, advertisers must see Ad Fraud Beyond the Linear Lens. For this, the right ad fraud detection tool like mFilterIt’s Valid8 is required which will not only track your ad performance funnel-wise but also ensure all your channels (app and web) are covered to make it your one-point destination for all the traffic validation activities. Below are the key areas this approach covers:
- Validate Impression Quality at the Source: Continuously monitor placements, domains, and apps to detect impression-level fraud such as ad stacking, pixel stuffing, MFA sites, and domain spoofing, ensuring ads are served in viewable, brand-safe, and genuine environments.
- Stop Invalid and Manipulated Click Activity: Identify and block click fraud tactics like click spamming and click injection by analyzing click frequency, timing and source anomalies before fake clicks distort campaign performance.
- Protect Retargeting Spend from Fake Audiences: Verify audience authenticity at the beginning of the funnel to prevent bots and non-human users from entering retargeting pools, ensuring retargeting budgets are spent only on real users with genuine intent.
- Detect and Prevent Referral and Coupon Abuse: Monitor referral patterns, account creation behavior, and redemption activity to identify fake accounts, repeated misuse, and abnormal redemption spikes that lead to revenue leakage and misleading attribution.
- Eliminate Incent-Driven and Low-Quality Events: Distinguish between genuine user actions and incentivized or manipulated installs, signups, and events that inflate volume but deliver no real engagement or lifetime value.
- Ensure Funnel-Wide Traffic Validation Across Channels: Apply unified fraud detection across web and app campaigns to ensure consistency, accuracy, and protection at every stage from impression to conversion without leaving blind spots.
Conclusion
Ad fraud is no longer a hidden, backend issue; it is a direct threat to advertising performance, measurement, and growth. For advertisers in today’s digital-first ecosystem, fighting ad fraud requires moving beyond a linear, reactive approach.
With right traffic validation by third party ad fraud detection solution like Valid8 by mFilterIt, brands can ensure that their digital advertisement reaches the targeted audience in real environments for real impact.
