Click Fraud and Beyond: What’s Driving Demand for Proxy Data?

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By Andy Ashley, International Marketing Director, Digital Element

Brands are investing huge amounts in digital advertising with spend exceeding £13 billion in the UK alone last year. But marketers are growing increasingly frustrated with the impact of proxies on their campaigns, leading to rising demand for accurate and reliable proxy data that will empower them to improve efficiency and boost performance. 

The problem with proxies

Proxies are used to connect to the internet and allow anonymous browsing by masking the location of a user’s IP address. Proxies have legitimate functions as well as illicit uses. Valid reasons for using a proxy include increasing security and privacy, which often applies to proxies used on corporate, public or educational networks. Less lawful purposes include circumventing digital rights management to gain access to content the user is not entitled to, and masking internet traffic to enable fraudulent activity.

Proxy use has proliferated in recent years due partly to the increased availability of cheap IP-redirect options that run through geographically distributed hosting facilities. These include Virtual Private Networks (VPNs), anonymisers, and Tors, some of which are available via subscription or are free services for enabling anonymous browsing. To illustrate the scale of the problem, a recent report reveals 30% of global internet users have used a VPN or proxy server in the past month and almost a third of those use these services on a daily basis.

Rising demand for proxy data

As the use of proxies rises, so does demand for accurate proxy data. When businesses understand traffic is connecting via a proxy, as well as what type of proxy it is, they can better determine how to handle it. Organisations want proxy information in their data arsenal and are pushing partners such as ad networks, analytic companies and fraud prevention solutions to embrace it.

To generate accurate and up-to-date proxy data, IP address lists must be constantly evaluated and re-evaluated to check whether they display proxy-specific behaviour, such as requiring login credentials. Identifying and potentially restricting suspicious traffic helps marketers improve campaign efficiency and performance in three key ways:

Fighting click fraud

The global cost of ad fraud is difficult to measure – with estimates varying widely from around $6 billion to $23 billion – but the bottom line is marketers don’t want to waste any of their precious budgets on fraudulent ads. Because proxies are anonymous and avoid detection they are frequently used to perpetrate fraud, and reliable proxy data can help with detection and prevention.

Using proxy data, marketers can identify users that are intentionally masking their location to engage in unlawful activity. Suspicious traffic can be identified instantly and, in the case of hosted or pay-per-click (PPC) ads, proxy data can be used to combat malicious clicks, ensuring businesses don’t get charged for ads that are clicked on fraudulently. Alternatively, monitoring for increases in campaign traffic that originate from outside the desired targeting one, which could signal fraudulent activity. Through identifying such spikes, any high-risk users or activity can be stopped before damage is done. Location data can also be utilised to filter out interactions from regions where goods and services are not available, for example, or spotting non-viable distances between clicks – both of which help to stop invalid engagement skewing results.

Avoiding wasted impressions

Knowing a user’s location provides companies with valuable insight into who they are and what they need. Using geotextual data or proximity intelligence, marketers can make contextual assumptions about a user’s demographics or lifestyle based on their immediate location. The ability to develop context around a user’s location is incredibly useful for delivering relevant, timely, personalised messaging to individual users within an online audience that is largely anonymous and geographically dispersed.

But relying on location data attached to an IP address is problematic when the user is hiding their location behind a proxy. Organisations find themselves tailoring messaging and content to the location of the proxy, not the user. This situation leads to incorrect targeting, wasted impressions and campaign inefficiencies. By leveraging reliable and accurate data, marketers can bypass proxy traffic and avoid throwing away ad spend.

Enhancing analytics

In addition to fighting fraud and avoiding wasted impressions, businesses can also incorporate proxy data into analytics to report on traffic quality. Web traffic is often used to measure the success of marketing campaigns, but teams should avoid relying too heavily on top-line visitor stats. They need to drill down into that traffic to find out where it came from, and how much was valid human traffic as opposed to non-human traffic or bots. By using proxy data to establish how much traffic came through proxies, as well as the types of proxy used, brands can better understand the impact of their marketing efforts and set realistic expectations for future campaigns.

As digital ad spend continues to grow organisations need to make the most of every penny but, by enabling fraudulent behaviour and distorting valuable location information, proxies are limiting efficiency. Due to its ability to detect and elude suspicious traffic, identify proxy users to avoid inaccurate targeting, and enhance analytics to understand traffic quality, businesses are demanding up-to-date and reliable proxy data that can boost efficiency and enhance performance.

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