The Hidden Risks of Digital Advertising for Entrepreneurs and Nonprofits

Often seen as a way to enhance your business, digital advertising can sometimes have the opposite effect, wasting your budget, eroding your reputation, and even putting you under legal risk when carried out poorly.

Don’t get me wrong, advertising is an absolute must for you, whether you’re an entrepreneur or a nonprofit. Yet, you must anticipate all its potential pitfalls, so that your budget and reputation – truly the pillars of your success – are safe and sound. 

Keep reading to explore the five biggest risks of digital advertising and learn how to prevent them from harming your business.

Wasting Your Ad Spend

Inaccurate Targeting

Based on UX principles, any communication with your audience must be personalized to be effective. If your content doesn’t address users’ feelings, desires, and beliefs, it fails to establish brand-to-consumer resonance, a potent sales-driving force.

Even worse, some marketers adopt a “spray and pray” approach when configuring paid ads. This results in paying the ad networks for clicks from low-intent users, resulting in no actual conversions.

Affiliate Fraud

If you promote your offer through affiliate marketing, be aware of the increasing number of fraudulent schemes within this business model:

Stolen personal data	Criminals submit forms with people’s personal information without their consent.
Duplicate leads	You pay for leads processed by other businesses or for altered versions of the leads you have already bought.
Bot traffic	Fraudsters program bots to submit forms with random, often nonsensical, information.

Unless you’re using ad fraud protection, like IP Fraud Score – a scanner that, among other things, detects bots and assesses risks from provided IPs – fake leads can infiltrate your system, causing you to pay for dead-end traffic.

Low-Quality Promotional Assets

You allocate your budget inefficiently unless you incorporate these three components in your emails, website pages, and other promotional assets:

• Smooth copy: Smooth and engaging text that presents relevant product benefits and speaks directly to the reader.
• Engaging visuals: High-quality product shots, infographics, banners, or other graphical elements that convey information or emotion.
• Consistent tone: Your promotional assets across channels must adhere to a single visual and graphical style.

Should your content miss one of these elements, users will perceive your site as an unprofessional platform that evokes little trust, a place they won’t buy from.

Throwing Away Time and Effort

Digital advertising is not only a way to reach your audience but also a research method, in a sense. It helps you stay on top of your target users, revealing their locations, age, preferred gadgets, and even behavioral patterns.

In fact, the use of this data extends beyond one-time campaign optimization. If you store and analyze it properly, you can see how your audience’s preferences evolve, allowing you to adjust your marketing focus in the right direction at the right time.

Important note: If you generate calls, you need dynamic call tracking to acquire actionable insights into your audience. This technology creates and assigns unique tracking numbers to specific campaigns, so that you know what traffic they deliver.

Damaging Your Reputation

• Deceptive claims: Exaggerating the product’s benefits, promising false discounts, or displaying nonexistent sales times.
• Being excessive: Sending more than 3 – 4 emails to a single recipient in a week.

The most common way to tarnish a brand’s reputation in digital advertising is through deceptive claims, such as exaggerating the product’s benefits, promising false discounts, or displaying nonexistent sales times. These practices not only repel customers from purchasing but also from interacting with your brand.

Other advertising mistakes that can damage your reputation include poor grammar, intrusiveness, and excessive email frequency (more than 3-4 times a week). 

Leaking Personal Data

• Ad networks: Ads launched through dubious networks may infect users who click on them with data-stealing malware.
• Forms: Unencrypted forms are vulnerable to breaches, leading to data theft.
• Databases: Cloud storage without proper access controls and encryption is vulnerable to data breaches.
• Human error: Poorly trained employees may disclose sensitive data, such as spreadsheets containing customer information, to unauthorized users or fall victim to a social engineering attack.

Getting Under Legal Risk

Here are the digital advertising regulations you must abide by and the penalties for non-compliance:

Regulation	Descriptions	Penalties
TCPA	Commercial calling or messaging without user consent.	Typically, $500 – $1,500
CAN-SPAM Act	Using false and misleading header information and not providing users with a clear way to unsubscribe from your email list.	Up to $53,088
COPPA	Collecting information about users under 13 years old without verifiable consent from their parents.	Determined on a case-by-case basis
Lanham Act	Gaining an unfair marketing advantage through deceptive claims about your competitors.	Determined on a case-by-case basis

How To Prevent Digital Advertising Risks

Invest in High-End Software

Effective digital advertising is impossible without analytical software, and each marketing channel requires a separate solution:

• Google Analytics: Covers your web page analytics, revealing impressions, clicks, and positions in SERPs within a selected period.
• Mailchimp: Tracks your email open rates, clicks, and conversions, supporting integrations with popular tools, like Canva and Zapier.
• Hootsuite: Breaks down the effectiveness of organic and paid social media content across Facebook, Instagram, Twitter, LinkedIn, and TikTok in a single dashboard.

Businesses that use affiliate marketing, in turn, should invest in anti-fraud software. This includes reCAPTCHA for your forms to filter out bots and various IP checkers, better integrated with your lead management system, to flag suspicious publishers.

By the way, advanced website call tracking software may also serve this purpose. It analyzes caller behavior and flags concerning activity, such as a high volume of calls from a single publisher or calls originating from suspicious numbers.

Refine Marketing Strategies

You shouldn’t abandon marketing campaigns that don’t perform as expected immediately. They require tuning, which involves analyzing why they underperform and taking action to change that.

A/B testing is a sound way to put your campaigns on the right track. The method suggests splitting your traffic into two channels to test which variation of the promotional asset – whether it’s CTA, subject line, or banner – performs better.

Not only does it make your campaigns more effective, but it also provides you with actionable insights that you can use to calibrate other projects.

Thoroughly Check Your Affiliates

Whether native or push, affiliate marketing is an excellent way to acquire extra traffic streams. However, given the gradual rise of affiliate fraud, some of which you found earlier, you must be selective about your partnerships so as not to lose your money and reputation:

1. Automated vetting: Leverage software to scan an affiliate for fraudulent activity and compliance with your requirements.
2. Manual vetting: Explore and analyze an affiliate’s traffic and website content.
3. Continuous monitoring: Keep your hand on the pulse by regularly checking your affiliates for infractions.

Establish Communication Between UX and Marketing Teams

UX designers develop optimal user-brand communication, as well as cross-channel strategies – marketers execute these plans. Therefore, any miscommunication between teams can decrease the effectiveness of your investments.

You want to ensure that UX and marketing professionals coordinate their efforts through CRM systems, where they can assign tasks, set deadlines, and provide feedback.

Cross-team brainstorming sessions may also be highly productive. You can make them more convenient by inviting attendees to whiteboards, digital workspaces for real-time idea sharing.

Employ Narrow-Focus Professionals

Digital advertising becomes safer and more efficient when supported by the efforts of these specialists:

• Accountant: Tracks and analyzes your cash flows to ensure that your investments don’t go to waste.
• Legal assistant: Handles the matters of compliance, ensuring that your advertising doesn’t violate any laws.
• Affiliate manager: Recruits reliable publishers and manages their campaigns to streamline your traffic pipelines.
• Network security expert: Encrypts your promotional assets and online storage to ensure that no data is vulnerable to cyberattacks.

Keep Up With Industry Changes

Preventing online advertising risks is a continuous process rather than a one-time fix. The industry is in a state of constant change, and you must track emerging threats, regulatory changes, and ad tech trends.

For instance, SEO algorithms are never static. They no longer appreciate keyword stuffing as they did years ago; instead, they promote genuinely helpful and original content, even if its keyword score is inferior to competitors.

Artificial intelligence, with its automation capabilities, is causing an even more pronounced shift in the industry. AI handles content production, communication, data management, and even coding. The New York Times reports that companies will spend $375 billion globally on A.I. infrastructure in 2025, so artificial intelligence will only become more integrated and indispensable to business operations.