Get a demo Do I subscribe? News sign-up
Print

Ad fraud costs $7bn

News, 20 January 2016

NEW YORK: Despite the industry's efforts, the level of ad fraud appears to remain much the same according to a new study from the Association of National Advertisers.

The trade organisation conducted research with White Ops Inc, an ad fraud detection firm, tracking online ad buys of 47 brands over a two-month period in the third quarter of 2015 and found that levels of fraud were "relatively unchanged" from a similar 2014 study.

Anywhere between 3% and 37% of ad impressions in the latest study were found to result from the actions of bots, compared to between 2% and 22% in 2014, the Wall Street Journal reported.

Overall, around one in ten display ads were being viewed by bots and around one in four video ads; the higher figure for the latter was, the study noted, because the higher value ad units involved provided a stronger incentive for the fraudsters.

Even though fraud levels were broadly static, the ANA put the potential losses from fraud at $7.2bn, up from a figure of $6.3bn in 2015, a consequence of digital ad spending being expected to grow 15% in 2016.

Bob Liodice, ANA president, said the findings underlined "the need for the entire marketing ecosystem to manage their media investments with far greater discipline and control against a backdrop of increasingly sophisticated fraudsters".

White Ops CEO Michael Tiffany was more specific, stating that many advertisers continued to buy from exchanges selling ad space on less-than-premium sites where fraud levels are likely to be higher.

And even when advertisers weren't buying programmatically, Tiffany accused them of doing little to discourage "sourced traffic" – where publishers hire third-parties to drive traffic to their sites.

Ads bought from these publishers were three times more likely to have fake traffic, the study said.

"Theoretically, we [marketers] should be pulling back from the digital supply chain because of all the issues such as fraud, the lack of transparency, ad-blocking and viewability," said Liodice.

While that clearly isn't happening yet, he continued to maintain that advertisers would do so at some point "if we do not successfully mitigate these issues".

Data sourced from Wall Street Journal, Financial Times; additional content by Warc staff