According to UK-based Juniper Research, that represents 9% of all digital advertising expenditure and the amount will more than double to $44bn by 2022.
The report, Future Digital Advertising – AI, Ad Fraud & Ad Blocking 2017-202, argued that the closed platform approach, whereby advertising platforms restrict the flow of advertising performance data to brands and publishers, must be abandoned to stimulate transparency between stakeholders.
Unless that happens, advertising fraud rates will continue to increase, it said, further hindering stakeholder efforts in tackling fraud.
Artificial intelligence (AI) may have a role to play, Juniper suggested, being able to analyse vast amounts of data to identify fraudulent activity.
“Fraudsters will continue to heavily invest in domains, user accounts and bot farms in order to appear genuine,” according to report author Sam Barker.
“Advertising stakeholders will demand constant vigilance against the threat of ad fraud,” he added, “which will only be achieved through the correct implementation of AI services”.
The report comes as companies that provide anti-fraud products can now sign-up with JICWEBS – the independent body that defines best practice and standards for trusted online ad trading in the UK – for an independent audit from ABC to verify how they reduce the risk of fraudulent ads being served.
The Juniper study further predicted that platforms leveraging AI for targeting purposes will account for 74% of total online and mobile advertising spend by 2022.
But as the adoption of AI hits saturation point, only those platforms with the most effective algorithms will be able to charge premium prices to advertisers.
Platforms will also need to focus on new data sources to improve the proficiency of their AI algorithms, in which case data from IoT (Internet of Things) devices, information sharing partnerships and cross-device user identification will become highly sought-after.
Sourced from Juniper Research, JICWEBS; additional content by WARC staff