A new report by the WFA (World Federation of Advertisers) says that globally, ad fraud might be in the range of 10 per cent to 30 per cent, though the writers of the report also agree that the actual number could be way more than 30 per cent, with some estimates quoted by WFA suggesting a figure as high as 90 per cent.
“By 2025 the total global investment on digital media is projected to be within a range of $400 billion to $500 billion. If just 10 per cent of the upper limit within this range is exposed to ad fraud, this will be second only to cocaine and opiate markets as a form of organised crime,” the report states.
These numbers highlight an increasingly pertinent issue in today’s digital age where a large percentage of ads are either not getting delivered due to technical reasons or are being viewed by bots.
The WFA’s numbers seem to be in line by other independent studies done over the years. Mobile ad tech firm AppLift found in a report done in 2015 that 34 per cent of all mobile traffic is at risk of fraud. Even the IAB, in a joint report with EY released in December 2015, said that fraudulent impressions, infringed content, and malvertising cost the U.S. digital marketing, advertising, and media industry $8.2 billion annually.
Digital advertising specialists we have spoken to also generally agree that around 30-40 per cent of all digital ad inventory or traffic is fraudulent.
Coming back to the WFA study, the report states, “30 per cent of the $150 billion market in 2016 would equate to $45 billion. Assuming that this would remain constant over the next 9 years, so growth comes only through the enlargement of the digital advertising market, ad fraud would represent $140 billion by 2025.”
Findings from WFA research identify that 9 in 10 (92 per cent) of advertiser respondents agree that ad fraud is perpetuated by the structure and systems in the digital media ecosystem. The study suggests that it is incumbent upon the ecosystem, including publishers and others on the sell-side, plus programmatic companies, agencies and others on the demand-side, to prove that the capability to effectively deal with ad fraud is in place. Until this time, advertisers should use caution in relation to their overall digital media investment, to limit the growth of ad fraud and their exposure to it.
However, this is easier said than done, especially since not many on the supply side, including ad networks and publishers might want to appreciate the size of the problem. For example, the head of one ad tech firm told us that brands need to start looking at the quality of ads they are buying more minutely and regularly without just blindly trusting digital partners.
Even the WFA report urges users that virtually any programmatic buy can be exposed to ad fraud; even direct programmatic TV buys are vulnerable. “Any claims to the contrary should be treated with caution,” it advises brands, while further suggesting that the industry’s focus should be concentrated on the two areas where the ad fraud money is being made - spam-sites and sourced traffic.