Ad fraud isn’t just stealing money; is it distorting marketing decisions too?

On paper (and screen), an article about ad fraud looks like a familiar story about wasted budgets and bad actors. In practice, and in an increasingly digitizing marketplace, it is something more destabilising. 

Digital advertising in India is leaking roughly Rs 30 crore every single day to fraud, according to mFilterIt’s Ad Fraud Intelligence Report 2025. Fraud is no longer just siphoning money out of media plans. It is quietly widening the gap between what brands are spending, what platforms report as effective, and what marketers actually need to grow businesses.

India’s digital ad market has matured rapidly over the last decade, driven by cheap data, explosive app adoption, and a performance-first mindset that rewards scale. Budgets have followed audiences across search, social, programmatic, marketplaces, and now CTV. At the same time, dashboards across platforms continue to show healthy impressions, clicks, installs, and attributed conversions. Yet behind those metrics, confidence is fraying.

Read On: mFilterIt releases Ad Fraud Intelligence Report

“There is absolutely a widening gap between what platforms report and the actual incremental value marketers in India are experiencing,” said Yaron Tomchin, CEO of Mobupps. “Platforms optimise for volume-based metrics like clicks, installs, and attributed conversions, while marketers are increasingly focused on outcomes, real uplift, incremental users, and long-term value.”

According to Tomchin, the problem is not advertiser naïveté but ecosystem complexity, where heavy remarketing, overlapping audience pools, and siloed platform reporting inflate performance signals even as true net-new growth remains elusive.

The data supports that unease. Pixalate’s Q2 2025 APAC Invalid Traffic and Ad Fraud Benchmarks show India recording roughly 19 percent invalid traffic on the web and about 42 percent on mobile apps, placing it at the highest risk for mobile app fraud in the region during the quarter.

Globally, baseline invalid traffic levels for the same period stood at around 19 percent for web and 29 percent for mobile apps, highlighting just how elevated India’s exposure is by comparison. mFilterIt’s 2025 report adds another layer, estimating that AI-driven ad fraud is now causing around 12 percent marketing spend leakage in India, with non-linear, human-like patterns that evade traditional rule-based detection.

This is not the era of obvious bot farms clicking in straight lines. Fraud today is increasingly behavioural, mimicking real user journeys across devices, apps, and time. “The scale of IVT, bots, and MFA exposure in India has undoubtedly increased in the past year, and it’s evolving faster than many advertisers realise,” Tomchin said. “The challenge now is not just blocking obvious invalid traffic, but identifying sophisticated patterns that distort attribution and drain media spend.”

For buyers on the ground, this evolution shows up most clearly during moments of peak scale. “In India the mismatch looks less like fraud and more like a measurement gap,” said Russhabh R. Thakkar, founder and CEO of Frodoh. “Platform dashboards report rising impressions and engagement, but third-party audits and incremental lift studies often show weak or no corresponding business movement.”

Thakkar pointed to festive and sports windows, when CTRs and impressions spike sharply, only for audits to later trace much of that activity back to low-quality or bot-driven surfaces.

Read On: Ad Fraud: Inside digital advertising’s $172 billion shadow economy

What makes this gap harder to confront is that optimisation works. Integral Ad Science’s 20th Media Quality Report found that ad fraud rates were roughly 15 times higher in non-optimised campaigns at around 10.9 percent, compared to about 0.7 percent in campaigns using pre-bid and post-bid controls.

Guardrails clearly protect budgets. They also mask how fragile the underlying system can be.

As Thakkar put it, “Prevention beats cure in fraud control, but optimisation can also give a false sense of comfort if marketers stop asking what would happen without those controls in place.”

That tension between protection and truth is increasingly familiar on the brand side. A senior marketing head at a large beauty brand, who requested anonymity, described the situation bluntly. “As a brand, you can’t pause spends just because measurement isn’t perfect. But it’s exhausting to optimise against numbers you don’t fully trust,” the executive said. “Between social, marketplaces, and programmatic, there’s always pressure to keep budgets flowing where the numbers look strongest. The challenge is knowing how much of that performance is real versus recycled demand or low-quality traffic, especially when every platform reports success in its own way.”

That fatigue is shaping behaviour across the market. Brands are tightening whitelists, insisting on third-party verification baked into insertion orders, and pushing more budget toward environments perceived as safer, even if they are less transparent. Retail media is one such beneficiary. Programmatic budgets are being gated more aggressively, and in some cases rerouted entirely.

According to multiple industry studies, fraud pressure is rising across affiliate and programmatic routes due to incentivised actions, click spamming, and synthetic behaviour, reinforcing the need to audit supply paths and conversion integrity rather than relying on surface-level KPIs.

Read On: How AI and adtech are fighting India’s festive ad fraud

From the agency and advertiser perspective, this often looks less like a solution and more like a coping mechanism. “There’s a real gap between what platforms report and what marketers actually see on the ground,” said Vaibhav Jain, head of media at First Economy. “Every platform uses its own rules, so a view or a click means something different everywhere. Most teams end up switching between dashboards that rarely match, which only adds to the confusion.” Jain said the absence of common standards and shared definitions continues to undermine trust, even as spend keeps climbing.

The risk is that this confusion is about to intensify. As advertisers diversify into newer formats and channels, verification and measurement are lagging adoption. Tomchin believes the next vulnerabilities will emerge at the intersection of rapid media expansion and inconsistent standards. “CTV, in particular, is at an inflection point,” he said. “Consumption is booming, but measurement is fragmented and fraud is increasingly sneaking into streaming environments, especially through spoofed devices and malformed inventory.”

Retail media networks, while growing aggressively, also vary widely in reporting maturity, while influencer and social commerce still struggle with authentic reach verification.

Thakkar echoed that concern, especially around CTV and programmatic supply chains. “CTV adoption in India has surged, but device spoofing and emulator-based counterfeit devices can claim premium impressions at scale,” he said, pointing to global verification research that has already documented such patterns.

Programmatic, meanwhile, continues to wrestle with resold supply and inconsistent upstream controls, even as automation pushes spend toward whatever inventory clears fastest.

Not everyone in the ecosystem sees this as a new problem. “The mismatch between platform reports and ROI is an old issue that continues to grow,” said Nikhil Rangnekar, CEO of MediaCircle, citing bot proliferation, platform-side measurement bias, and duplication challenges. His view reflects a broader industry acceptance that some level of inefficiency has become normalised, particularly in performance marketing.

Yet what has changed is the scale and subtlety of the distortion. AI-driven fraud is no longer just stealing budget. It is reshaping optimisation logic, inflating benchmarks, and training algorithms on polluted signals. Campaigns that look efficient on dashboards may contribute little to incremental growth, while marketers struggle to explain the gap internally.

As Tomchin noted, “Incrementality testing has shown us that many campaigns that look efficient actually contribute very little to net-new growth.”

The consequence is not just financial loss but erosion of confidence. When brands stop believing their own numbers, decision-making becomes defensive. Budgets gravitate toward perceived safety rather than proven effectiveness. Innovation slows. The open web suffers as spend concentrates in a narrower set of environments. None of this shows up neatly in quarterly reports.

For advertisers, the implication is uncomfortable but unavoidable. Independent verification, full-funnel validation, and incrementality testing are no longer nice-to-haves or specialist exercises reserved for large brands. They are becoming the minimum price of participation in a market where reported performance and real outcomes are drifting apart.

As India’s digital economy continues to scale, the question is not whether fraud can be reduced to zero. It is whether marketers can rebuild trust in the numbers they rely on to make decisions. If that gap keeps widening, the cost will extend far beyond wasted media budgets.