Dive Brief:
- Senators Mark Warner (D-Virginia) and Chuck Schumer (D-New York) have sent a letter to the Federal Trade Commission, asking the agency to investigate fraudulent digital ads, according to the Wall Street Journal.
- “It remains to be seen whether voluntary, market-based oversight is sufficient to protect consumers and advertisers from digital advertising fraud,” the senators wrote in the letter.
- Ad fraud will cost the industry $7 billion this year alone, according to the Association of National Advertisers. For consumers, it can be even more dangerous as fraudulent ads often redirect to websites riddled with click-fraud ads or malware.
Dive Insight:
The days of self-regulation for online advertising may be coming to an end if Mark Warner and Chuck Schumer have anything to say about it.
“This is a $60 billion industry, and some of the fraud numbers suggest that 10% of that is being wasted,” Warner said in an interview with the Journal. “And you’re seeing some of the same tools [we saw] in stock manipulation. This needs to be looked at.”
A study from December by AppLift and Forensiq found that 34% of mobile programmatic traffic is at risk of fraud. Beyond the cost to the industry, ad fraud is one of the highly cited reasons for people adopting ad blocking technology. That's a danger to all advertisers: Ad block users don’t see fraudulent ads, but they also aren’t served legitimate ads as well.
The key to battling ad fraud may be in following the money trail behind online ads. “A fully transparent, traceable supply chain that allows identification of all parties to a transaction is the only way to substantially reduce fraud,” Steve Sullivan, vp of partner success at Index Exchange, told Marketing Dive.
