Study: Advertising spend lost to fraud grows by 21%

Dive Brief:

Advertisers will lose $42 billion of ad spend around the world in 2019 due to fraud across online, mobile and in-app channels, according to a new study from Juniper Research. This figure represents a 21% increase from the reported $35 billion lost to advertising fraud in 2018.
Juniper attributed the growth in loss to online scammers using more sophisticated techniques adopted and to smaller advertisers not adopting anti-fraud solutions.The report predicts that advertisers will only save $16 billion of the ad spend that would otherwise be lost to fraud. Juniper also expects that available ad inventory will grow faster than advertiser demand in the next four years. Scammers are expected to take advantage of this trend by running fraudulent ads in this inventory.
Fraudsters are likely to make a bigger play to target ad inventory on over over-the-top TV services in the coming years, with a lack of standardization across this inventory potentially exposing these ad units to scammers at a time when investments by advertisers are growing.

Dive Insight:

The digital marketing industry has launched some efforts to combat online fraud, but Juniper's research suggests their effectiveness remains limited due to lack of adoption by some marketers, increasingly sophisticated fraud activity and emerging markets that have yet to address fraud. One advanced fraud technique that is likely to become more prevalent going forward, according to Juniper, is spoofing advertising networks to falsify ad clicks and displayed ads. Other activities like app install farms could prove less appealing because of the amount of labor they require.

TAG registration and ads.txt, developed by the IAB Tech Lab, has been viewed as potential solutions to preventing fraud. And while some studies have shown that the efforts are paying off, other reports suggest that bad actors had found ways to work around ads.txt.

Juniper's research interestingly points to digital TV as the next battleground for ad fraud. As OTT TV services grow increasingly popular, with many people foregoing cable altogether, the channel is expected to be exploited. From email spam and mobile fraud to online dating scams and fake ads, historically, as consumers adopt channels and marketers are there to reach them, the fraudsters will follow looking to cash in.

"OTT TV service providers must address the issue of advertising fraud if they wish to attract high value advertisers to their platforms," research author Sam Barker said in a statement. "These players must prove the value of advertising on their services by minimising exposure to ad fraud through the adoption of fraud detection and mitigation solutions specific to OTT TV solutions".