Ad Fraud: As Tools Evolve, So Do the Schemes - eMarketer

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Ad Fraud: As Tools Evolve, So Do the Schemes

Industry remains unsure of fraud's overall cost

May 25, 2017

Fears about ad fraud have been building as the methods for perpetrating fraud become more sophisticated. At the same time, the industry remains unsure of fraud's overall cost to the digital display advertising ecosystem.

"Fraud detection and prevention tools have advanced, but so have the lengths to which fraudulent parties go to deceive buyers," said eMarketer analyst Lauren Fisher, the author of a new report on the subject. (The full report, "US Ad Fraud 2017: Buyers and Sellers Fall Prey to More Sophisticated Forms," is available only to eMarketer PRO subscribers.)

A February 2017 Adobe Digital Insights Summit Survey of US digital marketers found half of respondents cited concerns such as brand safety, viewability and ad fraud as leading challenges of media buying—more than other high-profile industry challenges, such as data integration and accurately measuring return on ad spend (ROAS).

Leading Challenges of Media Buying According to US Digital Marketers, Feb 2017 (% of respondents)

"Fraud is a significant problem," said Fisher, "but it is difficult to quantify its financial impact. For one, no single source has the capacity to audit every single display ad impression, nor the technical wherewithal to detect all forms of fraud, which in any case continue to grow, both in their scope and in their level of sophistication. Furthermore, some studies only look at select forms of fraud, like bot-based or nonhuman traffic."

Although sources differ in their estimates of the problem—and their assessment of whether this is a waxing or waning issue—everyone agrees that fraud is a multibillion-dollar issue for display advertisers.

US advertisers see varying levels of fraud depending on where they buy their media, which formats they buy, the types of fraud prevention tools they use and how active they are in looking to identify instances of fraud. Advertisers typically see higher instances of ad fraud in higher-value areas, such as mobile and video, and in less transparent programmatic arenas, such as the open markets.

As the web of digital ad fraud broadens and deepens, advertisers, legitimate sellers and industry organizations continue to push for greater accountability from those continuing to perpetrate it or permit its presence in the ecosystem.

Fewer than one in five US digital marketers (18%) polled by ExchangeWire Research and OpenX in July 2016 had a zero-tolerance policy when it came to ad fraud. Instead, 50% of respondents felt under 5% was an acceptable level, with the remainder willing to tolerate levels of 5% or more.

But while most advertisers accept fraud as an inevitable part of the ecosystem, tolerance for its presence—and those unwilling to quickly and transparently reconcile it—is waning.

Listen to eMarketer analysts Lauren Fisher and Cathy Boyle discuss the prevalence of ad fraud, and the steps the industry is taking to combat it, on the latest episode of the "Behind the Numbers" podcast.

New Report in eMarketer PRO This Week

Facebook Advertising 2017

As Facebook looks to new formats such as mid-roll video ads and messaging ads, concerns remain over video ad engagement, measurement and more. This report, based on extensive interviews with marketers and ad agency executives, digs into five factors that could impact future growth—and what marketers need to know about them. Preview Report

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