A new study of over 1 million Australian online browsers suggests the cost of ad fraud to Australian advertisers could be as high as $116 million annually.

Ad fraud has been a prevalent issue for a number of years but recently emerged as one of the most topical issues of the media industry this year. To assess the real impact of ad fraud, Datalicious captured various data points – including the number of impressions, creative size, time of load, browsing behaviour, content type and time of browsing – in order to assess the damage.

Display ad fraud can be broken down into two categories: fraudulent ad impressions (ads that were never really served) and fraudulent website visitors (fake users who don’t exist).

The study revealed that the impact of fake impressions is estimated to be $48 million and fake visitors to be $68 million per year, with 7.41 percent of all display ads impacted by ad fraud.

Clear and present

The threat of ad fraud to Australian media budgets is real and it’s significant.

However, Australia ranks lower than other digital advertising nations, where 4.3 per cent of all advertising traffic is considered fraudulent compared to 8.3 percent in U.S. and 7.7 percent in France.

So while Australian marketers and advertisers need not panic (just yet), it is time to start monitoring the issue, according to Datalicious CEO Christian Bartens.

“While the overall percentage of ad fraud is still small, the resulting dollar value of budget wastage is already quite significant – and who really wants to spend a single cent on ads that are not being seen by real people? Marketers and media agencies need to start tracking the impact of ad fraud.”

So what can the industry do to combat the issue?

The Datalicious study suggests engaging independent data and analytics companies to investigate the loss of revenue or wasted ad exposure at every level.

At ADMA, we recommend that marketers and advertisers arm themselves with a deeper level of understanding of the issue of ad fraud. We have developed a new education program, the IQ Spotlight series, to help marketers navigate through the most pressing issues of the industry today. Part of the first episode of the series will tackle the issue of ad fraud so marketers can understand what it is, how it impacts the industry and learn best practices to reduce or eliminate fraud.

As ad fraud is part of a much broader discussion, the first episode will also cover the issues, challenges and potential solutions around viewability and brand safety for their organisations.

Find out more about the IQ Spotlight series, free for all ADMA members.

About the Author

Nikola Hopkinson is the content manager at ADMA which is a corporate member of the Which-50 Digital Intelligence Unit. Members contribute their expertise and insights to Which-50 for the benefit of our senior executive audience. Membership fees apply.

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