Advertisers will lose $42 billion of ad spend globally this year to fraudulent activities committed via online, mobile and in-app advertising.

Forty. Two. Billion.

The figures are contained in a new study by Juniper Research. The figure is bad, but it’s even worse when you realise that it’s accelerating. Back in 2017, Juniper believed it would be 2022 before ad fraud hit these kinds of levels.

The new figures represent a  21 per cent increase from the $35 billion lost to advertising fraud in 2018. The growth in fraud will be driven by increasingly sophisticated techniques being implemented by fraudsters.

The researchers arrived at their number by reviewing advertising networks, and fraud detection and mitigation platforms as well as seeking input from industry leaders.

Advertisers’ Loss to Reach $100 billion by 2023

The new research, Future Digital Advertising: Artificial Intelligence & Advertising Fraud 2019-2023, found that advertisers’ total loss to fraud will rise to $100 billion by 2023. The report claims fraudsters will gravitate to advanced techniques such as spoofing advertising networks to falsify ad clicks and displayed ads, rather than labour-intensive activities such as app install farms.

Juniper forecasts that advertisers will only save $16 billion of potential lost ad spend to fraud; owing to a lack of adoption of anti-fraud solutions from smaller advertisers and the increasingly complex tactics of fraudsters. Additionally, the research projects that the growth of ad media inventory from publishers will grow faster than advertisers’ demand over the next four years. As a result, fraudulent players will look to fill this increasing gap between supply and demand by filling unused inventory with fraudulent ads.

Digital TV the Next Battleground for Advertising Fraud

The research forecasts that spend on advertising over OTT (Over-the-Top) TV services will exceed $42 billion by 2023; rising from $28 billion in 2019. However, it found a lack of standardisation amongst OTT TV services leaves advertisers exposed to increased levels of fraud by simplifying the process needed to spoof advertising networks via connected TVs.

Research author Sam Barker noted “OTT TV service providers must address the issue of advertising fraud if they wish to attract high value advertisers to their platforms. 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”.

Juniper Research provides research and analytical services to the global hi-tech communications sector; providing consultancy, analyst reports and industry commentary.

A spokesperson for the company told Which-50, “The adoption of third party fraud detection and mitigation platforms are essential. These platforms can offer real time blocking of fraudulent advertising traffic to mitigate any wasted advertising spend before the ad can be displayed. Additionally, the adoption of machine learning algorithms is enabling these players to detect new fraud tactics more efficiently, thus reducing future wasted advertising spend.”

More information: Download the free whitepaper: ‘The Impact of AI for Digital Advertisers.’.

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