More Ad Fraud will be Stopped This Year than Will Succeed

Bot Baseline Report

Advertising fraud rates are falling, and for the first time the majority of fraud attempts are being blocked before the buyer pays for the impression, according to White Ops and the ANA’s Bot Baseline Report for 2018-2019. The study found that fraud attempts amount to 20 to 35 percent of all ad impressions, but over half of of this is cut out by various preventative measures adopted by the industry.

The report draws on data provided by 50 ANA members, tracking bot fraud levels across 2,400 campaigns, 130,000 placements, and 27 billion impressions.

Using that data, White Ops projects that losses accountable to digital ad fraud (not including search or paid social media campaigns) this year will reach $5.8 billion globally, down from $6.5 billion in 2017. This is an eleven percent decline in the basic volume of fraud, but an even greater decline in the percentage of ad spend lost to fraud, since digital ad spending overall increased by over 25 percent in this period.

Fraud rates for video specifically are still higher than other formats – on desktop for example, 14 percent of impressions are fraudulent for video campaigns, compared to eight percent for display. But this is a 22 percent decrease in video ad fraud rates in 2017. On mobile meanwhile, fraud rates for web video and in-app video are fourteen percent and eight percent respectively, compared to three percent for display.

The report finds this drop in fraud has been driven by a variety of industry efforts to tackle the issue. Firstly, it finds that more advertisers are shifting their ad spend onto channels with built-in fraud prevention measures, particularly those which use third-party security firms to detect fraud. Out of all the companies which took part in the study, only ten percent reported that they don’t use any fraud verification services. Coordinated industry measures like the IAB’s ads.txt initiative, and the Trustworthy Accountability Group’s various anti-fraud efforts, are also credited with bringing down fraud rates.

There have also been notable successes in tracking down and punishing those committing ad fraud with the help of law enforcement. The dismantling of major bot networks, including ‘3ve’ last year, as well as an increase in the number of arrests made, has forced fraudsters further underground. This has made fraudulent traffic more difficult and expensive to source according to the report.

While the overall story is positive though, White Ops did pick out areas for improvement. Less than half of all impressions are fully, transparently validatable according to the data, leaving these impressions vulnerable to the more sophisticated forms of ad fraud. This has been a particular problem with video as well as the majority of video ads still don’t support the latest version of the IAB’s Video Ad Serving Template (VAST), VAST 4.

And fraud volumes are still growing in newer frontiers, like mobile in-app and connected TV. For connected TV, White Ops says the industry should be wary of OTT device impersonation, server-side ad insertion (SSAI) spoofing, app spoofing, device farms, hidden ads and fraudulently incentivised ads. It also recommends that a CTV version of ads.txt should be adopted to help ensure that all supply is authenticated.

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