In the midst of <<all this>>, it might be easy to overlook the other pandemic escalating right under our noses. According to a new white paper from AdAge and Spider Labs, ad fraud is stealing 20% of the $66 billion spent overall each year on digital advertising.
According to The Ad Contrarian newsletter, University of Baltimore economist Prof. Roberto Cavazos calls the level of add fraud “staggering. The digital advertising sector has … higher fraud rates that multi-trillion-dollar sectors.”
Let’s put this into perspective. The credit card business is roughly 10 times the size of the online ad business. Yet online ad fraud now accounts for more than the amount of credit card fraud.
And it’s gotten much worse this year. According to the newsletter, the report states that “the digital domain overall has seen a marked increase in fraud since the coronavirus first emerged….Along with the rise in scams like ransom-ware, trojan viruses and malware, ad fraud has also spiked dramatically.”
There was some hope about containing this plague last year, when Association of National Advertisers (ANA) and bot mitigation firm White Ops promised: “for the first time ever more fraud will be stopped in 2019 than will succeed.”
“The decrease in ad fraud suggests that the war on fraud is winnable,” said ANA CEO Bob Liodice at the time. “Less fraud means more resources can be devoted to brand and business building.”
That sounded great … especially this year as ad budgets ratcheted down and are only now starting to ease up again. So this new report is particularly troubling. In the presidential election alone, security firm CHEQ estimates up to 30% of the 1.3 billion spent on digital ads for the presidential election was vaporized by fraud.
It’s sobering … and there’s no easy cure on the horizon. Be careful out there.