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Ad fraud solution continues to elude advertisers

Nearly 18pc of all internet traffic in the marketing industry can be attributed to non-human bots which are actively engaged in ad fraud

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Stock image.

Stock image.

Earlier this week, the Association of National Advertisers (ANA), the representative organisation for advertisers in the US, sent shockwaves throughout the industry when it published a report that stated that ad fraud, in all its guises, would amount to around $120bn (€112bn) this year.

No, you have read that correctly – that is one hundred and twenty billion dollars.

According to the ANA, the cost of various forms of advertising fraud, which comes dressed in geeky-sounding terminology like click spam, ad-stacking, pixel stuffing, SDK spoofing, click injection, non-human bots and false app installs, will increase by 21pc this year to $120bn.

“In fact, nearly 18pc of all internet traffic in the marketing industry can be attributed to non-human bots, which are actively engaged in ad fraud,” the ANA noted.

“With the US being the biggest market for ad fraudsters, the issue has now been recognised by digital media professionals as one of the major challenges facing the industry, alongside third-party cookie deprecation,” the report said.

To put the $120bn in context, Unilever had a market capitalisation of around $118bn earlier this week while Sony was worth in the region of $114bn. Closer to home, Diageo, with its substantial portfolio of brands, was capitalised at around $104bn while GSK was worth around $112bn.

Within a matter of hours, however, the ANA removed details of the report from its website, citing the use of outdated figures and content that appeared elsewhere online as the reasons for its withdrawal. Not surprisingly, this unprecedented nothing-to-see-here proclamation, has raised more than a few eyebrows in the advertising world and even more questions.

It’s quite possible that the ANA’s members were outraged at the report’s findings or shocked by the ramifications for marketing and advertising budgets, never mind marketers themselves.

Perhaps they needed more time to digest its contents, none of which makes for pleasant reading. Perhaps it dawned on them that D-Day in the digital advertising world might be fast approaching and law enforcement agencies, shareholders and their bosses might be watching.

It’s also entirely conceivable that the ANA got it wrong with the $120bn. Previous ad fraud forecasts for 2022 put it at anything between $60bn and $80bn for 2022. There’s a big difference. It also suggests a huge degree of naivety and cluelessness within the advertising industry.

Whatever the reasons, it is very clear that ad fraud continues to be a major problem for an industry that has struggled pathetically to contain it and, worryingly, measure it properly. Meanwhile, the fraudsters – some of whom are allegedly state-backed (guess which state?) – appear to be always two or three steps ahead of everyone else.

One measure of what’s involved came from Google earlier this year when, in a blog post, the internet giant said it had blocked or removed a staggering 3.4 billion ads that violated its policies, including 652 million that were found to have abused the ad network’s policies, including fraud. A further 5.6 million advertiser accounts were suspended for “egregious violations”, a three-fold increase on 2020.

Meanwhile over at Facebook, the opaqueness of the digital ecosystem was reinforced when the company was forced to remove 6.5 billion fake accounts in 2022 and another 1.6 billion in Q1 of 2022 alone.

Elsewhere, buyer’s remorse may be behind Elon Musk’s standoff with Twitter. The Tesla founder has threatened to pull out of his $44bn deal to buy the company unless it divulges comprehensive details about the number of bots and fake accounts it has.

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While the likes of Facebook, Google and Twitter are constantly playing whack-a-mole with fraudsters and scammers, they are a small part of a much bigger problem that involves an industrial scale adtech ecosystem, parts of which are inept, corrupt and often disinterested in changing the status quo. Advertisers and sometimes their agencies, meanwhile, are clearly struggling to get their heads around a problem that only appears to be getting bigger and bigger.

You really can’t make this stuff up.

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