Cost of ad fraud to hit $16.4bn this year – more than double previously thought

The global cost of ad fraud may have been significantly under-reported with the amount estimated to be wasted on fraudulent traffic this year expected to be in the region of $16.4bn (£13.4bn).

According to a report from Adloox, commissioned by WPP’s The&Partnership and m/Six, the previous estimated cost to advertisers of $7.2bn globally each year is a long way off the true figures. The report shows that last year ad fraud may have cost around $12.48bn – accounting for nearly 20 per cent of the $66bn spent on digital advertising – and, with advertising expenditure forecasted to grow to $80bn, this figure could see a $4bn increase this year.

“These figures serve as a stark reminder that much still remains to be done in order to protect and nurture the future vitality of the digital economy,” said Johnny Hornby, founder of The&Partnership. “We have a duty to come together as an industry – from media agencies and industry bodies, to big-platform players like Google and Facebook; bringing in government help if we need it – in order to protect our own future and those of our clients.

“Good work is already being done by many, including the ANA, IAB, ISBA and the IPA, as well as the recent combined efforts of TAG (Trustworthy Accountability Group) in the US and JICWEB (the Joint Industry Committee for Web Standards) in the UK – but these new figures show that we need to move further, much faster. And there are concrete steps we should all be taking to make that happen.”

The report was conducted across 200bn daily bid requests – of which 50 per cent were found to be invalid traffic – and 10bn ad impressions per month, over a period of 12 months.

“Advertising fraud is the bank robbery of the digital age – and it needs to be dealt with as such,” said Marco Ricci, CEO of Adloox. “Unless the industry takes concrete steps to combat it, it poses a serious threat to the future of our industry. Only through a combination of constant human vigilance, corporate diligence and constant updates to ad verification technologies will it be possible to reverse the rising tide, and put a stop to ad fraud once and for all.”