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Advertising Fraud Losses to Reach $42 Billion in 2019, Driven by Evolving Tactics by Fraudsters

A new study from Juniper Research forecasts that advertisers will lose $42 billion of ad spend globally this year to fraudulent activities committed via online, mobile and in-app advertising. This is a 21% increase from the $35 billion lost to advertising fraud in 2018. This growth will be driven by increasingly sophisticated techniques being implemented by fraudsters.

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 4 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”.

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