A recent report from Distil Networks indicates that even as the world’s digital spend is hit new records – at $27.5 billion for just the first half of 2015 – ad fraud costs the industry an estimated $18.5 billion annually.
“There are different types of mobile fraud happening,” said David Sendroff, CEO of Forensiq. “In some cases, they are faking mobile traffic. And in other cases, they are hijacking devices and filling ads in the background.”
The main problem is nonhuman (bot) traffic vs ‘real’ human traffic:
Rampant ad fraud has led to 37% of advertisers saying they are willing to pay a premium of 11% or more for certified, human traffic, according to the report.
“If advertisers are measuring things only humans can do, like pulling out a credit card and paying for something, then the ad networks are going to have every incentive to kick bot traffic out,” Mr. Epstein added. “But when they are basing their spend on page views, the networks have the perverse incentive to allow that relatively fake, cheap traffic to exist in their network.”
And platforms like Facebook are responding:
Ad fraud may eventually turn into a manageable nuisance like shoplifting, something that companies learn to control without ever eradicating. Advertisers generally see lower levels of fraudulent traffic by dealing directly with publishers rather than using programmatic exchanges. Of course, that also means missing out on the scale that automation provides. Sites such as Facebook, with its billion-plus users, are relatively bot-free, if expensive, places to run an ad. Earlier this year, Facebook said advertisers would have to pay only when their ads are actually seen by humans.