US brands will lose $6.5bn to ad fraud in 2017 as report claims the war is ‘winnable’

According to a new report, ad fraud is declining as US brands place a greater focus on creating transparency.

As brands place more of an emphasis on digital advertising, the risk of ad fraud only increases. But despite this threat, the level of ad fraud in the US is set to fall in 2017.

According to the latest Bot Baseline report from White Ops and the ANA, which is based on an analysis of 49 ANA members’ digital advertising activity between October 2016 and January 2017, US brands will lose $6.5bn in revenues due to ad fraud in 2017. That is down 10% from 2016 when this figure stood at $7.2bn.

“Marketers worldwide are successfully adopting strategies and tactics to fight digital ad fraud,” claims ANA CEO Bob Liodice. “This is a powerful indicator that the war on digital ad fraud is winnable for those who establish proper controls and protocols. And that is exceptionally good news for the advertising, marketing, and media communities worldwide.”

However, despite this 10% fall, the report also estimates that 20% of the internet is now made up of ad-fraud websites, with fraud bots and click fraud still populating a significant chunk of the web. It says 22% of desktop video ads will only be viewed by traffic bots this year- a figure that’s worryingly held from 2016.

READ MORE: Brand safety online: Can it ever be guaranteed?

Traffic sourcing, which is the purchase of traffic from inorganic sources, is also a major contributor to ad fraud. The report claims 3.6 times as much ad fraud will come from sourced over non-sourced traffic in 2017.

It suggests ad fraud is a lot less common on mobile devices. The participants of the survey saw less than 2% of fraudulent ad activity in app environments and mobile web display buys. However, it is worth noting this figure does not take into account fraud in mobile web video or pay-per-click fraud, which both remain big concerns for marketers.

Furthermore, the report says fraud in desktop display advertising will go down from 11% last year to 9% this year. Video is a different story; with the fraud rate for desktop video spend accounting for 22% this year, down only slightly from 23% last year.

Despite the unavoidable nature of ad fraud, White Ops CEO Michael Tiffany remains upbeat and says the war against it is now “winnable”.

He concludes: “What we’re seeing is finally the first macro sign that the war is winnable, although it’s certainly far from won.”

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