The $122 Billion Ad Fraud Mafia Marketers Are Ignoring

Ad fraud is the problem the advertising industry is turning a blind eye to, but the scale of the problem means every brand should be paying rapt attention to it. Here Yahoo’s senior platform solutions lead, Rahila Nadir (pictured), unpacks the problem and some lessons from the IAB’s recent Ad Fraud Playbook.

When asked, seven out of 10 advertisers claim they haven’t experienced ad fraud. Given that the best estimates are showing globally ad fraud is raking in $122 billion per year, it is highly probable that most brands are actually falling victim to this in some way.

The reason most marketers are blasé to this problem is that they simply don’t see it – they don’t have the tools to measure or detect it. And this is causing major issues across the whole industry and wider community.

Why am I getting so heated about this? To put it simply this is money going directly from your ad budgets to fund organised crime. It’s not exactly the Don Vito-style mafia, but the even murkier cybercrime gangs that view advertising as a nice, soft underbelly to make an easy few billion bucks from each year.

Cybersecurity Ventures estimates the global cost of cybercrime will reach $10.5 trillion annually by 2025. There’s also good evidence to suggest this is money that is then used to fund other types of much more tangible crimes which have substantial real-world impact. Ironically, these are often the kinds of things marketing teams are looking to combat with CSR initiatives. Perhaps solutions are much closer to home.

Closer to home these scams impact your campaign effectiveness, which in turn may see good channels being wrongly turned off or marketing budgets stripped back because the CFO isn’t seeing value from the investment.

Clearly, it is a topic I’m passionate about, and I recently had the opportunity to contribute to the IAB’s Ad-Fraud Handbook, which I’ll pull from here to give you an overview of what to look for and how you can start to weed out this problem in your business.

The two categories of ‘criminals’

The easy-to-catch criminals: General Invalid Traffic (GIVT) – Can be identified through standard fraud detection techniques, for example looking for bots and spiders.

The dapper outlaw: Sophisticated Invalid Traffic (SIVT) -These are more dangerous, difficult to detect and require advanced analytics and human intervention. Some of the
techniques include domain spoofing, ad stacking and click injection.

Get to know ‘the enemy’

Do you remember the famous Uber case where the company cut $100 million in ad-spend and saw no change in the number of rider app installs? The reason: $100 million was going towards ad fraud and most of it was click flooding.

From cookie stuffing to cookie synching, from click spamming to click farms, from APP fraud to SDK spoofing – there are mafia soldiers lurking at every turn. This isn’t a violent smash and grab, but rather a quiet and subtle pickpocket exercise where so often the victim has no idea they’ve lost out.

Self-defence

There are a few different ways to ensure your investments are protected within the supply chain:

Platforms like Yahoo DSP have built proprietary fraud protection schemes meeting MRC spec requirements. This scheme includes anti-fraud guarantees to provide money back to advertisers in instances of fraudulent traffic. It is worth discussing what ad-fraud protection is enabled on the platforms you are connected with;
Know where your ads are seen by the use of standard exclusion and inclusion lists to ensure brand safety and brand suitability – failure to do this exposes you to riskier sites;
Don’t leave it to chance, create a set of risk rules to determine the likelihood of fraud, also known as real-time scoring;
Bring in the ad fraud police by the use of post-bid blocking vendors such as iAS, DoubleVerify and Oracle;
Clean the pipes – tools like ads.txt and ads.cert give greater control to agencies and advertisers over their supply strategies;
Keep an eye on the enemy by using viewability as a metric to detect fraud

Ad fraud’ in CTV

DoubleVerify found that CTV ad fraud surged by 69 per cent globally in 2022. The three main types of ad fraud in CTV include fraudulent apps, fake traffic and spoofing. An example of “spoofing” is a fake URL e.g. something like ABCCompany1.com when the real company’s website is ABCCompany.com.

With more brands jumping into this increasingly popular medium it is an important area for the industry to focus on, with higher CPMs and more potential rewards for these bad actors.

Safeguard and shield

Are you who you say you are? You can use different checks to protect your activity. Ensure that the same IP address is used across different requests to weed out the bad guys. Further, User- agent can also be used for identifying if someone on a particular IP is the same person. Lastly, Ads.cert2.0 is a solution that includes a set of protocols with cryptographic signatures that are intended to be used to; authenticate the server-side ad integration (SSAI), the device, the user and the app.
The use of ad-fraud police such as IAS and HUMAN will help identify fraud and allow you to protect media owners’ revenue.
The adoption of the Open Measurement Software Development Kit (OM SDK) will facilitate third-party viewability and verification measurement for ads served to web video, native app environments and CTV. As the specification develops, the OM SDK functionality with the support of device manufacturers can help to detect whether a connected TV is on/off which can help to prevent ad fraud.

From Marketeers to Marshals

Because we’ve ignored this problem for so long, these gangs are now armed with the latest technology to continue inflicting significant losses on the advertising industry. Further, as much as AI is the new hot topic on efficiency and automation, there is a fear that it can be leveraged by the sophisticated mafia for fraudulent purposes.

The issue has many layers and is very serious, therefore, buyers and sellers need to come together to ensure we don’t waste any more money by simply claiming ignorance. If you’re interested in learning more and getting to grips with these issues then the IAB Ad Fraud Handbook will help you get started, giving you a guide to identifying problems and creating solutions.

Remember, it’s not a case of whether ad fraud is costing you money, but how much money it’s costing.

Special thanks to all the contributors to the IAB Ad-Fraud Handbook: André Candeia Galvão, Jessica Miles, Imran Masood, Deanna Galluccio, Nathan Farrugia, Colin Lam, Declan Dowd, Dr. Augustine Fou, Lindsay Bender, Mathew Ratty and Jonas Jaanimagi.

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