The War on Ad Fraud Is Winnable

By Bill Duggan

ANA

For the fourth time, ANA and White Ops have partnered on a study to measure bot fraud (i.e., non-human impressions) in the digital advertising ecosystem. Fifty ANA members participated, allowing their digital advertising to be tagged for a two-month study period with activity analyzed by White Ops for fraud. Key findings:

• Economic losses due to bot fraud are expected to total $5.8 billion globally in 2019, but, for the first time ever, more fraud will be stopped this year than will succeed. The monetary losses, while significant, are an improvement over the $6.5 billion reported in the previous study released in 2017. The 11 percent decline in two years is particularly noteworthy considering that digital ad spending increased by 25 percent between 2017 and 2019.
• While fraud attempts amount to 20 to 35 percent of all ad impressions, the amount of fraud that gets through and gets paid for is now much smaller. For the first time, the majority of those fraudulent impressions are now getting invalidated by demand-side platforms (DSPs) or supply-side platforms (SSPs), filtered as SIVT before being paid for, or invalidated later. Absent those measures, fraud losses would have grown to an estimated $14 billion annually.
• When broken down by category, eight percent of desktop display advertising was fraudulent (down from nine percent in 2017) while 14 percent of desktop video ads were fraud (down from 22 percent). The rates were the lowest in the study's history.

The decrease in ad fraud suggests that the war on fraud is winnable. Key factors that contributed to declines in ad fraud:

• More money is now being spent through ad tech platforms with built-in third-party fraud prevention measures, an option that wasn't available at the time of the original study in 2014. This helps marketers avoid bidding on invalid traffic by default. In the current study, 90 percent of participants used a fraud verification service.
• Ads.txt ("authorized digital seller") which was created by the IAB Tech Lab to help publishers create lists of authorized media sellers, has worked to reduce desktop spoofing (i.e., a fraudulent site appearing to be real).
• It has become more expensive and less efficient to buy sophisticated, realistic bot traffic. Efforts by the Trustworthy Accountability Group (TAG) and their Certified Against Fraud program, coupled with groups working together to dismantle botnets, have drastically reduced both the supply and the demand for traffic from vendors that are caught selling bot traffic. TAG, by the way, just recently signed on its 500th member company.

The study also provides recommendations to help advertisers minimize fraud going forward, including:

• Reject the temptation to buy for "tonnage," i.e., space on high-risk and less-valuable placements, which are filled with undisclosed incentivized inventory and adware.
• Include language on non-human traffic in terms and conditions with publishers.
• Work with vendors who have implemented ads.txt. The average SIVT across domains not authorized by ads.txt was 2.2 times higher than domains authorized by ads.txt.

Additional recommendations are in the full report.

The first ANA/White Ops study in 2014 represented a landmark for the advertising industry as that helped get advertisers heavily engaged in the fight against fraud. That engagement has produced positive results and has helped advertisers better optimize their media investments.

It is true that fraud is an evolving threat, that fraud rates have been growing in new formats (like connected TV), and continued vigilance is needed. But there is no denying the gains the industry has made in this fight.