In all its forms, from click spam to SDK spoofing, online fraud is estimated to be costing advertisers $51 million daily, with losses from common ad fraud tactics passing $100 billion for 2022, according to data cited in an analysis from the Association of National Advertisers.
“As malicious software and bot programming gets more and more sophisticated, this number only stands to rise,” ANA Senior Manager of Research and Innovation Josch Chodakowsky writes in the report, claiming that nearly 18% of all internet traffic in the industry is attributed to nonhuman bots, which are actively engaged in ad fraud. "With the U.S. being the biggest market for ad fraudsters, the issue has now been recognized by digital media professionals as one of the major challenges facing the industry, alongside third-party cookie deprecation."
ANA projects the cost of wasted ad spend due to ad fraud at $120 billion in 2022, a 21% increase from last year, with numbers steadily rising since 2018. “Digital advertising is no longer even close to optional, thus marketers must proactively make sure they understand how ad fraud is evolving, and be prepared to combat it,” Chodakowsky says.
Two ways of doing so are utilizing fraud detection software and staying on top of data analytics, as mentioned in ANA's report, referencing marketing company HubSpot's suggestion to leverage targeting to lessen the chances of encountering click fraud.
“The world of online advertising is an attractive one to fraudsters,” Chodakowsky says in the report. “To make things even worse, mobile ad fraud brings a new level of sophistication on the fraudsters' side to avoid countermeasures and continue to drain advertisers' budget with fraudulent mobile traffic. One of the most difficult challenges around mobile ad fraud is that no one really knows exactly how big a problem it is – so ignore it at your peril, or at least the cost of a significant chunk of your advertising budget.”