Ad fraud costs advertisers a huge amount of money. One form of ad fraud is when people place ads on networks that have no potential to actually be viewed by people. Then companies use bots to click on these ads and rake in the dollars. This year it is expected to cost about $7.2 million dollars, while last year in 2015 it cost advertisers $6.3 million, making 2016’s figure a significant increase. Ad fraud is hard to prevent because once one prevention method is put into place, the fraudsters seem to be able to come up with new ways to make their fraudulent money. Not only is the financial impact on the rise, but so is the percentage of advertisers affected by ad fraud. According to a report from the Association of National Advertisers (ANA) and White Ops, in 2014, advertisers had a 2-22% chance of being a victim of fraud, while last year in 2015 3-37% of advertisers had the same chance.
According to the same report, ad publishers with high cost-per-thousand rates, typically greater than $10, had a higher chance of experiencing ad fraud than others. Strangely, campaigns which targeted Hispanic consumers were nearly twice as likely to be targeted than other ads. Bob Liodice, president of the ANA called the high level of fraudulent activity a travesty. The Interactive Advertising Agency estimates that ad fraud, along with other problematic activities in online marketing including ad blocking technologies and piracy will cost digital marketers about $8 billion dollars per year.
Consumer ad blocking alone already costs advertisers more than ad fraud, with last years figures coming in around $780 million dollars of lost revenue, with malware accounting for another $230 million in lost revenue. Bot traffic in general, not always related to ad fraud, costs advertisers a cool $4.6 billion and piracy seals the deal with $2.4 billion dollars in lost revenue.
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