Online ad fraud is apparently out of control. A white paper released this week by AdAge and co-sponsored by anti-fraud company Spider Labs, estimates that ad fraud is stealing 20% (which comes to $66 billion) in global online ad spending. The report states, “the digital domain overall has seen a marked increase in fraud since the coronavirus first emerged….Along with the rise in scams like ransom-ware, trojan viruses and malware, ad fraud has also spiked dramatically.”
In another recent report, Prof. Roberto Cavazos, economist at the University of Baltimore, said “the level of ad fraud is now staggering. The digital advertising sector has … higher fraud rates than multi-trillion-dollar sectors…”
Prof. Cavazos’ comments came in a report issued by cybersecurity firm CHEQ which Cavazos participated in. The report estimates that ad fraud will create direct worldwide marketing losses of $35 billion in 2020. This is about a 50% increase over their estimate of $23 billion in direct losses in 2019.
Cavazos has spent over 30 years studying fraud across many business sectors. Last year he said, “I have studied the economic costs of fraud in many sectors for decades, and I was left stunned by the scale of fraud in online advertising.”
But, please, don’t tell that to our illustrious industry “leaders.” The crackpots at the ANA last year foreshadowed the “we’ve turned the corner” cluelessness of the White House with this gem: “Report From ANA And White Ops Shows War On Ad Fraud Is Succeeding.” If you need a good laugh, read it.
Some highlights from the CHEQ study:..
