The first half of 2022 is behind us - so it’s worth taking a look at the latest statistics and trends in online marketing frauds. How much do advertisers intend to spend on digital marketing in 2022 and how much of that amount will end up in the pockets of the fraudsters? What Ad Fraud trends will this year bring? What needs to change in the approach of advertisers to finally stop the annual increase in revenues of digital advertising criminals? We will try to answer these questions below.
How much of advertising budgets is being consumed by Ad Fraud?
In 2016, the World Federation of Advertisers predicted that in the next 10 years (until 2026) advertising fraud would be the second largest market for organized crime (after drug trafficking), with a value of $ 50 billion per year by 2025, approximately 10% of the total value of the digital advertising market, but if you believe the current data, these forecasts were significantly underestimated...
According to Insider Intelligence, a total of $ 571 billion will be allocated to online advertising this year, and according to Opticks, as much as $ 81 billion of this amount will be wasted by Ad Frauds. If these figures are even close to the truth, it means that not 10, as predicted by the World Advertising Federation, but as much as 14% of funds allocated by advertisers to online marketing will be absorbed by fraud.
PubGalaxy in its article Online Advertising Fraud Trends in 2022 cites Fraudlogix’s data for Q1 2022. Their research shows that BOTs and other advertising scams account for 15.6% of all ad views worldwide. In addition, they estimate that the value of the Ad Fraud market will increase by over 15% this year compared to 2021 and will amount to $ 68 billion worldwide. Although this forecast is much lower than the one from Opticks (81 billion), the same conclusions are drawn from both - frauds related to internet marketing are more and more common and the revenues of fraudsters are higher every year.
What new trends can we observe when it comes to Ad Frauds?
- Attribution theft is an increasingly popular type of Ad Fraud
Although the farms of clicks, impressions or likes and imitating human behavior (often very effectively) BOTs are still popular types of digital advertising scams, the shift from frauds related to fake users to taking on someone else’s attribution can be seen more and more clearly. This happens for several reasons, the most important of which are more and more effective tools for recognizing fake traffic and much lower costs associated with the latter type of fraud. Attribution theft, so depending on what the advertiser pays for in a given campaign - clicks, leads, views, sales, application downloads or triggering other activity generated by another publisher requires a better technological background and smarts, but usually it is much cheaper than maintaining a farm or BOTs, which constantly need improving. It is also much more profitable because already generated real events are stolen, while in the first case only part of the traffic generated by BOTs or farms was actually approved by the advertisers.
- Fake News and Deep Fake
Recent years have also seen an increase in the number of fake news scams and their latest form - Deep Fake, which is gaining in popularity. Humanity has known for a long time how effective propaganda can be, but thanks to digitization and globalization we are entering a completely new era. Currently, creating false information that thousands of people will believe in isn’t difficult at all, and this is confirmed by Deep Fake, an audiovisual technique consisting in changing and processing video material in such a way that it still looks authentic. We all know it from applications that allow you to paste someone’s face into snippets of famous movies, but the tools used by Deep Fake scammers are usually much more advanced.
- Increased awareness and more frequent preventive actions
Fortunately, we can also see positive trends related to Ad Frauds, such as the higher awareness of advertisers who have stopped sweeping this problem under the rug on a mass scale. More and more companies are investing in tools to detect and block advertising frauds. If you believe the word of Research and Markets, the global market for such solutions will grow at a rate of 17.1% year on year, to be worth up to USD 762 million in 2028.
Another positive trend is the increased control of partner companies and, as a result, their transparency. Advertisers limit the number of partners they cooperate with in marketing campaigns, but not only that - publishers and advertisers also attach increasing importance to technology providers whose services they use. With the growing threat of Ad Frauds, all internet marketing entities want to feel safe and require from their partners, transparency which they themselves try to maintain.
A few years ago, IAB introduced the first solutions to help standardize the digital advertising market - ADS.txt and Sellers.json are two methods that are an effective way to improve the quality of automated advertising. Thanks to them, publishers can determine who can sell their inventory, check more detailed statistics, etc. These standards are recently gaining popularity.
- Connected TV (CTV) and OTT in the spotlight of fraudsters
The times of the pandemic have resulted in the enormous popularity of streaming platforms and, as a result, the advertisements used in them. Of course, we are talking about connected TV and On The Top ads. No wonder that fraudsters increasingly look for new ways to fraud in these channels. For now, BOTs are most often used for this purpose, but fraudsters are certainly looking for new ways to steal attribution from publishers working in CTV and OTT campaigns.
How should advertisers react to such data?
Systematically growing statistics relating to ad fraud show how big and global challenge are frauds related to online marketing. The fight against fraudsters requires the joint action of all entities related to internet marketing, but also governments and organizations fighting against cybercrime. But it all starts in individual companies, which should both implement a professional anti-fraud solution and constantly monitor their and their partners marketing activities. Research conducted by Opticks shows that companies that don’t invest in protection against advertising fraud will have as much as 11% lower Return On Ad Spend (ROAS) and at the same time their Customer Acquisition Cost (CAC) will increase by 9%. Therefore, taking preventive actions is conducive not only to a higher good, but also to the finances of each company that advertises on the Internet - as Forbes claims, combating advertising fraud may be the best marketing investment for companies in 2022.