Digital Advertising Fraud and the Cost to Advertisers

Digital advertising is a multi-billion-dollar industry. As with any industry of such size and importance, it inevitably attracts bad actors looking to capitalize on its success. One such nefarious activity is digital advertising fraud.

What is Digital Advertising Fraud?

Digital advertising fraud refers to any attempt to misrepresent online ad impressions, clicks, conversion or data events, in order to charge advertisers for something that didn’t deliver its expected value. This includes practices such as:

• Non-human traffic (bots): Automated scripts or programs designed to mimic real users.
• Click fraud: When someone, or a bot, clicks on an ad with no intention of engaging with its content. This is done to drive up the advertiser’s costs.
• Pixel stuffing: Placing an ad in a single pixel frame so that it’s not visible to the user, but still registers as a view.
• Ad stacking: Overlapping several ads on top of one another, but only the top ad is visible to users.

The Cost of Fraud to Advertisers

The implications of ad fraud for advertisers are immense:

1. Financial Loss: Advertisers pay for ad impressions and clicks that have no real value. According to some estimates, advertisers lost over $35 billion to ad fraud in 2020.
2. Skewed Analytics: With fraudulent activities distorting metrics, it’s hard for advertisers to gauge the real success of their campaigns. This can lead to ill-informed business decisions.
3. Brand Reputation: Ads might be displayed in inappropriate contexts or associated with low-quality websites due to fraudulent activities.

Is Audio Advertising the Safe Haven?

Recently, audio advertising – especially in the form of podcasts, streaming services, and smart speaker promotions – has gained traction. There’s a perception that audio advertising is devoid of fraud. But is this accurate?

While it’s true that the audio advertising industry experiences less fraudulent activity than visual digital advertising formats, saying it has “no fraud” might be an overstatement. However, there are a few factors that make audio advertising inherently more resistant to common fraud tactics:

• No Visibility Issues: There’s no pixel stuffing or ad stacking in the auditory realm. You either hear the ad or you don’t.
• Engaged Audience: Podcasts and audio streaming platforms often have highly engaged users. The intimate nature of audio means that listeners are typically more attentive.
• Emerging Technology: While technology for detecting fraud in visual ads has been in development for years, similar technology for audio is still emerging. This might initially deter fraudsters from the medium.
• The new ringtone adverts are run across a telecoms secure network via an audio platform making it near impossible for ad fraud, so as new media emerges, we hope to see fraud prevention at the core of their offering and not an after thought.

Conclusion

While audio advertising offers a reprieve from some of the more common fraud techniques seen in the digital advertising world, it’s essential not to get complacent. As the audio advertising industry grows, it’s only a matter of time before it attracts more attention from bad actors. Advertisers must stay vigilant, always seeking to understand the latest tactics in ad fraud and the technologies designed to combat them.