The FraudScore team has been working with ad agencies, platforms, developers, and advertisers for more than five years, and we’ve decided that it’s time to share our insights about both the obvious and hidden costs of ad fraud.

First, let’s refresh our memories. Fraudulent traffic has been increasing consistently over the past five years on a global scale. In fact, according to FraudScore’s 2020 Report, 38% of global online ad traffic was fraudulent, with 32% in desktop traffic and 38.5% in mobile. In 2020, the severity of digital advertising fraud even overtook that of credit card fraud, resulting in $35B in ad fraud versus $27B in credit card fraud. The Global Association of Advertisers estimates that $50B will be lost in the battle with fraudsters by 2025

These numbers are shocking, revealing, and not positive. Simply, ad fraud is hitting hard, and very soon there will be absolutely no option for a company to survive in online advertising without ad fraud protection. For that reason, let’s take a look at the list of direct damages and disguised threats that fraudsters are posing to ad campaigns. We hope that this list will help understand how important it is to stay alert and get ad fraud protection:

1. Poor campaign data, and damaged strategy. In simple terms, fraudulent traffic is fake traffic. Campaign managers make decisions based on statistics, and if the statistics are undermined by ad fraud, then optimization is sabotaged. However, the managers are not aware of this; they find the best possible ROI, and optimize the campaign based on the data they have. In the end, strategic decisions are made in the wrong directions. Moreover, when fraudsters lure brands away from real audiences, the brands lose vital data (e.g., geos , demographics, etc.) about actual prospective users. In this case, even future campaigns are impacted
2. Misguided investments in fraudulent sources. The aforementioned high-performing strategies certainly seem to represent the right choice for investments on the surface. In campaign statistics, they look effective, and seemingly provide suitable traffic. However, in reality they are a spoof, with no ROI.
3. Loss of trust and reputation, and damaged brand value. Damaged campaigns and lost budgets cause business relationship to be ended. Marketers are losing trust in their business partners and opting to find new ones. The lack of transparency in the industry also contributes to this issue, as companies don’t share their experiences with fraud sources publicly due to a high risk of brand damage. This leads to greater obscurity in the market, and other companies fall into the same bad-source-trap when they might have been warned by their colleagues .
4. Time and money spent on investigations, negotiations, and refunds. Many additional resources are required to deal with ad fraud cases. Managers must make thorough investigations and spend excessive amounts of time and effort on developing ad fraud cases. Sometimes, the case can’t be resolved without the help of an accounting or legal department, or top managers. Realistically, it also takes a “learn-from-your-mistakes” approach to become an expert in ad fraud investigation. Not to mention the payouts that are likely to happen, for an agency might have already paid for traffic to its sources before an advertiser makes a deep dive into statistics, detects fraud, and refuses to pay for such traffic. Alternatively, a payout might happen as damage control, after ad fraud was found and proved.
5. New traffic sources entail a new learning and optimization curve. After an advertiser has decided to replace a traffic source due to traffic quality concerns, a campaign starts from scratch again. A new supply source requires a new learning period, on-boarding, and optimization, which takes time, effort, and money
6. Extra stress for the team. It’s no secret that the online ads industry is one of the most stressful, yet rewarding, spheres to work in. Managers are on a constant rally for profitable sources and creatives, optimizing and setting up campaigns. If a manager has had an issue with either bad decisions based on faulty campaign statistics, or lost budgets from investing in the wrong sources, that manager is more likely to feel the stress of constantly questioning traffic quality. Rather than concentrating on more important tasks and optimization, the manager keeps thinking about possible ad fraud that might come unnoticed. While your team members should be concentrating on their direct tasks, they are manually monitoring IP addresses, sub-networks, and traffic surges, and are trying to detect suspicious sources themselves. These efforts can surely be channeled in more important directions.

Of course, there is no 100% protection from ad fraud. It keeps evolving, and each year more and more marketers are affected. Even the giants, like Google or Facebook, with their own platforms and algorithms, are publicly admitting that ad fraud is a concern that can’t be ignored. In this vibrant and extreme market, an antifraud tool serves as insurance. On the one hand, it is insurance that your ad campaigns are being under constant observation and control. On the other, you need your own arguments in ad fraud cases if you are one of the parties in a dispute.

FraudScore invites you to get a free trial of our system and test it yourself. Moreover, we encourage companies to test several solutions, compare them, and ask for explanations and traffic case analysis. Ad fraud is here to stay, so be prepared.