Online Advertising Fraud In 2019: $42 Billion Is Expected To Go Down The Drain Worldwide

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The revenue loss due to online advertising fraud in 2019 would increase by 20%, and a whopping 185% between 2018 and 2023.

The increasing number of internet users worldwide is attracting the eyeballs of brands which are pouring the enormous amount of money in online advertising. At the same time, it creates an opportunity for scammers, hackers and fraudsters who are actively employing innovative strategies to trick unsuspecting internet users to pocket billions of dollars every year.

According to the recent report from Juniper Research, online advertising fraud in 2019 is expected to result in the loss of $42 billion in revenue. Nearly 40% of the loss due to advertising fraud would be by America alone. The Far East and China is not far away though and is estimated to account for 30% of the total digital advertising fraud in 2019.

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Online Advertising Fraud In 2019: A Worrisome Scenario

The report, however, highlights some worrisome scenarios of the future as well. Despite all the measures employed by online advertising giants, like Google and Facebook, to curb online fraudsters, the number of online advertising frauds is only expected to rise. The report of Juniper Research estimates that due to online advertising fraud in 2023 a whopping $100 billion would go down the drain.

Leading digital ad networks are constantly learning and improving their ad serving mechanism to refrain from the menace of ad fraud that comes with digital advertising. However, with the advent of technologies like Artificial Intelligence and Machine Learning, fraudsters are equipped with more innovative ways to trick ad servers, eventually resulting in a wipeout of a huge chunk of the advertising budget of brands.

“Accountability needs to come from advertisers first because they are holding the money of the brand. He needs to be aware of the task at hand to keep a check on ad fraud. However, the whole ecosystem is responsible for the set up which is happening.” said Dheeraj Gupta, CTO/Co-founder – mFilterit, while talking to AdAge India.

In 2017, the global advertising industry was shaken from the effect of Hyperbot – the greatest ad frauds the industry ever witnessed. HyphBot was generating up to 1.5 billion requests per day and it generated fake traffic on more than 34,000 different domains, including premium publishers, and more than a million different URLs. The financial impact of the Hyperbot was disastrous and forced industry experts and leading players to revisit their strategies to prevent online ad frauds.

While it’s quite difficult to measure the revenue loss due to the online ad frauds, it is estimated that $35 billion was lost due to digital ad fraud in 2018.

While Us and China account for lion’s share of the loss, the effect on India – fastest growing smartphone and e-commerce market – remains quite minimal. According to another report, in 2018, the total revenue loss due to ad fraud in India amounted to $1.6 billion. Digital Commerce emerges as the biggest culprit as it accounted for 51% of the total revenue loss in the country during the said year.

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