HAMPSHIRE, England – In 2018 alone, advertisers will lose an estimated U.S. $19 billion — or $51 million per day — to ad fraud, according to a new study from Juniper Research. The figure, representing losses by advertisers on desktop and mobile websites, is about 9 percent of the projected annual spend.
By 2022, Juniper researchers predict losses will climb to $44 billion.
According to the researchers, the “walled garden” approach to performance data is a major culprit in the paradigm.
“Advertising fraud rates will continue to increase as a result of [walled-garden data], further hindering stakeholder efforts in tackling fraud,” the researchers noted in their report. Closed-platform protocols that restrict data flow between advertisers, publishers and networks “must be abandoned to stimulate transparency between stakeholders.”
Artificial intelligence will be crucial in analyzing the vast amounts of data generated by daily advertising activities, as well as in minimizing fraud-relted losses, according to the researchers. They warned fraudsters are becoming increasingly sophisticated in their deception, moving beyond conventional methods like click fraud and “cookie stuffing” to include emerging techniques that incorporate mouse movements and social network accounts.
“Fraudsters will continue to heavily invest in domains, user accounts and bot farms in order to appear genuine,” said research author Sam Barker. “Advertising stakeholders must demand constant vigilance against the threat of ad fraud, which will only be achieved through the correct implementation of AI services.”
The research predicts platforms leveraging AI for targeting purposes will account for 74 percent of total online and mobile advertising spend by 2022. However, as the adoption of AI becomes saturated, only platforms demonstrating the most effective algorithms will be able to charge premium ad rates.
According to the study, platforms will need to focus on new data sources to improve the proficiency of their AI algorithms. Data from Internet of Things devices, information-sharing partnerships and cross-device user identification will be essential.
More information about how AI is expected to impact digital advertising is available in the free whitepaper Ad Fraud: How AI will Rescue Your Budget.
Lead image © Gnet2000.
