The amount of revenue lost to advertising fraud are head spinning as is, but come 2022, it will have grown into a self-sufficient industry.
Advertisers will lose an estimated $19 billion to fraudulent activities next year, equivalent to $51 million per day. This figure, representing advertising on online and mobile devices, will continue to rise, reaching $44 billion by 2022.
The figures are contained in a new report from Juniper Research and echo the view of many that ad fraud is on its way to being one of the world’s largest criminal enterprises.
In addition to the usual click fraud, Which-50 learned this week that law enforcement agencies in the Asia Pacific are now examining the digital advertising ecosystem as a method of money laundering by criminal syndicates. It’s an issue we will examine in more detail in the coming months.
Ad platforms need to break out of Walled Gardens
Juniper’s new research, Future Digital Advertising – AI, ad fraud and ad blocking 2017-2022, said that the “Walled Garden,” a closed platform approach whereby advertising platforms restrict the flow of advertising performance data to advertisers and publishers, must be abandoned to stimulate transparency between stakeholders.
The report found that advertising fraud rates will continue to increase as a result of this, further hindering stakeholder efforts in tackling fraud.
Additionally, the research predicted that AI will be crucial in analyzing the vast amounts of data generated from advertising activities daily and minimizing loss due to fraud. It predicted that fraudsters will increasingly innovate in their approaches to imitate genuine advertising activity including simulated clicks, 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 will demand constant vigilance against the threat of ad fraud, which will only be achieved through the correct implementation of AI services.”
AI and the race for data
The study predicted that platforms leveraging AI for targeting purposes will account for 74% of total online and mobile advertising spend by 2022. But as the adoption of AI becomes saturated, only platforms demonstrating the most effective algorithms will be able to charge premium prices to advertisers.
According to the research, these platforms will need to focus on new data sources to improve the proficiency of their AI algorithms. Data from IoT (Internet of Things) devices, information sharing partnerships, and cross-device user identification will therefore become highly sought after.