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VAB Exposes Hidden Dangers and Costs of Digital Ad Fraud

Digital ad fraud poses significant challenges to the online advertising ecosystem.
Cover Image Source: A woman walks past a billboard advertising | Getty Images | Photo by Sean Gallup
Cover Image Source: A woman walks past a billboard advertising | Getty Images | Photo by Sean Gallup

Today, there should be no greater concern for marketers than digital ad fraud. The Video Advertising Bureau (VAB) has recently brought to light the often-overlooked dangers lurking within the digital advertising industry. Titled "Hidden Costs: Three Critical Business Ramifications of Digital Ad Fraud," the report provides an in-depth analysis of the multifaceted risks posed by digital ad fraud, which extend beyond financial losses.

A passenger waiting to board his plane walks in front of a sign advertising Twilio | Getty Images | Photo by Robert Alexander
Image Source: Getty Images | Photo by Robert Alexander

Digital ad fraud is a pervasive issue that poses significant challenges to the online advertising ecosystem. It encompasses various deceptive activities aimed at exploiting vulnerabilities in the system, leading to substantial financial losses and reputational damage for advertisers and publishers. The impact of digital ad fraud ranges from manipulating impression metrics to generating fake clicks and attributing false conversions.

Pexels | Plann
Image Source: Pexels | By Plann

According to VAB's research, the financial impact of digital ad fraud is staggering. In 2023, the global cost was estimated at $84 billion, a number that's expected to double in the next five years. This sum reflects the total amount spent on national and local cable TV advertising in North America. "This is all in stark contrast to the high standards of accountability, transparency, and brand safety which have always defined the premium video landscape," VAB President & CEO Sean Cunningham said in a statement.

The report also sheds light on the reputational risks associated with digital ad fraud. A lack of transparency in ad campaign purchases can result in ads being displayed in inappropriate contexts. When consumers encounter ads in incongruous or offensive settings, it can tarnish the brand's image and integrity, leading to a potential fallout in the longstanding relationships of trust and loyalty with customers.

Shoppers wait in line while shopping | Getty Images | Photo by Tom Pennington
Image Source: Getty Images | Photo by Tom Pennington

Another critical aspect the report covers is the legal risks stemming from digital ad fraud. Incidents such as data breaches not only violate consumer privacy but also have severe legal implications, including hefty fines from regulatory bodies. In response to these findings, VAB advises marketers to demand greater transparency from their media partners.

The report includes five specific demands that advertisers can make to ensure better oversight and control over their digital campaigns. These demands are designed to help marketers navigate the complex digital ad scene more safely and effectively.

Image Source: Krongkaew/Getty Images
Image Source: Photo by Krongkaew | Getty Images

Further enriching the report's insights, VAB has incorporated findings from three studies conducted by Adalytics in 2023. These studies offer tangible examples and detailed analyses of the various risks associated with digital ad fraud, providing valuable lessons and guidance for marketers and advertisers alike.

Advanced technologies, including machine learning and artificial intelligence, can play a crucial role in detecting and preventing fraud. Ad verification tools and fraud detection platforms can empower advertisers to identify suspicious activities and take proactive measures. Furthermore, industry collaboration is essential to establish standards and best practices for combating ad fraud globally.

Through this comprehensive report, VAB aims to equip advertisers with the knowledge and tools they need to safeguard their campaigns against the hidden costs of digital ad fraud. "In 2024, VAB is committed to ending that double standard, and we will continue the fight for a fair and transparent marketplace," stated Cunningham.