• by Joe Mandese , May 1, 2019

In the war on digital fraud, the ad industry is winning. That’s the conclusion of an in-depth analysis conducted by invalid traffic detection and prevention firm White Ops for the Association of National Advertisers (ANA).

“Economic losses due to bot fraud are expected to total $5.8 billion globally this year, but for the first time ever more fraud will be stopped in 2019 than will succeed,” finds the fourth periodic “Bot Baseline” report from the ANA and White Ops.

As significant as 2019’s estimated ad-fraud losses are, it represents an 11% decline from the $6.5 billion the industry lost due to ad fraud in 2017, the last year the analysis was conducted. The ad-fraud decline compares with a 25.4% increase in digital ad spending over the same two-year period.

“The decrease in ad fraud suggests that the war on fraud is winnable,” ANA CEO Bob Liodice said in a statement, adding: “Less fraud means more resources can be devoted to brand and business building.”

The ANA highlighted the following findings from this year’s report:

• Ads.txt, which was created by the IAB Tech Lab to help publishers create lists of authorized media sellers, has worked to reduce desktop spoofing. The rates for desktop ad fraud were the lowest in the history of the report.

• It has become more expensive and less efficient to buy sophisticated, realistic bot traffic. Many bot traffic vendors have been driven out of business or underground, reducing the availability of bot traffic sold at “retail” on the open web to anyone with a credit card. Efforts by the Trustworthy Accountability Group (TAG) and their Certified Against Fraud program, coupled with groups working together to dismantle botnets, have drastically reduced both the supply and the demand for traffic from vendors that are caught selling bot traffic. Today, more sophisticated bot buying operations have been forced underground, to invitation-only forums and chat rooms, which require a more sophisticated buyer.

• More programmatic dollars are transacted through platforms with built-in fraud prevention measures. Advertisers are directing more of their money through buying channels with dedicated, independent fraud prevention measures, an option that wasn’t available at the time of the original study in 2014. Today, there are third-party security firms treating fraud-fighting as a dedicated function. When security is separated from audience and media intelligence, collaboration across platforms becomes substantially easier to scale. These measures help marketers avoid bidding on invalid traffic by default, without extra effort.