• by Steve McClellan  @mp_mcclellan, May 1, 2019

Economic losses due to bot fraud are projected to reach $5.8 billion globally this year, but for the first time more fraud will be stopped than will succeed, according to a new study from cybersecurity firm White Ops and the Association of National Advertisers.

By comparison, the losses are an improvement over the $6.5 billion reported in a similar study by the two groups released in 2017. The projected 11% decline in fraud comes as digital ad spending is projected to increase by 25.4% during the same period.

“We are coming off a year of unprecedented industry collaboration that has proved to be a powerful tool for tackling ad fraud at a global scale,” said Tamer Hassan, CEO and Co-founder at White Ops.  “But it is important to remember that fraud will always follow the money. As spending moves into new ad frontiers like CTV, it is increasingly important for marketers to stay vigilant and to recognize that fraud is a cybersecurity problem, not merely a measurement challenge and cannot be handled as such.”

The new study reveals that fraud attempts amount to 20-35% of all ad impressions throughout the year, the good news being that the success rate is declining per the report.

The report credits a number of anti-fraud measures that have made traffic sourcing more difficult and expensive.  And traffic sourcing transparency efforts led by the Trustworthy Accountability Group (TAG) also got a shout out for forcing  traffic vendors further underground, reducing “retail” bot buying on the open web. Also sharing credit is Ads.txt which has helped reduce domain spoofing.

The report also noted that TAG requires publishers to have completed ads.txt files if they want to be “Certified Against Fraud.”

Also the report states, more dollars are now being spent through programmatic platforms with built-in fraud prevention measures.  And arrests like those of the alleged masterminds behind the 3ve and Methbot operations, have helped curb fraudulent efforts operating overseas.

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

The study recommended that marketers take the following steps to help reduce ad fraud:

Work with the buy-side platforms that are building in fraud detection, requiring ads.txt, and pushing the adoption of new protections like app-ads.txt.

Work with the sell-side platforms that are helping to adopt protections like ads.txt and transparency-supporting standards like VAST 4.1.

Reject the temptation of buying “for tonnage,” i.e., space on high-risk and less valuable placements, which are filled with undisclosed incentivized inventory and adware.

And the report urges all to “push for the right to hold every platform, ad format, and buying channel to the same high standard of independent validatability.”

This latest report, the fourth in a series of so-called “Bot Baseline” reports included participation by 50 ANA member companies.  White Ops worked with brand advertisers and their agencies to analyze digital advertising activity data between August 1, 2018 and September 30, 2018.